Making decisions to investigate concerns
Purpose and status of this guidance
This document provides guidance for those making initial decisions on whether to investigate complaints and reports of misconduct or breaches of our regulatory requirements. The guidance seeks to ensure that our assessment of cases is fair, proportionate, transparent and consistent.
This guidance should be read in the context of decision making at the SRA and other guidance documents. It is a living document and will be reviewed and updated as appropriate. It reflects our approach to our regulatory role and any departure must be capable of justification on the individual facts of the case.
Those individuals and firms authorised by us to provide legal services must be competent in what they do, and act in their clients’ best interests. But these attributes, while essential, are not enough. Solicitors have a respected position in society, their work allows them privileged access to confidential information and puts them in a relationship of trust with clients, some of whom may be very vulnerable. A solicitor whose conduct has shown that the trust placed in them cannot be justified, should not continue in unrestricted practice while that remains the case.
In short, the public is entitled to expect that those we regulate follow the principles and standards set out in our Code of Conduct. We have regulatory powers which allow us to take action when they fail to do so. These powers range from engagement with firms to ensure that issues are resolved at a local level, to striking solicitors off the roll or revoking a firm’s authorisation to practice.
However, we will not take action on all reports or complaints. Our role is to regulate in the public interest, to protect consumers, and uphold the rule of law and the administration of justice. We also adopt a risk-based approach. This means we focus on the individuals and firms most likely to harm the public interest, ensuring that any decision to investigate a complaint or report is proportionate, balancing the public interest with the interests of the individual or firm whose conduct or behaviour has been called into question. This commitment mirrors our statutory obligation to: "…have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted".1
We call the three key stages where initial decision-making occurs Triage, Assessment and Designation. The latter is the process where we decide whether cases require us to exercise our formal powers of investigation, or whether to engage with the firm or individual to understand the issues better and encourage ways to comply with our requirements. When, in the rest of this document, we refer to a decision to "investigate" a concern, this includes a decision to engage with a firm or individual in this way.
During these stages, and in order to meet the aims set out above, we assess whether the information brought to our attention suggests a breach of our regulatory requirements which is sufficiently serious that, if proved, would be capable of resulting in regulatory action. A breach may be serious either in isolation or because it comprises a persistent failure to comply or pattern of behaviour. In considering whether this test is met, there is a range of factors that guide our decisions, which include those set out below. It is however, worth noting that a combination of factors may give rise to the decision as to whether our public interest purpose will be served by taking regulatory action, and we may decide that this is not the case. If so, the matter will remain on file and may be referred to if we receive future complaints, as described further below.
Factors for consideration
Are we able to take action?
We are able to take action on information from any source, including clients and members of the public, solicitors and firms, or organisations such as the Legal Ombudsman and the courts. Equally issues can come to our attention as a result of information arising during, or a failure to comply with, our internal processes, or from the press or media reports.
As a first step, we will consider whether the information clearly falls outside of our jurisdiction. For example, the matter will proceed no further if it raises issues about a firm or individual who we do not regulate, or relates to a situation in which no professional duty is owed or regulatory breach is alleged.
Mrs X is currently engaging in divorce proceedings. She is seeking agreement to a financial settlement and contacts us to complain that her husband's solicitors have failed to respond to her solicitors.
In the meantime, Mr X is arranging to sell the marital home, and reports separately to us that he has made it clear that he needs to complete the sale quickly, but that the conveyance is being held up by the buyer's solicitors.
Both of the firms complained about, have a duty to provide a proper standard of service to their client. However, this duty does not extend to the complainant in each case. There is nothing to suggest that the solicitors are not acting appropriately, on the instructions of their client. In particular, they are under no obligation and indeed, cannot, respond to third parties without their clients' instructions. We would therefore close both of these complaints with no action.
If it is not clear whether the matter relates to a regulated firm or individual, we will seek further information to enable the matter to be assessed.
The matter may relate to an individual or firm that is not authorised by us, but is regulated by another body (for example, a barrister regulated by the Bar Standards Board, or a conveyancing firm regulated by the Council for Licensed Conveyancers). If so, we will inform the complainant and pass the information to that body on their behalf. (We may nonetheless wish to investigate the individual in the context of their role as an employee, manager or compliance officer within a firm authorised by us.)
Where the concerns appear to relate solely to poor service, we will refer this to the Legal Ombudsman, who has powers to investigate such complaints and to provide redress where these are upheld. Once again, we may also take action ourselves if it appears that there has been a breach of the firm or individual’s professional obligations. Equally if the Ombudsman, having investigated, consider that this is the case, they will let us know so that we are able to do so.
Mr O complains to us about the behaviour of his former partner, Ms P in relation to her failure to make payments due to him under the agreed terms of his deed of resignation.
We would not normally take action where the issues complained of relate solely to a civil dispute, such as an employment or partnership dispute, and where there is no evidence of lack of probity (such as dishonesty or discrimination), or actual or potential harm to clients.
In addition, we would be unlikely to take action where the real answer to the complainant's problem lies in pursuing an alternative legal remedy; for example a claim before the Employment Tribunal, proceedings to recover non-payment of fees, or where matters relate to proceedings that are currently being litigated before the court. If the Tribunal or Court then call into question the individual or firm's probity, or they fail to comply with a judgment or order, then we may reconsider the matter in light of those findings.
Our parallel proceedings guidance covers the situation where the initial concerns are sufficiently serious to require us to take action, but the issues are also being considered in another forum. This might include, for example, a data protection breach that is investigated by the Information Commissioner, but also reveals a failure to keep clients’ affairs confidential, or a criminal prosecution for a serious criminal offence.
A client of Firm ABC contacts the SRA to complain that the firm failed to return her calls promptly and did not keep her updated as to progress of her house sale, for which they are handling the conveyancing.
The Ombudsman contacts us three months later to inform us that, having investigated the complaint further and gathered more information from the complainant and the firm, it appears that ABC have failed to account to the client for funds received from the buyers for fixtures and fittings.
The initial complaint relates solely to the service provided to the client by Firm ABC, and we would refer this to the Ombudsman. On receipt of the information from the Ombudsman, we would however wish to investigate the concerns about the failure to account for funds belonging to the client, as these indicate more serious concerns about incompetence, lack of appropriate financial controls or even financial impropriety.
Assessing the risk
All cases that fall within our jurisdiction are assessed to decide whether the matter should be investigated. The risk assessment helps us to prioritise our regulatory response, ensuring that it is proportionate to the risk presented.
The nature of the alleged conduct or behaviour
When carrying out a risk assessment, we will first identify the nature of the conduct or behaviour alleged to have occurred and, on the basis that some breaches are considered to be inherently more serious than others, each issue identified will be assigned a score between 1 and 10 (10 being the most serious).
In doing so, we do not necessarily take as read a complainant’s description of events, but will use our own judgment to identify the relevant issues. For example, a solicitor may be accused of breaching an “undertaking” (which would generally be referred for investigation or engagement with the solicitor), when it is clear that the facts relate to the failure to pay a simple business or personal debt, which we would be unlikely to pursue if unrelated to their legal practice. Equally, an allegation of failure to comply with our accounting requirements may in fact suggest misappropriation of client money.
Then we consider the impact, or potential impact, of the conduct or behaviour, taking into account:
- the number of individuals affected or potentially affected
- any financial harm to clients or others, and the scale of any loss or potential loss
- the level of public interest and/or the effect on public confidence in those who provide legal services or the legal system
- the relative vulnerability of the clients or others affected or potentially affected by the behaviour.
In doing so, we would consider any evidence available at this early stage which might indicate that there is a risk of future harm as a result of the repetition of the conduct or behaviour.
The following principles guide our consideration of whether a concern has the potential to affect public confidence, as suggested above:
- This will involve issues that affect, or are capable of affecting a considerable number of people or a section of the public.
- Something that affects a single individual can be in the public interest if the effect involves the breach of a general principle that is incompatible with continued practice as a lawyer. For example, involvement in serious crime, dishonesty or lack of integrity (for example misleading the court), unlawful discrimination, or the abuse of a relationship of trust, particularly relating to individuals who may be vulnerable or disadvantaged for any physical, mental, social or emotional reasons.
- The public interest concerns the public good, not necessarily what the public is interested in.
In deciding whether or not the test for regulatory action is met, we work on the assumption that the events can be proved to have taken place. If the test is met taking the complaint at face value, an investigation is carried out to establish whether this is in fact the case.
However, at the initial assessment stage, we will consider the credibility of the source, and the strength and quality of the evidence. We will take into account not only the evidence presented to us, but also that capable of being gathered in support. In doing so we will bear in mind any references in the complaint or report to available evidence, when the alleged conduct or behaviour took place and what is likely to be held by the complainant, the firm/individual, or a third party, and what steps the complainant has taken which may have generated or preserved evidence, such as reporting the events to the police or other agency.
This assessment allows us to close at the initial assessment stage, complaints which on their face meet our threshold for investigation but are groundless, or vexatious. However, we are mindful of the need to take care, as some complainants may find it difficult to articulate their concerns. Also, that serial complainants do often make legitimate and substantiated complaints. Therefore we will always consider carefully in such circumstances whether there are lines of enquiry, which we can explore in order to substantiate the concerns.
We appreciate that reporting a concern to us may place some individuals in a difficult position and if information is reported to us anonymously or confidentially, we will take appropriate steps in accordance with our whistleblowing policy.
When we receive a complaint or report, we will check this against the information we already hold about the individual or firm. If the matter has already been raised with us, investigated and adjudicated upon, then it can proceed no further unless there are grounds for us to take a formal decision to reconsider. However, in some circumstances, for example where a previous report has been closed without a formal adjudication on the facts, and the later report raises substantively new information about the closed matter or suggesting a pattern of similar concerns, then we may nonetheless decide to investigate and may in certain circumstances revive the old case too. In all such cases, our overriding consideration is whether action is appropriate in the public interest – although we will balance this against the need to act fairly.
A firm or individual’s regulatory history or risk profile may make the current complaint more concerning, for example a firm’s delay in complying with an undertaking may not in itself appear sufficiently serious for us to take action, but we may decide to do so if we also hold information which suggests a history of similar delays which might suggest that systems, or financial controls, are weak.
Alternatively, where the firm or individual has been subject to an intervention or previous disciplinary proceedings, this may suggest that there is little risk in practice as the firm has closed or appropriate controls are in place. Therefore, we may consider it disproportionate to take action to investigate the current complaint, although we will keep it on file in case the circumstances change.
We receive a complaint from Firm A that Mr C, their opponent acting for a patient in mental health tribunal proceedings, has put forward a case which has no legal merit and is against his client's best interests.
On reviewing his regulatory history, we identify that a previous complaint against Mr C has been referred to the Ombudsman. This was from a client and alleged he had overcharged her for work on a judicial review claim and pursued points which she hadn't raised with him. We also note that he is a partner in a large firm offering a range of mental health services through a number of branch offices, which has failed to renew its professional indemnity insurance by the due date.
Whilst we may have considered the initial concern to be a matter to be resolved between the parties before the Tribunal and the overcharging to be a service issue for the Ombudsman, when considered holistically, the issues suggest that the firm may be in financial difficulties and this could provide a motive for Mr C taking forward cases without merit or instructions in order to inflate his fees. We are therefore likely to investigate this further by seeking an update from the Ombudsman on the client complaint, and investigating the circumstances of the current concern and the firm's insurance status.
1. Section 28 Legal Services Act 2007.