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Decision-making criteria

Information or documents – application to the High Court to require another person to provide information or documents

Principles of regulatory decision-making, approved by the SRA Board, provide a set of standards applicable to decisions. The principles are supported by guidelines.

The reasons given by a decision-maker will normally include specific criteria applicable to the decision. SRA Policies relevant to decision-making are reflected in the criteria.

Scope of this document

This document applies to an application by the SRA to the High Court for an order requiring a third party, to whom section 44B of the Solicitors Act 1974 does not apply, to provide information or documents specified in a section 44B notice which has previously been served on a person to whom section 44B applies.

The relevant regulations are:

Criteria

The power to make an order applies to third parties who are not regulated by the SRA and therefore who are not subject to section 44B for example banks, building societies, accountants.

The High Court may make an order only is satisfied that:

  • It is likely that the information or document is in the possession or custody of, or under the control of the person and
  • There is reasonable cause to believe that the information or document is likely to be of material significance to an investigation into any of the following:
    • Professional misconduct by a regulated person or body;
    • Whether a regulated person or body has failed to comply with any requirement imposed by or by virtue of the Solicitors Act 1974 or any rules made by the Society;
    • Whether a recognised body, or any of its managers or employees has failed to comply with any requirement imposed by or by virtue of the Administration of Justice Act 1985 or any rule made by the Society and applicable to the body, manager or employee by virtue of section 9 of that Act;
    • Whether there are grounds for making, or making an application to the Tribunal for it to make, an order under section 43(2) with respect to a person who is or was involved in a legal practice (within the meaning of section 43(1A) employed or remunerated by a solicitor in connection with his practice.

Example

The example below is illustrative and does not set any type of precedent. Each matter is considered on its own facts and merits.

We undertake an inspection into A & Co on the basis of intelligence that the firm has been involved in money laundering.

Our investigation officer establishes that the transaction raising concern has been conducted by a fee earner, Mr Y. The transaction relates to the sale of commercial property for the value of £8 million where inadequate checks have been performed by Mr Y along with other actions which bear the hallmarks of money laundering. The client ledger relating to the transaction shows that the £8 million has been paid out of A & Co's client account into the account of a company called M & Co. Checks performed at Companies House show that Mr Y has previously been a director of M & Co.

In order to establish that Mr Y has benefited from the transfer of these funds, the investigation officer wants to know who the current beneficial owners of the account were and so a notice under section 44B is served on Mr Y requiring him to provide these details. Mr Y fails to comply with the notice.

In order to further the investigation, we seek an order from the High Court to require the bank at which the account was held to produce the information which had been required in the section 44B notice. The order is granted by the court on the basis that the information required is in the possession or custody of, or under the control of the bank and there is reasonable cause to believe the information is likely to be of material significance to an investigation into professional misconduct by a regulated person or body.

The information is produced by the bank and enables the investigation officer to conclude the investigation and demonstrate that Mr Y benefited from the transfer of the £8 million, funds obtained via money laundering.