Key Factors | Solicitor Insure

Outcomes

The approach by the SRA has seen a trend towards more cases being resolved by “Agreed Outcomes” The SRA recovers their costs associated with the hearing from the law firm/individual that is the subject of the hearing, this increases with the length of the hearing and if it progresses to SDT. In addition to the law firm having to cover the SRA costs there are the costs associated with the law firm’s representation to consider, combined they easily mount up to a level that can have a material impact on the balance sheet. Outcomes include some of the following;

Rebuke or Warning
Unlimited fines
Control of practice
Suspension
Striking off order

The need for protection

Investigations can be long, complex and stressful including formal interviews with investigative officers. Where cases proceed to a hearing before SDT the overall process can take years, which places enormous stress and uncertainty on individuals and firms

Financial Protection

Maximum penalties of £50 million for an individual or £250 million for the entity apply in the case of licensed bodies (Alternative Business Structures or ABS) and the individuals that work in them. Significant costs implications with any SRA investigation, the regulator often ordering the individual or firm to pay their own costs (the SRA aim to maximise recovery of their costs and have recently begun to appeal costs orders).

A straightforward short case at the SDT is likely to result in a prosecution costs order of tens of thousands of pounds, in addition to fines and the costs of defending the case itself. Even in the event of success, firms are not automatically entitled to recover their costs. SRA maximise recovery of their costs which means, even if successful you are not automatically entitled to recover your costs. Cost of representation can quickly escalate as the case moves through SRA Hearing and possibly on to SDT

Reputational Aspects

The SRA can and often does publish allegations prior to completion of its investigations with huge distress to the individual concerned and reputational damage to their Firm. These result in significant unwanted press attention. Below are some examples of cases which in recent years have attracted negative press and exposure as per the examples below

In addition, unproven allegations can be published causing distress to individuals and reputational damage to their firms. Unwanted press attention and reputational damage for those “name checked” can occur Increasing SRA scope of powers i.e. Workforce diversity, inappropriate social media and sexual conduct cases are now commonly pursued, and an additional aspect of concern.