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Cooperation agreements proposed for SRA whistle-blowers

The Solicitors Regulation Authority (SRA) could soon be asking for views on potential agreed penalties for those who have breached the Code of Conduct but disclose their and others' misconduct.

The SRA's Compliance Committee this week agreed that the SRA Board should consider a consultation paper on a whistle-blowing policy. If the Board agrees, the SRA will be inviting comments on the idea of imposing more lenient sanctions on those involved who are helpful during investigations.

The Cooperation Agreements policy also includes a Whistle-blowers' Charter and looks to enter into cooperation agreements with possible witnesses who might also be in some regulatory difficulties. They would provide full disclosure and, if necessary, give live evidence in a court or tribunal. Their own conduct would be dealt with as part of the agreement.

The FSA has recently introduced a leniency scheme. Consultation feedback on the scheme included comments on how a lack of such an amnesty from other regulators could damage its success.

Between 2007 and 2009, it is reported that calls to the FSA's dedicated whistle-blowing line doubled and the FSA's Director of Enforcement said the leniency scheme has been "used to good effect". The Office of Fair Trading carries a promise of similar incentive on its website.

David Middleton, SRA Director for Legal and Enforcement, said: "We estimate that a handful of cases every year might benefit if potential witnesses who may have been involved in some wrong-doing could come forward and be offered leniency as part of a cooperation agreement. Respondents to investigations are already aware that the early correction of problems and cooperating generally with us can significantly mitigate any failures on their part.

"In that context, a cooperation agreement scheme would be another step forward in encouraging disclosure and cooperation. It would be particularly beneficial in providing transparency both for those who might wish to take advantage of it, but also our staff and stakeholders as to how the scheme will operate."

There are likely to be even more companies being regulated by the SRA when it starts regulating alternative business structures (ABS), which are expected to start in the new year. Having a whistle-blowing policy in place may improve the speed at which an increased number of potential investigations can be dealt with.  


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