In a significant ruling, the High Court has determined that the Solicitors Regulation Authority (SRA) cannot compel law firms to produce privileged documents without client consent. This decision, which the SRA plans to appeal, marks a substantial setback for the regulator, as it limits its ability to access certain evidence during investigations.
Mr Justice Butcher held that the terms of s.44B of the Solicitors Act 1974 “might be said to be equivocal” but are not sufficient to override the fundamental right of legal professional privilege (LPP). He noted that “it is not ‘compellingly clear’ that there is an override of LPP implied into s.44B” and that the SRA has not met the “high threshold” for a necessary implication.
Background to the Case
The case was brought by businessman Mohamed Amersi and his solicitors, Carter-Ruck, who sought a declaration that the SRA’s use of production notices under s.44B was unlawful. The SRA argued that serious wrongdoing by solicitors may be shielded from regulatory action without this power.
However, Butcher J decided that s.44B does not expressly override LPP and that “could easily have been provided for had that been intended”. He also noted that it is “not easy to see how, by a process of implication, the provision to be implied is such as to override the client‘s LPP, but not the solicitor’s own LPP”.
Implications of the Decision
Butcher J rejected the argument that finding the SRA did not have the power would “stultify” the statutory purpose of s.44B. He noted that there are many cases where the SRA can investigate without relying on a statutory override of LPP, such as cases of client complaints, workplace bullying and harassment, and cases involving the iniquity exception.
Mr Amersi stated that this is a landmark case, and that legal privilege is similar to a patient’s medical records, emphasizing the importance of confidentiality. A statement from Carter-Ruck added that the decision reinforces the principle that a client’s legal professional privilege is sacrosanct.
Response from the SRA
Jonathan Peddie, SRA executive director for investigations, enforcement and litigation, stressed the importance of the regulator having access to “all relevant evidence” when investigating potential wrongdoing, including privileged material. He noted that this is not only in the public interest but can also provide evidence in proving solicitors and law firms have not committed misconduct.
The SRA has stated that it respectfully disagrees with the court’s decision and is seeking permission to appeal. In the meantime, it is considering the judgment carefully and taking immediate steps to manage its operational implications, including providing guidance to staff regarding the handling of ongoing cases.
The regulator’s investigation was into alleged misconduct by Carter-Ruck in its work for Mr Amersi.