High Court grants SRA first order to force bank to provide information

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By Legal Futures

14 September 2010

High Court: first order under new SRA powers

The High Court has granted the first order requiring a third party to provide the Solicitors Regulation Authority (SRA) with information, it has emerged.

The SRA has long had a power to require the production of documents for investigatory purposes, but section 44BB of the Solicitors Act 1974 (as amended by the 2007 Legal Services Act), extends it to third parties. SRA papers reveal that the High Court granted the order against a bank to assist in a serious and continuing investigation. The SRA declined to provide any more detail on the circumstances.

Under section 44BA, the SRA also has the power to ask the court to require a solicitor to attend an interview to explain documents or information, and the Law Society will shortly issue a practice note about this. It is likely to emphasise that solicitors have a duty to cooperate and provide an explanation of actions which, in the regulator’s reasonable opinion, give rise to any question related to the proper performance of their professional duties.

The practice note should also highlight that solicitors will from next month no longer be automatically insured for their costs if facing such an order – following the controversial SRA decision to remove the obligation to provide cover for defence costs in disciplinary cases from the minimum terms and conditions of insurance (see story).

Insurers can still provide such cover on a voluntary basis, and a draft of the practice note, seen by Legal Futures, recommends that “you should therefore make enquiries about this when seeking to obtain professional indemnity insurance”. The practice note says that a solicitor subject to such an order will not be paid costs other than in exceptional circumstances.

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