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SRA powers and client legal professional privilege: Part I

23 June 2020. Published by Graham Reid, Partner

Legal professional privilege gets a pretty good billing in the case-law.

It has been described as the “condition on which the administration of justice as a whole rests”1; as a “fundamental human right”2; it even outlasts death and dissolution3. In other words, it’s seen as rather important to the process of obtaining legal advice.

Of course, it’s not the only important thing when taking legal advice. The quality of legal advice is up there; so is the proper regulation of lawyers. Perhaps it’s not quite the same as a fundamental human right, but if there is going to be access to justice then clearly the lawyers ought to be held to proper standards.

This article looks at how one particular legal services regulator – the Solicitors Regulation Authority (SRA) – achieves a balance between the competing interests of protecting clients’ legal professional privilege entitlements and its obligations to regulate solicitors effectively.

This is the first of two articles. This one looks at the impact of client privilege on making reports to the SRA. Part II looks at the SRA’s statutory production notice powers, including under ss.44B-44BC, Solicitors Act 1974

Fundamental inconsistency
Before addressing this issue any further, it is important to acknowledge the fundamental inconsistency between the policy objectives here. Regulation of lawyers is important. It is difficult to achieve if the regulator can only look inside a matter file provided the client consents. On the other hand, legal professional privilege rests on the foundation that “...[a] client must be sure that what he tells his lawyer in confidence will never be revealed without his consent”4. These objectives are difficult to reconcile but that does not mean they can be ignored.

Client confidences revealed?
A good place to start is the end-point: the risk of revelation of client confidences. That means the Solicitors Disciplinary Tribunal (SDT), where the most serious allegations of solicitor misconduct are heard. Any complaint about a solicitor’s professional conduct could in theory end up in the SDT. It is therefore relevant to consider what protections are available for client privilege in the SDT.

The answer is ‘very few’. SDT hearings are heard in public, unless an affected person can show exceptional hardship or prejudice5. That means evidence about privileged advice can be heard by anyone sitting in the tribunal room. The SDT’s rules do not mention the risk of disclosure of client privilege as an example of exceptional hardship or prejudice. Of course, SDT decisions are routinely anonymised as regards references to the persons involved, but that doesn’t necessarily apply to live evidence at hearings6. Unfortunately, in many instances it is a relatively easy matter to work out the identity of the persons involved despite anonymisation, especially for those who have some knowledge of the underlying participants.

If, therefore, an SDT case directly concerns information that is subject to the client’s legal professional privilege, it is all but inevitable that the substance of that privilege will be revealed to a significant extent during the final hearing.

Nor is it an answer to point to the SDT’s discretion to hold hearings in private, anonymise identities in its written reasons, and so on. The point is that these are all discretions, whereas the foundation of legal professional privilege rests on a client’s certainty that – at the moment of advice-giving – his or her confidences will not be revealed in the future without that client’s consent. It’s no comfort for the client to be told that some future tribunal may have a discretion whether or not to reveal the lawyer’s advice to the outside world.

Of course, client confidences may also be revealed prior to reaching the SDT. The SRA has a power to disclose or publish any information arising from or relating to an investigation – see r.9.1 of the SRA Regulatory and Disciplinary Procedure Rules7. It follows that information imparted in confidence to the SRA during the course of an investigation may still be disclosed by it to third parties. Again, it’s no comfort to the client wishing to protect its privilege entitlements that this will only be done where it is in the public interest to do so, as the client would (with justification) argue that the public interest in allowing clients to obtain privilege protection outweighs all other considerations. Perhaps the SRA could be persuaded to agree not to exercise its powers under r.9.1, eg as a way of supporting ‘safe’ disclosure to the SRA on a limited purpose waiver basis, but it is unclear if the SRA would be willing to entertain such an approach (and past experience suggests probably not...).

In summary, the processes of SRA investigation and SDT hearings are, bluntly, as leaky as sieves when it comes to the certainty of protection of client privilege. Privilege, reports and SRA investigations. Now let’s go back to the beginning of things – the commencement of an SRA investigation. Most investigations are triggered by complaints, and complaints (for these purposes) come in two flavours: client-instigated, and ‘hostile’ complaints.

Where a client makes a complaint, it is relatively easy to infer that the client impliedly consents to the SRA viewing his or her matter file when investigating that complaint8. After all, the client in such a situation will usually be inviting the regulator to look inside that file. This suggests client privilege concerns will rarely arise if the client makes the complaint. Furthermore, the SRA could always adopt a belt and braces approach and seek express client consent – it ought to be forthcoming for obvious reasons.

However, complaints are not always made by clients. A particularly difficult scenario arises where the complaint is made by someone on the ‘other side’ ie a person who is actively hostile to the solicitor’s client’s interests. This kind of complaint might be motivated by a genuinely held perception that the solicitor has committed professional misconduct. Sometimes, however, there is a suspicion that the opponent is making a tactical complaint to the SRA, perhaps with a view to obtaining litigation advantage or documents, especially privileged ones. In these situations, the client 
whose solicitor is the object of complaint may have strong reasons to prevent his or her privileged information going anywhere near the regulator, let alone the other side. If the SRA were to ask for consent, this kind of client is likely to say ‘No!’.

‘Things to think about when your solicitor is being investigated by us’
Given the obviousness of the points made immediately above, one might have expected the SRA to have addressed this topic in its publications or codes – eg something like, ‘Things to think about when your solicitor is being investigated by us’.

Unfortunately, nothing of this kind exists at the time of writing. The SRA Principles and the Codes for Firms and for Solicitors make no reference to client privilege entitlements9. Neither do the SRA Application, Notice, Review and Appeal Rules, the SRA Regulatory and Disciplinary Procedure Rules or the Solicitors Act 1974. They are all silent on this fundamental human right and its interaction with SRA investigation processes.

SRA Guidance on reporting
There is some SRA Guidance however, entitled “Reporting and notification obligations”10. This says client privilege is a “relevant consideration” when a solicitor considers making a report to the SRA pursuant to paragraphs 7.7 and 7.8 of the Code for Solicitors11. It suggests that the obligation to report may require a solicitor to exercise his or her judgment relating to “competing considerations”, including legal professional privilege12. There is also a section in the Guidance headed “Legal professional privilege”. It emphasises that “particularly careful consideration” may be needed where the reporting concerns legal professional privilege.

 Click the link below to read the full article.

1 R v Derby Magistrates Court, Ex p B [1996] AC 487.
2 Special Commissioner and Another, Ex P Morgan Grenfell & Co Ltd, v R [2002] UKHL 21.
3 See Addlesee & Ors v Dentons Europe LLP [2019] EWCA Civ 1600.
4 R v Derby Magistrates, op. cit.

Solicitors (Disciplinary Proceedings) Rules 2019.
6 Questioning a witness about multiple persons identified only as ‘A’, ‘B’, ‘C’ etc is difficult and risks confusion and incorrect evidence.
7 Rule 9.1, “The SRA may disclose or publish any information arising from or relating to an investigation, either in an individual case or a class of case, where it considers it to be in the public interest to do so.”.

8 If such consent is not readily implied, the SRA could of course always ask for it at 
the start.
9 Para. 6.4 of the Codes does not count for current purposes.
10 See https://www.sra.org.uk/solicitors/guidance/ethics-guidance/reporting-notification-obligations/ , last accessed 29 April 2020.
11 Rule 7.7, “You report promptly to the SRA or another approved regulator, as appropriate, any facts or matters that you reasonably believe are capable of amounting to a serious breach of their regulatory arrangements by any person regulated by them (including you).” And rule 7.8, “Notwithstanding paragraph 7.7, you inform the SRA promptly of any facts or matters that you reasonably believe should be brought to its attention in order that it may investigate whether a serious breach of its regulatory arrangements has occurred or otherwise exercise its regulatory powers.” Similar 
provisions are in the SRA Code for Firms.
12 “Your obligation to report matters to us may require you to make judgments relating to competing considerations. By way of example, information may be sensitive, personal, confidential or covered by legal professional privilege.”