Amersi: Judgment awaited in challenge to SRA powers
The government needs to give both the Solicitors Regulation Authority (SRA) and Financial Conduct Authority (FCA) explicit powers to see privileged material when investigating lawyers, an anti-corruption charity has said.
This was necessary even if the SRA defeats the High Court challenge to its ability to view privileged documents, according to Spotlight on Corruption.
Last month, the High Court heard a claim brought by businessman Mohamed Amersi and his solicitors, top London media firm Carter-Ruck, who are seeking a declaration that the SRA’s use of production notices under section 44B of the Solicitors Act for the disclosure of legally privileged material is unlawful. Judgment is awaited.
Zainab Saleem, legal fellow at Spotlight on Corruption, wrote on its website this week that the charity’s court monitoring work bore out the SRA’s need to access privileged material to do its job, “showing these powers are crucial if the SRA is to be more than a paper tiger”.
She noted how, in two of the most significant anti-money laundering (AML) cases dealt with by the SRA – involving Dentons and Clyde & Co – the client refused to waive privilege but the SRA was still able to view the material.
Ms Saleem said the court challenge came at “a critical time” for both the SRA and the FCA, as the latter prepared to take over as the new AML supervisor for the legal sector.
“As the government sets out its plans for this major shake-up of AML supervision in primary legislation which is currently before Parliament, now is the time for proactive steps to secure effective powers for regulators tasked with oversight of the legal profession,” she said.
“This court challenge by Carter-Ruck and Amersi is a big wake-up call that these powers need to be spelled out in black and white. Even if this case is resolved in the SRA’s favour, it will leave the FCA without the essential powers needed to regulate lawyers effectively for compliance with their AML obligations.”
Ms Saleem said the power to compel privileged information was “crucial” for the SRA to do its job effectively.
“This power is especially important for enforcing AML rules, but has also been a vital tool for investigating other forms of professional misconduct that are equally important for the wider public to feel the benefits of a functioning regulatory system.
“So while the outcome of this particular legal challenge may be uncertain, there should be no doubt that Parliament needs to step in to give both the SRA and the FCA clear statutory powers. Only then will a power that has been assumed for decades be foolproof from future challenges.”
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