Investigations and enforcement – Annual Report 2023/24

How we check compliance with our rules and take action

There are two main ways in which we check compliance with our rules and take regulatory action:

1. Assessing reports of concern: we assess the reports of concern we receive. These are mostly from the public or the law firms we regulate, but they can also be from the police, a bank or press or media article, among others. If necessary, we refer cases for an investigation. An outcome of an investigation may be a sanction or control we impose, or we may refer the matter to the Solicitors Disciplinary Tribunal (SDT).
2. Proactive checks: where we carry out proactive checks and assess law firm and solicitor compliance with specific areas of our rules. Proactive checks can take place on a rolling basis, to monitor compliance with a specific set of our rules. They can also be in response to specific intelligence we have learned about or risks we have seen in the sector. In these instances, we can engage with firms to bring them back into compliance or we can take regulatory action. If the breach of our rules is more serious, we can investigate the matter and issue a more serious sanction or refer the matter to the SDT.

Regulatory action 2017/18 to 2023/24

The table below shows regulatory action which may be a result of our proactive checks or where we assess the reports of concern made to us.

Please note:

• These figures relate to cases we closed in each year and the types of regulatory action recorded on each case. One case can result in more than one type of regulatory action.
• Please note, however, that if an intervention into a firm or individual’s practice was carried out in relation to a case closed, these intervention figures are not noted in the table below. Instead, the number of interventions we carry out each year can be found on our client protection annual data page. Because we report this group of regulatory actions separately, the number of regulatory actions listed in the table below may not always be more than the total number of cases where we took regulatory action.
• It is not possible to compare overall figures of regulatory action on a year-by-year basis as we have added categories of data to the table across various years. These include:
  • 2019/20 was the first year where we reported on cases with a section 99 order
  • 2022/23 was the first year where we reported on cases where we imposed practising conditions on practising certificates
  • 2022/23 was the first year we issued fixed financial penalties (impacting on the overall number of financial penalties).

* Please note, this category used to be named 'letter of advice' between 2017 and 2023. We updated the name following a change in process where the advice is now issued in a formal decision document instead of a letter, and to better reflect the wording in our Standards and Regulations.

** Please note, this category used to be named 'finding and warning' until 2019 and ‘letter of warning' from 2020 to 2023. We have now updated the name following a change in process where the warning is now issued in a formal decision document instead of a letter, and to better reflect the wording in our Standards and Regulations.

*** In 2022/23, we reported this as 73 financial penalties, which represented the number of cases where we issued a financial penalty. To more accurately present how many individual financial penalties we issued in 2022/23, we have corrected this to 77.  

We prosecute the most serious cases at the SDT. It is independent of us and can impose more severe sanctions than we can.

It can impose unlimited fines for any type of misconduct or suspend or strike off a solicitor from the roll of solicitors, meaning they can no longer work as a solicitor.

When deciding whether to bring a case to the SDT, we consider whether:

• We have evidence that would support a realistic prospect of the SDT making a finding of misconduct.
• The SDT is likely to impose a sanction that we cannot.
• It is in the public interest to make the application.

Although we decide whether to bring a case to the SDT for a hearing, it is the SDT which decides on the outcome. One case can result in more than one sanction. We first began reporting on conditions the SDT placed on either a firm's authorisation certificate or an individual's practising certificate in 2022/23.

* One of these conditions was applied because of a successful restoration to the roll application. The case that this relates to is not included in the 99 cases we referred, as it was brought by an individual and not by us.

** Four of these conditions were applied because of successful restoration to the roll applications. These four cases are not included in the 78 cases we referred, as they were brought by an individual and not by us.

*** This is where the SDT has imposed conditions following a period of suspension coming to an end. While the conditions were added in the respective years, the original suspension will have been recorded in data related to the year in which it began. These cases are not related to the number of cases concluded at the SDT for the respective year.

Agreed outcomes

If we refer a matter to the SDT and it says there is a case to answer and the firm or individual admits to allegations, it may be appropriate to conclude the matter by an agreed outcome, rather than through a full hearing. In these circumstances, we agree an outcome and costs based on an agreed set of facts.

The SDT then considers the outcome and will decide whether to accept it, whether any changes should be made to it, or to order a full hearing for the case. Agreed outcomes are different to regulatory settlement agreements, which are agreements we come to with solicitors and firms without the need to involve the SDT and when, typically, the matter is not as serious in nature.

Agreed outcomes allow us to protect both consumers and the public interest swiftly, efficiently and at a proportionate cost.

The table below shows the breakdown by number and percentage of cases resolved by way of agreed outcome and by way of a hearing per year.

Please note, there is a discrepancy between the total number of cases shown in the table below and number of overall cases heard at the SDT for some years. This is because some cases will have both an agreed outcome and a hearing recorded against them. This is because in cases where there is more than one respondent, one or more may have decided to resolve their matter by agreed outcome and the other(s) by a hearing.

The table below shows the number of reports received by our Assessment and Early Resolution Team (AERT) and the number it dealt with in the same period. Once AERT has dealt with a report, there are a few possible outcomes. These high-level outcomes at the AERT stage are listed below. We introduced AERT and an accompanying new process partway through 2018/19. You can learn more about the assessment threshold test.

There is not always a linear relationship between the number of reports we receive and the number dealt with in the same 12-month period. This is because not all cases will be made and resolved within that timeframe. Some reports will be made just before the start of a new business year and are therefore not counted in the 'number of concerns reported to us' line. They will, however, typically be counted in the 'total number of concerns we dealt with'. And some reports made to us towards the end of our business year will be resolved in the next business year. This means they will be counted in the 'number of concerns reported to us' line but not in the 'total number of concerns we resolved line.'  In 2023/24, we received 11,852 reports about solicitors and firms – the highest volume in seven years. More information on this can be found in our Driving Confidence and Trust report.

* We redirect matters to LeO if we think it is a service level-related complaint, which accounts for the majority of the reports within this category. If a report is redirected internally, it is generally because it is a matter for our Authorisation or Client Protection teams.

** We introduced this category in 2023/24. We use it in cases where we have identified a rule breach and the most appropriate action to take is issuing a fixed financial penalty (FFP). FFPs allow us to deal with less serious issues in a more effective and timely way. We use these for specific, lower-level, non-complex breaches of our rules.

If a concern passes our assessment threshold test, it is then referred for an investigation.  Most of our investigations are resolved within a year of receipt. If, however, a matter is referred to the SDT or there is other activity, such as a police investigation, we receive further related reports, or a case is particularly complex, it can take much longer.

The table below shows who reported concerns to us in 2022/23 and 2023/24

Please note, totals in the above table may not add up to 100% due to rounding.

We started to issue FFPs from mid-2023 for specified breaches of our rules, for example, non-compliance with our Transparency Rules or failing to respond to our requests. FFPs allow us to deal with non-complex breaches of our rules more swiftly. In addition to acting as an appropriate deterrent for firms not complying with certain rules, this saves everyone time, cost and stress.

* Please note, fixed financial penalties were introduced partway through this year.

The financial penalty we can impose on individuals and entities will depend on the type of regulated individual or firm. For solicitors, traditional law firms (recognised bodies or recognised sole practices) and the individuals who work in them, the maximum financial penalty we can impose is £25,000 (introduced in a change to legislation on 20 July 2022).

For licensed bodies (alternative business structures or ABS) and the individuals (including solicitors) that work in them, the maximum financial penalty we can impose is £50m for an individual or £250m for the entity.

More detail can be found in our financial penalties guidance.

The table below shows the value of all financial penalties issued in 2023/24, including FFPs. It is important to note that all financial penalties, whether issued by the SDT or through our internal processes, are paid to the Treasury.

Reviews of SRA decisions – sanctions and controls

The numbers in the table below cover the number of requests to review an outcome from respondents who have been subject to a sanction (such as an FFP) or control (such as a practising condition) that we have imposed. 2022/23 was the first year where we included numbers on cases where we imposed practising conditions and appeals concerning practising conditions. Because of this, the number of reviews carried out in 2022/23 and 2023/24 is not directly comparable with previous years.

Appeals against Solicitors Disciplinary Tribunal decisions

The decisions in the chart below relate to appeals against decisions the SDT made.

* Judgment reserved means the judge acting in the case has heard the case but does not give an immediate decision. Instead, they may take some time to issue their judgment, allowing them to appropriately consider the matter and come to a decision. 

Our investigations and enforcement costs

We constantly keep how we work under review. To keep costs under control in all cases, we work to key principles: to act quickly, fairly and proportionately. The below table shows our investigation and enforcement costs from 2017/18 to 2023/24.

For more information, see our latest financial statement: our Solicitors Regulation Authority Limited statement for 2023/24.

Number of cases2017/18 to 2023/24

The table below sets out how many cases per year between 2017/18 and 2023/24 cost more than £100,000. For context, the table also includes the number of cases we brought to the SDT and number of appeals heard against SDT decisions.

The cases which cost more than £100,000 will have concluded in the year noted in the table and are inclusive of any appeals process.

Cases costing £100,000 or more in 2023/24

We referred 78 cases to the SDT in 2023/24 and of those and the five appeals heard, there were six where our costs were £100,000 or more.

The figures include the costs claimed (or agreed) for:

• our work in investigating a case and bringing it to the SDT, whether this was done in-house or by instructing a panel firm, and inclusive of any counsel
• bringing an appeal before the High Court, if there was one, and any work carried out by a panel firm or counsel
• costs awarded to the opposing party.

Advice

We issue advice to help a solicitor/firm understand our regulatory arrangements and the behaviours that demonstrate a risk. This is intended to help them comply in the future and prevent inadvertent repetition.

Agreed outcome

An alternative to having a hearing at the Solicitors Disciplinary Tribunal (SDT). Agreed outcomes must be approved by the SDT. We agree an outcome and costs with a solicitor or firm based on an agreed set of facts. The SDT then considers the outcome and will decide whether to accept it, whether any changes should be made to it, or to order a full hearing for the case. Where appropriate, it is a cost-effective, swift and proportionate way of resolving a matter.

Alternative business structure (ABS)

A structure that allows non-lawyers to own or invest in law firms. Under the Legal Services Act, these are also known as 'licensed bodies' and 'non-authorised persons', respectively.

Enforcement strategy

Our Enforcement Strategy sets out how we will use our enforcement powers when we find a firm, solicitor or other individual we regulate has not met the standards we expect. It provides clarity on how and when we will use our enforcement powers, and what we consider when assessing the seriousness of misconduct and the action to take.

Financial penalty

We type of fine we can issue up to the value of £25,000 for most firms, solicitors and other individuals we regulate. We can issue a financial penalty on an ABS up to £250m and up to £50m for the manager and employees of an ABS we regulate.

The exception to this relates to the Economic Crime and Corporate Transparency Act 2023. The Act gives us unlimited fining powers to sanction certain breaches that involve economic crime. This came into force in March 2024. We will only be able to issue these types of fines for breaches of our rules which took place after the Act came into being.

The SDT can impose unlimited fines on individuals and firms.

Fixed financial penalty

A type of fine we can issue for certain specified breaches of our rules, for example, non-compliance with our Transparency Rules or failing to respond to our requests. We can issue fixed financial penalties of £750 for a first breach and £1,500 for a subsequent breach within three years. It allows us to deal with less serious issues in a more effective and timely way.

Intervene/intervention

To intervene will involve taking away client money and files from a firm's or a solicitor's practice to keep the money and files safe. This will effectively close the firm or solicitor's practice. We call this an intervention. We will do this if we consider that people are at risk of receiving legal services from a dishonest solicitor, or it is otherwise necessary to protect the interests of clients.

Legal Ombudsman (LeO)

An organisation which handles complaints about the standards of service people receive from their lawyer.

No order

In the context of an outcome at the SDT, no order can mean that the SDT did not find in our favour following a hearing. It can also mean it did find in our favour, but it decides that it is not necessary or appropriate to impose a sanction or control.

Other decision

In the context of an outcome at the SDT, other can mean, for example, a reprimand or section 43 order.

Practising condition

Conditions which restrict or prevent a firm or individual from carrying out certain activity. There are typically three situations in which we may impose conditions on solicitors, firms and other people we regulate:

• A condition imposed as an outcome to an investigation where we have made a finding of misconduct.
• An interim condition, which we impose during an investigation and pending the final outcome of an investigation to limit risk of harm to the public. We will monitor these conditions as we progress an investigation.
• A condition imposed (or reimposed) where we are satisfied that the individual is unsuitable to undertake certain activities or otherwise presents a risk to the public interest. These conditions are imposed (or reimposed) under our Authorisation Rules, often at practice certificate renewal, and are not necessarily linked to an investigation.

The SDT can impose conditions on firms or solicitors as part of its final outcome. It has a wide discretion as to what conditions it can impose. How we monitor the condition will depend on the nature of the condition imposed.

Rebuke

We rebuke an individual or a firm to show disapproval where there has been a moderately serious breach of our requirements or standards.

Registered foreign lawyer (RFL)

An RFL is a foreign-qualified lawyer who is registered with us and subject to our regulatory oversight, but with limited practice rights. RFLs may practise the law of their home jurisdiction, advise on English and Welsh law, and provide unreserved legal services, but they can only carry out most reserved legal activities in limited and supervised circumstances. Registration as an RFL allows a foreign lawyer to be a manager or owner of an SRA-regulated law firm.

Regulatory settlement agreement (RSA)

Under an RSA, we agree the facts and the outcome/sanction of an investigation with the firm, solicitor or individual involved in our investigation. RSAs allow us to protect both consumers and the public interest by reaching appropriate outcomes swiftly, efficiently and at a proportionate cost. Unlike agreed outcomes – which must be approved by the SDT – RSAs do not involve the SDT. The agreed sanction will be within the SRA's powers.

Reprimand

A sanction the SDT imposes for the lowest level of misconduct brought to it and where it considers no other greater sanction is necessary.

Respondent

The respondent is the firm, solicitor or other person against which or whom we or the SDT take enforcement action.

Roll of solicitors

This is a record of solicitors that we have authorised to practise English and Welsh law. Not all solicitors on the roll will actively be practising as a solicitor.

Sanctions

Actions taken to discipline firms, solicitors or other people we regulate to prevent similar behaviour by them or others in the future, and to maintain standards and uphold public confidence in the profession.

Section 43 order

A sanction we issue to non-lawyers working in the profession, eg non-lawyer managers and employees such as legal secretaries. We restrict them from working in a law firm without our permission.

Section 99 order

A sanction we issue to non-lawyers working in the profession, disqualifying them from being an employee or from taking up certain activities, such as acting as a manager, the head of legal practice or the head of finance and administration.

Solicitors Disciplinary Tribunal (SDT)

An independent tribunal where we bring prosecutions against firms, solicitors and other people we regulate. It has powers which we do not, for example, it can impose unlimited fines for any type of rule breach and strike solicitors off the roll.

Strike off

A sanction where the SDT stops a solicitor from practising and their name is removed from the roll.

Suspension

Controls and/or sanction we or the SDT can impose.

We can suspend or revoke the authorisation certificate of an ABS or a traditional law firm. This effectively stops them from practising for a period or indefinitely. The SDT can also revoke the authorisation of a traditional law firm.

We cannot suspend a solicitor's, REL's or RFL's practising certificate. Only the SDT can do this. A suspension can be for a fixed term or indefinitely.

Warning

We issue a warning to make an individual/firm aware that they have come close to a disciplinary sanction or control order and we are likely to act if the breach continues or is repeated.