Reporting Misconduct to the SRA: SRA lawyer

Solicitors who manage firms often ask about the extent of their duty to disclose matters that have arisen, to the SRA. The Duty to Disclose is governed by O (10.4) which sets out that  ‘you must report to the SRA promptly, serious misconduct by any person or firm authorised by the SRA, or any employee, manager or owner of any such firm (taking into account, where necessary, your duty of confidentiality to your client).’√جª¬ø

Although this guidance seems on the face of it to be straightforward it is silent on the key issue which is, whether or not the person with the responsibility to report has to be satisfied that serious misconduct has arisen prior to reporting, or is the duty triggered merely upon being aware that there might be an issue? The usual questions that arise are;

• Am I tipping of if I ask for an explanation?√جª¬ø√جª¬ø
• Do I have to investigate and form my own conclusion before I report?
• Am I under a duty to raise the matter with the offending solicitor to get his/her explanation?

Until recently, the position was unclear, many practitioners believing that best practice was not to report until they have conclusively determined both relevant facts and that those constitute serious misconduct.

The SRA ran a consultation in 2018 on this issue. During their consultation, the SRA considered four potential options to define the obligation which were: a) belief, b) reasonable grounds to believe that there are facts capable of amounting to serious belief, c) facts you believe indicate a serious breach or d) facts or matters you reasonably believe indicate a serious breach!

In November 2018, the SRA applied to amend Rule 7 of the Code of Conduct for Solicitors, RELs and RFLs(“Solicitors’ Code of Conduct”) and rule 3 of the SRA Code of Conduct for Firms (“Firms’) Code of Conduct”) to:

• require individuals to, at the SRA’s request, investigate whether there have been any serious breaches that should be reported to the SRA.√جª¬ø√جª¬ø
• require authorised persons to report promptly to the SRA or another approved regulator any facts or matters they reasonably believe are capable of amounting to a serious breach of regulatory arrangements by any regulated person
• require authorised persons to inform the SRA promptly of any facts or matters that they reasonably believe should be brought to the SRA’s attention in order to  investigate whether a serious breach has occurred, or otherwise exercise its regulatory powers
• prohibit the detrimental treatment of any person making or proposing to report or inform the SRA of their reasonable belief of a serious breach, irrespective of whether or not the SRA or another approved regulator subsequently takes action

The application to the LSB set out the following reasoning for the change in the rules the SRA receives reports of facts or matters which could comprise a serious breach. First, it makes the point that reports to the SRA threshold for deciding when to open an investigation is that the concerns, if proven, are capable of amounting to a serious breach.

The test combines a subjective element (what the person making a report believes) with an objective element (the belief was reasonable bearing in mind the circumstances, information and evidence available to the decision-maker). This serves to avoid the reporting of mere allegations or suspicions and provides a balance on the spectrum between this on the one hand, and fully investigated findings on the other. The SRA believes that this also provides support for appropriate reflection, investigation and professional judgement.

The logic behind the new position is unassailable: early reports need to be made where the SRA might need to use powers to investigate or take urgent action to protect the public those making reports whereas a senior partner may not have the ability to properly investigate.

This test also takes responsibility from deciding whether or not to report away from the reporting solicitor, who is often someone who has worked closely with the solicitor for a number of years and may be torn between personal loyalty and an overriding obligation to run a practice that adheres to the highest professional standards.

In conclusion, the test therefore seems to be, if in doubt, report.