The Regulatory Role of the SRA — SQE1 FLK1 Legal Services

A solicitor acting for a seller opens the completion statement prepared by the buyer's solicitor. There is an obvious arithmetical error in it. The deposit already paid has not been deducted, so the balance shown as payable on completion is £15,000 more than the contract requires. Our solicitor says nothing, and completes the sale on those figures. No false statement is made to anyone. Was that dishonest? No. Was it a breach of the SRA Principles? Yes.

The gap between those two answers is most of this episode. This is The Regulatory Role of the SRA, the first topic in Legal Services. Who is allowed to do legal work at all? What standards bind you once you do it? And what happens when you fall short? Keep our seller's solicitor in mind. They come back.

Here is the route. What the SRA is, and the seven Principles above everything. Then the Legal Services Act 2007, and the six activities nobody may do without authorisation. Then the two Codes, one for you and one for your firm. Then the duties that beat your client's instructions. Then insurance, equality, and what the regulator can do to you.

Start with the body. The Solicitors Regulation Authority is the independent regulator of solicitors and law firms in England and Wales. It is a subsidiary of the Law Society, but acts independently when it sets standards and enforces rules. Its purpose is worth one line of memory. The SRA exists to protect the public, not to protect solicitors. And it regulates by risk, setting broad Principles rather than a rule for every situation.

Seven Principles sit at the top, and they apply to everyone the SRA regulates. One. You act in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice. Two. You uphold public trust and confidence in the profession. Three. You act with independence. Four. With honesty. Five. With integrity. Six. In a way that encourages equality, diversity and inclusion. Seven. In the best interests of each client.

Now the rule that decides more exam questions than any other. When the Principles pull against each other, Principles 1 and 2 win. Duties to the rule of law and to public confidence override your duty to any individual client. A solicitor defends a civil fraud claim. The client says a former employee will describe a meeting both of them know never took place, and instructs the solicitor to call that witness. Allowed? No.

Principle 7 does not license it. The solicitor must refuse to call the evidence and, if the client will not relent, must cease to act. Notice what does not help. Explaining the risks does not help. Leaving it to the judge to spot the lie does not help.

Which brings back our seller's solicitor and the £15,000. Honesty, Principle 4, is about deceit. Did you say or do something untrue, judged by the standards of ordinary decent people? That solicitor said nothing untrue at all. Integrity, Principle 5, is wider. It imports the higher standards the profession expects, and the courts have confirmed that a solicitor can be honest and still lack integrity. Wingate v SRA is the name to hang that on.

Taking the benefit of the other side's obvious error is a want of integrity. Paragraph 1.2 of the Code forbids taking unfair advantage of clients or others. Their arithmetic is not your windfall.

And the Principles reach beyond client work. A partner who repeatedly humiliates a paralegal may breach no paragraph of any Code, and still breach Principle 2 and Principle 5. The Codes do not exhaust your obligations.

Now the statute. The Legal Services Act 2007 is the framework for regulating legal services in England and Wales. It created the Legal Services Board as the oversight regulator above the approved regulators, supervising them against eight regulatory objectives. The SRA cannot bring new rules into force alone.

Six categories of legal work are reserved, and only an authorised person may carry them out. Doing one when you are not entitled to is a criminal offence under s.14 of the Act. On indictment, up to two years' imprisonment or a fine. One. Rights of audience, appearing before and addressing a court. Two. The conduct of litigation. Three. Reserved instrument activities, the conveyancing documents that go to the Land Registry.

Four. Probate activities, preparing the papers on which to obtain a grant of probate or letters of administration. Five. Notarial activities. Six. The administration of oaths. Now test the boundary. A former paralegal, authorised by nobody, drafts a widow's will for £350. Offence? No. Will drafting is not reserved. The same person prepares the papers for a grant of probate. Offence? Yes.

Solicitors are not the only authorised persons. Barristers answer to the Bar Standards Board. Licensed conveyancers to the Council for Licensed Conveyancers, which can authorise them for conveyancing and probate work both. Notaries, costs lawyers and CILEX practitioners each hold their own slice of that list.

And it cuts the other way. A solicitor admitted five years ago, with no advocacy qualification beyond admission, cannot run a Crown Court jury trial. Rights of audience on admission reach the lower courts. The higher courts need the higher rights of audience qualification, and a supervising partner cannot supply it. The 2007 Act also opened up ownership, letting people who are not lawyers own and manage firms doing reserved work. Those are alternative business structures, licensed rather than authorised, and held to the same standards.

Note the date the rulebook changed. 25 November 2019, when the SRA Standards and Regulations replaced the old SRA Handbook. Shorter, and deliberately principles-based. Seven Principles at the top. Two Codes of Conduct beneath them, one for solicitors and one for firms. Then the Accounts Rules and the rest.

The Code of Conduct for Solicitors applies to you personally, wherever you work. Private practice, in-house, freelance, and it makes no difference whether your employer is authorised by the SRA at all. A director tells an in-house solicitor to write to a supplier saying a payment has been made when it has not. The letter is not sent.

The Code of Conduct for Firms binds the firm as an entity, and every authorised firm appoints two compliance officers. A Compliance Officer for Legal Practice, the COLP, for regulatory compliance. And a Compliance Officer for Finance and Administration, the COFA, for the Accounts Rules.

But a compliance officer is not a shield. Paragraph 7.7 gives you your own duty to report anything you reasonably believe capable of amounting to a serious breach. Telling your COLP discharges it only if you understand the officer will report it on. An associate reports a partner who backdated three letters to hide a missed deadline. The COLP says nothing will go to the SRA. The duty is hers again.

And cooperate. Responding promptly to the SRA is a freestanding duty. Ignore a request and two reminders over six weeks and you are in breach, however impeccable your handling of the underlying matter.

Overriding duties next, and the biggest is the duty to the court. You must not mislead the court, or allow the court to be misled. No submission you know to be false. No case you know to be false. And there is a positive limb that surprises people. If you know of an authority adverse to your client's case, likely to have a material effect on the outcome, you must draw it to the court's attention.

Yes, even where it kills your claim, and even where the other side has missed it. Paragraph 2.7 still says cite it. Argue that it is distinguishable, by all means. Do not let the judge decide in ignorance of it.

Even where it kills your claim, and even where the other side has missed it. Paragraph 2.7 still says cite it. Argue that it is distinguishable, by all means. Do not let the judge decide in ignorance of it.

When a firm closes, run-off cover carries the protection on for six years. Insurance is written on a claims-made basis, so what matters is when the claim is made, not when the mistake happened. A firm that shut 18 months ago still answers a claim made today. The Compensation Fund is different. A fund of last resort for dishonesty and failures to account, and it pays no negligence claims.

And if cover lapses, stop. A firm whose policy expired four months ago, with the extended policy period gone, must cease practice immediately and report it promptly. Not finish the three completions due this week. Cease.

Equality, and two obligations run in parallel. Principle 6 requires you to encourage equality, diversity and inclusion. The Equality Act 2010 binds you as a service provider and as an employer. Nine protected characteristics. Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.

Direct discrimination is treating someone less favourably because of a protected characteristic. Decline a purchase client because of his religion, then take a comparable client three days later, and that is direct. Religion is not a characteristic for which direct discrimination can be justified. Indirect discrimination is the neutral rule with the unequal effect. A full-time-only vacancy still disadvantages women, and the firm has to justify it.

Harassment is unwanted conduct related to a protected characteristic, with the purpose or effect of violating dignity or creating a hostile, humiliating or offensive environment. Effect alone is enough, so affectionate banter is no answer. And related to is wide, so it does not matter that the trainee mocked as gay is not gay. Victimisation is detriment for doing a protected act.

And the duty to make reasonable adjustments for disabled clients is anticipatory. You plan for it. You do not wait to be asked. A registered blind client asks for the client care letter as an accessible electronic file. The firm must provide it, and may not pass the cost on.

So what can the SRA do to you? A written rebuke on your record. A financial penalty, up to £25,000 for individuals and traditional firms, raised from £2,000 in 2022, with higher limits for licensed bodies. And unlimited where the misconduct relates to economic crime, since the Economic Crime and Corporate Transparency Act 2023. Then conditions, suspension, intervention.

Intervention needs no court order and no criminal charge. A sole practitioner's office locked for three weeks, whereabouts unknown, client account short by about £120,000. The SRA can close the practice and take the files and the money at once. Above all of it sits the Solicitors Disciplinary Tribunal, which alone can strike a solicitor off the roll.

And the line that splits this whole subject is dishonesty. Take £85,000 from client account to pay the practice's running costs, knowing it is not allowed, and repayment and remorse will not save you. That goes to the tribunal, and save in exceptional circumstances proved dishonesty results in strike-off. Bolton v Law Society is the name for that. Our seller's solicitor is nowhere near it.

One more body, and candidates mix it up constantly. The SRA deals with conduct and regulatory breaches. The Legal Ombudsman deals with poor service. Delay, unanswered calls, a final bill nearly double the estimate.

Then two limits, and both must be met. Within one year of the act or omission, or of when the client should reasonably have realised there was cause for complaint. And within six months of the firm's final written response. The ombudsman can order fees refunded and compensation of up to £50,000.

Last, the most dangerous promise a solicitor can give. Paragraph 1.3 requires you to perform all undertakings you give, within any agreed timescale or otherwise within a reasonable time. An undertaking is any statement, by you or on your behalf, to someone who reasonably relies on it. No particular form is needed. Oral, an email, a line in a routine letter.

And it binds you personally. Undertake to discharge a mortgage on completion, and if the proceeds fall short you must still discharge it. The promise was yours, not your client's. Only the person you gave it to can release you.

A word on how SQE1 tests this. You will not be asked to recite paragraph numbers or case names. You get a scenario, five answers, and one instruction. Pick the best. So learn the Principles, the six reserved activities and the thresholds. The two case names in this episode are memory pegs, nothing more.

If you keep only three pegs, keep these. The seven Principles, and that 1 and 2 beat 7 whenever they collide. Wingate v SRA, where a solicitor can be perfectly honest and still lack integrity. And Bolton v Law Society, where proved dishonesty means striking off, save in exceptional circumstances. Honest, dishonest, and the country in between.

Four traps. One. Do not assume that all legal work is reserved. Most of it is not. Legal advice, contracts, negotiation, mediation, employment tribunal advocacy, all unreserved. The reserved list is short, specific and closed, and everything else is open to anyone.

Two. A COLP is not a shield. Your firm having a compliance officer does not remove your own duty to report a serious breach. Telling the officer discharges it only if you understand the matter will actually reach the SRA. Individual and firm obligations run in parallel.

Three. Complaints must be handled free of charge, and the client must be told about the procedure in writing at engagement, not when they finally complain. If a complaint is unresolved after eight weeks, tell them in writing about the Legal Ombudsman.

Four. Principle 6 asks more of you than the Equality Act does. The Act prohibits discrimination. The Principle requires you to encourage equality, diversity and inclusion. Not discriminating is the floor, not the obligation.

Quick check. A man is charged with burglary. In conference he tells his solicitor, in terms, that he broke into the house and took the items listed in the charge. He nevertheless instructs the solicitor to enter a not guilty plea, because he believes the prosecution cannot prove it. The only identification comes from a neighbour who saw the burglar at a distance and at night.

Three candidate answers. One. No, because a solicitor may not act for a client who has admitted the offence. Two. Yes, and the solicitor may advance any defence the client instructs, the plea being the client's choice. Three. Yes, but the solicitor may only test the prosecution case and may not assert innocence. Pause here if you want a moment.

The answer is three. A client who has admitted guilt in conference is still entitled to plead not guilty and to put the prosecution to proof, and the solicitor may continue to act. What the solicitor may not do is mislead the court, or advance a case that is not properly arguable. So probe the identification, cross-examine the neighbour, submit that the burden has not been discharged.

But do not assert that he did not do it, do not call him to deny it, and do not run an alibi. Why the others fail. Option one loses the right to put the prosecution to proof, which an admission in conference does not touch. Option two treats the plea as a licence to advance a false case.

Five things to take away. One. Seven Principles, and when they collide, 1 and 2 beat 7. Duties to the rule of law and to public confidence come before any individual client. Two. Six reserved activities, and doing one without authorisation is a criminal offence.

Three. The Code of Conduct for Solicitors follows you personally, wherever you work, and your firm's Code is a separate obligation on the firm. Four. Insurance is compulsory, £2 million or £3 million depending on how the firm is constituted, with six years of run-off when it closes.

Five. Service complaints go to the Legal Ombudsman, conduct goes to the SRA, and the worst cases go to the Solicitors Disciplinary Tribunal, which alone can strike you off. And back to our seller's solicitor. Honest throughout, and still in breach, because integrity asks more than honesty does. Next time, Money Laundering.

Practise this topic with exam-style questions at sqe1prep.co.uk. This episode is for education and exam revision only, not legal advice, and we are not affiliated with or endorsed by the SRA or Kaplan.