SRA Handbook

Interpretation, waivers, reconsideration and notifying third parties

Back to version 21

Version 1 of the Handbook was published on 16/09/2011. For more information, please click 'History' Above

Part 4: Interpretation, waivers, reconsideration and notifying third parties

Regulation 16: Interpretation

16.1

All italicised terms are to be interpreted in accordance with Chapter 14 of the SRA Code of Conduct unless otherwise specified.

16.2

In these regulations:

appellate body

means the body with the power, by virtue of an order under section 80(1) of the LSA, to hear and determine appeals against decisions made by the SRA acting as a licensing authority.

associate

has the meaning given in paragraph 5 to Schedule 13 of the LSA, namely:

(i)

"associate", in relation to a person ("A") and

(A)

a shareholding in a body ("S"), or

(B)

an entitlement to exercise or control the exercise of voting power in a body ("V"),

means a person listed in sub-paragraph (ii).

(ii)

The persons are

(A)

the spouse or civil partner of A,

(B)

a child or stepchild of A (if under 18),

(C)

the trustee of any settlement under which A has a life interest in possession (in Scotland a life interest),

(D)

an undertaking of which A is a director,

(E)

an employee of A,

(F)

a partner of A (except, where S or V is a partnership in which A is a partner, another partner in S or V),

(G)

if A is an undertaking

(I)

a director of A,

(II)

a subsidiary undertaking of A, or

(III)

a director or employee of such a subsidiary undertaking,

(H)

if A has with any other person an agreement or arrangement with respect to the acquisition, holding or disposal of shares or other interests in S or V (whether or not they are interests within the meaning of section 72(3) of the LSA), that other person, or

(I)

if A has with any other person an agreement or arrangement under which they undertake to act together in exercising their voting power in relation to S or V, that person.

authorised person(s)

means a person who is authorised by the SRA or another approved regulator to carry on a legal activity and for the purposes of the SRA Authorisation Rules, the SRA Practice Framework Rules and the SRA Recognised Bodies Regulations 2011 includes a solicitor, a sole practitioner, an REL, an EEL, an RFL, an authorised body, an authorised non-SRA firm and a European corporate practice and the terms "authorised individual" and "non-authorised person" shall be construed accordingly;

BSB

means the Bar Standards Board;

compliance officer

is a reference to a body's COLP or its COFA;

Court of Protection deputy

includes a deputy who was appointed by the Court of Protection as a receiver under the Mental Health Act 1983 before the commencement date of the Mental Capacity Act 2005, and also includes equivalents in other Establishment Directive states;

date of notification

the date of any notification or notice given under these regulations is deemed to be:

(i)

the date on which the communication is delivered to or left at the recipient's address or is sent electronically to the recipient's e-mail or fax address;

(ii)

if the recipient is practising, seven days after the communication has been sent by post or document exchange to the recipient's last notified practising address; or

(iii)

if the recipient is not practising, seven days after the communication has been sent by post or document exchange to the recipient's last notified contact address;

disqualified

refers to a person who has been disqualified under section 99 of the LSA by the SRA or by any other approved regulator;

EEL

means exempt European lawyer, namely, a member of an Establishment Directive profession:

(i)

registered with the BSB; or

(ii)

based entirely at an office or offices outside England and Wales,

who is not a lawyer of England and Wales (whether entitled to practise as such or not);

European corporate practice

means a lawyers' practice which is a body incorporated in an Establishment Directive state, or a partnership with separate legal identity formed under the law of an Establishment Directive state:

(i)

which has an office in an Establishment Directive state but does not have an office in England and Wales;

(ii)

whose ultimate beneficial owners include at least one individual who is not a lawyer of England and Wales but is, and is entitled to practise as, a lawyer of an Establishment Directive profession; and

(iii)

whose managers include at least one such individual, or at least one body corporate whose managers include at least one such individual;

HOFA

means a Head of Finance and Administration within the meaning of paragraph 13(2) of Schedule 11 to the LSA;

HOLP

means a Head of Legal Practice within the meaning of paragraph 11(2) of Schedule 11 to the LSA;

interest holders

means a person who has an interest or an indirect interest, or holds a material interest, in a body (and "indirect interest" and "interest" have the same meaning as in the LSA), and references to "holds an interest" shall be construed accordingly;

legally qualified

means any of the following:

(i)

a lawyer;

(ii)

a recognised body;

(iii)

an authorised non-SRA firm of which all the managers and interest holders are lawyers save that where another body ("A") is a manager of or has an interest in the firm, non-authorised persons are entitled to exercise, or control the exercise of, less than 10% of the voting rights in A;

(iv)

European corporate practice of which all the managers and interest holders are lawyers;

and references to a "legally qualified body" shall be construed accordingly;

licensing authority

means an approved regulator which is designated as a licensing authority under Part 1 of Schedule 10 to the LSA, and whose licensing rules have been approved for the purposes of the LSA;

material interest

has the meaning given to it in Schedule 13 to the LSA; and a person holds a "material interest" in a body ("B"), if that person:

(i)

holds at least 10% of the shares in B;

(ii)

is able to exercise significant influence over the management of B by virtue of the person's shareholding in B;

(iii)

holds at least 10% of the shares in a parent undertaking ("P") of B;

(iv)

is able to exercise significant influence over the management of P by virtue of the person's shareholding in P;

(v)

is entitled to exercise, or control the exercise of, voting power in B which, if it consists of voting rights, constitutes at least 10% of the voting rights in B;

(vi)

is able to exercise significant influence over the management of B by virtue of the person's entitlement to exercise, or control the exercise of, voting rights in B;

(vii)

is entitled to exercise, or control the exercise of, voting power in P which, if it consists of voting rights, constitutes at least 10% of the voting rights in P; or

(viii)

is able to exercise significant influence over the management of P by virtue of the person's entitlement to exercise, or control the exercise of, voting rights in P;

and for the purpose of this definition, "person" means (1) the person, (2) any of the person's associates, or (3) the person and any of the person's associates taken together, and "parent undertaking" and "voting power" are to be construed in accordance with paragraphs 3 and 5 of Schedule 13 to the LSA;

person who lacks capacity under Part 1 of the Mental Capacity Act 2005

references to a person who lacks capacity under Part 1 of the Mental Capacity Act 2005 include a "patient" as defined by section 94 of the Mental Health Act 1983 and a person made the subject of emergency powers under that Act, and equivalents in other Establishment Directive states;

practising address

in relation to an authorised body means an address from which the body provides services consisting of or including the carrying on of activities which it is authorised to carry on;

prescribed

means prescribed by the SRA from time to time;

principal

means a sole practitioner or a partner in a partnership;

SA

means the Solicitors Act 1974;

shareowner

means:

(i)

a member of a company with a share capital, who owns a share in the body; or

(ii)

a person who is not a member of a company with a share capital, but owns a share in the body, which is held by a member as nominee;

SRA Code of Conduct

means the SRA Code of Conduct 2011;

SRA Practice Framework Rules

means the SRA Practice Framework Rules 2011;

SRA Practising Regulations

means the SRA Practising Regulations 2011;

the Tribunal

means the Solicitors Disciplinary Tribunal which is an independent statutory tribunal constituted under section 46 of the SA but references to the Tribunal do not refer to any function performed by the Solicitors Disciplinary Tribunal as an appellate body; and

trustee

includes a personal representative (i.e. an executor or an administrator), and "trust" includes the duties of a personal representative.

Regulation 17: Waivers

17.1

In any particular case or cases the SRA shall have power to waive in writing the provisions of these regulations for a particular purpose or purposes expressed in such waiver, and to revoke such waiver.

Guidance note

(i)

Waivers granted in respect of these regulations will expire on the repeal of the regulations on 31 March 2012. Firms with the benefit of such waivers should consider whether they need to apply for a new waiver of the equivalent provisions of the SRA Authorisation Rules and, if so, should contact the Professional Ethics Guidance Team.

Regulation 18: Reconsideration

18.1

The SRA may reconsider or rescind a decision made under these regulations when it appears that the decision maker:

(a)

was not provided with material evidence that was available to the SRA;

(b)

was materially misled;

(c)

failed to take proper account of material facts or evidence;

(d)

took into account immaterial facts or evidence;

(e)

made a material error of law;

(f)

made a decision which was otherwise irrational or procedurally unfair;

(g)

made a decision which was otherwise ultra vires; or

(h)

failed to give sufficient reasons.

18.2

A decision may be reconsidered under 18.1 only on the initiative of the SRA.

18.3

The SRA, when considering the exercise of its powers under this regulation, may also give directions:

(a)

for further investigations to be undertaken;

(b)

for further information or explanation to be obtained; and

(c)

for the reconsideration to be undertaken by the original decision maker or by a different decision maker or panel.

Regulation 19: Notifying third parties of decisions

19.1

The SRA may, if it considers it in the public interest to do so, notify any or all of the following persons of a decision made under these regulations:

(a)

a recognised body, licensed body or authorised non-SRA firm of which the body or individual concerned is a manager or has an ownership interest;

(b)

a recognised sole practitioner, recognised body, licensed body or authorised non-SRA firm of which the individual concerned is an employee;

(c)

any approved regulator;

(d)

the Legal Services Board;

(e)

the Legal Ombudsman;

(f)

the regulatory body for any profession of which the individual concerned is a member or which regulates the body concerned;

(g)

any law enforcement agency.

Regulation 20: Transitional provisions

20.1

In these regulations references to licensed bodies shall have no effect until such time as the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA and all definitions shall be construed accordingly.

20.2

In these regulations references to compliance officers shall have no effect until such time as the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA.