The Solicitors Regulation Authority does not have the power to requisition documents subject to legal professional privilege, the High Court found today.
Lawyers and campaigners have described the ruling as a ‘huge blow’ to the regulator, which has already signalled its intention to appeal.
Under s.44B of the Solicitors Act 1974. Mr Justice Butcher ruled in Carter-Ruck Solicitors & another v Solicitors Regulation Authority, the SRA cannot require regulated persons to produce documents or information which is subject to their clients’ legal professional privilege, and that privilege is not waived. The regulator has used s.44B ‘for many years’ to obtain LPP material from regulated persons.
The issue arose from an SRA investigation which began in 2023 into the conduct of defamation firm Carter-Ruck while acting for businessman Mohamed Amersi.
Amersi instructed Carter-Ruck in a defamation claim against former MP Charlotte Leslie which was dismissed by the High Court in June 2023. The Court of Appeal refused permission to appeal.
Leslie said at the time she would be making a complaint to the SRA about the firm. In a statement at the time, Carter-Ruck ‘strongly rejected’ any suggestion of misconduct.
Carter-Ruck sought a declaration that the SRA is not entitled in law under s.44B to require the production of material subject to LPP. The SRA sought a declaration that it does have this entitlement.
The regulator argued that it has power to require production of documents subject to the client’s privilege on the basis of ‘statutory override’: namely that s. 44B provides that power and overrides the client’s LPP.
However, Mr Justice Butcher said he was ‘not persuaded that what would be involved in a finding that s. 44B did not constitute a statutory override of LPP would constitute “stultification” of any part of the purpose of providing for proper investigation of solicitors, as opposed to “impeding” that purpose.
He added: ‘It appears that whether or not there is a statutory override of LPP will make no difference to the ability of the SRA properly to investigate most cases where an investigation is required. Even where documents/information subject to the client’s (unwaived) LPP might be relevant, it may not be crucial or decisive. In my view, the fact that there may be some proportion of a limited category of cases in which the investigation cannot be performed as thoroughly as is desired by the SRA, or even cannot be performed at all, falls within the category of there being an impediment to the fulfilment of the statutory purpose, rather than its stultification.’
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A spokesperson for Carter-Ruck said: ‘This is clearly a landmark decision for the legal profession and its clients but at its heart is a simple but fundamental principle – namely that, in the absence of an express statutory requirement to the contrary and with very few exceptions, a client’s legal professional privilege is sacrosanct.
‘Under the professional rules applicable to solicitors, Carter-Ruck was required to defend Mr Amersi’s privilege and we stood shoulder to shoulder with him in doing so. We welcome the judge’s careful judgment, which confirms that our interpretation of the law was correct, and which justifies the approach we adopted in this investigation.’
Jonathan Peddie, SRA executive director of investigations, enforcement and litigation, said the SRA would be seeking permission to appeal. He added: ‘It is vital that we have access to all relevant evidence when investigating potential wrongdoing. This enables us to fulfil our regulatory role to protect the public and uphold the integrity of the legal profession. Our ability to get to the truth of many matters may be compromised if we can no longer access information protected by legal professional privilege.
‘Having access to this information is not only in the public interest, but it can also provide evidence in proving solicitors and law firms have not committed misconduct. Not all clients may wish to waive privilege to allow their solicitor to demonstrate that. This case raises complex and important questions about how we have, for many years and without legal challenge, used our powers under section 44B of the Solicitors Act 1974 to obtain information relevant to our investigations.
‘We respectfully disagree with the court’s decision, and given the significance of the issues involved, are seeking permission to appeal. In the meantime, we are considering the judgment carefully and are taking immediate steps to manage its operational implications, including providing guidance to our staff regarding the handling of ongoing cases.’
Claire Cross, a partner at Corker Binning, said the judgment was a ‘huge blow to the SRA, which has long asserted that it must be able to review legally privileged material to properly investigate misconduct by solicitors. ‘This ruling will make its job far more difficult,’ said Cross.
Susan Coughtrie, co-founder and co-chair of the UK Anti-SLAPP Coalition, said: ‘Today’s judgment is deeply concerning, and will leave the SRA completely toothless when it comes to tackling SLAPPs and holding lawyers accountable for abusive litigation conduct. Stripping the regulator of one of its most important tools for establishing breaches, will inevitably have a negative impact on its ability to ensure that solicitors are not only upholding their duty to act in their client’s interest, but also their duty to the courts and to uphold the rule of law.’
The judgment ‘should be a real wake-up call for Parliament’, said Dr Helen Taylor, deputy director of campaign group Spotlight on Corruption. ‘This ruling is a major blow for the SRA - and for the public interest - in holding lawyers to account, and leaves the legal regulator little more than a paper tiger. The SRA simply cannot do its job if the inner workings of a law firm are a black box. After decades of complacency about a power assumed to exist, this judgment should be a real wake-up call for Parliament to urgently put these powers beyond challenge.’
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