SRA Handbook

Applications, conditions and appeals

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Version 1 of the Handbook was published on 16/09/2011. For more information, please click 'History' Above

Part 1: Applications, conditions and appeals

Regulation 1: Form, timing and fees for applications

1.1

Applications under these regulations, or under any other rule which applies to a recognised body, its manager or employee, must comprise:

(a)

the prescribed form, correctly completed;

(b)

the fee or fees for the application, as determined from time to time by the SRA Board;

(c)

if the application is for recognition or for renewal of recognition, any prescribed contribution to the Solicitors' Compensation Fund;

(d)

such additional information, documents and references as may be specified by the SRA; and

(e)

any additional information and documentation which the SRA may reasonably require.

It is not necessary to submit all documents, information and payments simultaneously, but an application will only have been made once the SRA has received all of the documentation, information and payments comprising that application.

1.2

An application for renewal of recognition must be sent to the SRA so as to arrive on or before the renewal date.

1.3

A recognised body must notify the SRA on or before the renewal date if it does not intend to apply for renewal of recognition.

1.4

The SRA shall determine the amount of any fees required under these regulations and the SRA's decision shall be final.

1.5

The SRA may prescribe from time to time a fee moderation process under which a recognised body may make an application for the fee for renewal of recognition to be varied. A decision under this process shall be final.

1.6

Every applicant body must:

(a)

ensure that all information given in an application under these regulations is correct and complete; and

(b)

notify the SRA as soon as any information provided in an application under these regulations has changed.

Regulation 2: Initial recognition and renewal of recognition

2.1

The SRA may grant an application for initial recognition or renewal of recognition, if it is satisfied that the applicant body is a partnership, LLP or company which meets the conditions in (a) to (d) below:

(a)

the body complies with rules 15 and 16 of the SRA Practice Framework Rules in relation to:

(i)

its formation as a body corporate or partnership;

(ii)

its composition and structure, including any necessary approval of a participant under regulation 5; and

(iii)

its practising address (and if appropriate, its registered office) in England and Wales;

(b)

the body complies with the SRA Indemnity Insurance Rules;

(c)

the body complies with (or has a waiver of) rule 12 of the SRA Practice Framework Rules; and

(d)

if the body is a partnership, it has adopted a name under which it is to be registered, and which complies with Chapter 8 of the SRA Code of Conduct (Publicity).

2.2

The SRA may refuse an application for initial recognition if:

(a)

the SRA is not satisfied that a manager or a person with an interest in the body is a suitable person to be engaged in the management or ownership of a recognised body, taking into account that person's history, character, conduct or associations;

(b)

the SRA is not satisfied that the body's managers or owners are suitable, as a group, to operate or control a business providing regulated legal services; or

(c)

for any other reason the SRA reasonably considers that it would be against the public interest to grant recognition.

2.3

In reaching a decision under 2.2 the SRA may take into account:

(a)

any event listed in regulation 3.1 of the SRA Practising Regulations applying to a manager of the applicant body;

(b)

any other conduct on the part of a manager of the applicant body which calls into question his or her honesty, integrity or respect for law;

(c)

failure or refusal to disclose, or attempts to conceal, any matter within (a) or (b) above in relation to the application;

(d)

that the SRA is not satisfied that the managers of the applicant body, taken together, have sufficient skills and knowledge to run and manage a business which provides regulated legal services,

and any other facts which the SRA reasonably considers should be taken into account.

2.4

If, when considering an application for renewal of recognition, the SRA:

(a)

is not satisfied that the body's managers, taken together, are suitable to run and manage a business providing regulated legal services; or

(b)

considers that for any other reason it would not be in the public interest to renew the body's recognition,

the SRA may defer renewal of recognition pending a decision whether the body's recognition should be revoked under regulation 11.

2.5

A grant of initial recognition takes effect from the date of the decision unless otherwise stated.

2.6

Ability of SRA to impose conditions

(a)

When granting an application for recognition or for renewal of recognition the SRA may impose a condition in accordance with regulation 6.

(b)

The granting of recognition free of conditions under regulation 2 does not prevent the SRA subsequently imposing a condition under regulation 6.

Regulation 3: Fee determinations for acquisitions, mergers and splits

The turnover of a recognised body for the purpose of determining the fee for renewal of recognition is based on a historic turnover figure submitted to the SRA. Where in the 12 months following the submission of that figure a recognised body merges or splits, a notice of succession identifying all recognised bodies, licensed bodies and recognised sole practitioners affected by the merger or split and any resulting apportionment of the historic turnover figures for those firms will enable the SRA to ensure that the turnover figure on which the fee is based reflects the impact of the merger or split.

3.1

A recognised body which has succeeded to the whole or a part of one or more recognised bodies, licensed bodies or recognised sole practitioners must within 28 days of the change taking place deliver to the SRA a notice of succession in the prescribed form.

3.2

For the purposes of regulation 3.1, "succeeded" includes any taking over of the whole or any part of a recognised body, licensed body or recognised sole practitioner, for value or otherwise.

3.3

A recognised body which:

(a)

has split or ceded part of the practice to a recognised body, licensed body or recognised sole practitioner; and

(b)

wishes this change to be considered by the SRA when determining the recognised body's next fee for renewal of recognition

must within 28 days of the change taking place deliver to the SRA a notice of succession in the prescribed form.

3.4

A notice of succession delivered under these regulations must:

(a)

identify all recognised bodies, licensed bodies and recognised sole practitioners affected by the succession; and

(b)

provide details of any resulting apportionment of the turnover figures for those recognised bodies, licensed bodies and recognised sole practitioners.

3.5

A recognised body delivering a notice of succession under these regulations must seek the agreement of all affected recognised bodies, licensed bodies or recognised sole practitioners to the contents of the notice of succession.

3.6

Where a notice of succession is delivered to the SRA which has not been agreed by all affected recognised bodies, licensed bodies or recognised sole practitioners, the recognised body delivering the notice of succession shall be treated as having made an application for the SRA to apportion the turnover figures of the affected recognised bodies, licensed bodies or recognised sole practitioners for the purposes of determining the fee for renewal of recognition.

3.7

Before apportioning the turnover figures under regulation 3.6, the SRA will contact any affected recognised body, licensed body or recognised sole practitioner identified in the notice of succession who has not agreed with the notice of succession and may require the production of additional information.

3.8

A turnover figure submitted to the SRA shall be calculated in accordance with the SRA's prescribed method of calculation.

Regulation 4: Duties in relation to compliance

4.1

A recognised body must not take on a new manager without first being satisfied of that manager's eligibility, by:

(a)

checking that any solicitor has a practising certificate, that any REL or RFL is registered with the SRA, and that the practising certificate or registration is not subject to a condition which would preclude that person becoming a manager;

(b)

obtaining (and retaining, for production to the SRA if required), in respect of any lawyer authorised by an approved regulator but not by the SRA, written confirmation from the approved regulator to the effect that the lawyer is authorised by that approved regulator, entitled to practise and not subject to a condition or other restriction which would preclude that person becoming a manager;

(c)

obtaining (and retaining, for production to the SRA if required), in respect of any individual who is entitled to be a manager only by virtue of approval under regulation 5, written confirmation:

(i)

from the SRA that the individual concerned is approved under regulation 5; and

(ii)

from the individual concerned, details of any event which the body will have to declare when next renewing its recognition, which has occurred in relation to that individual since he or she was last a manager of a recognised body renewing its recognition; and

(d)

in relation to any body corporate, making checks and obtaining (and retaining, for production to the SRA if required) confirmations under (a) to (c) above in respect of every individual who is a manager of or who has an interest in that body corporate.

4.2

The following persons in a recognised body must not create any charge or other third party interest over their interest in the recognised body:

(a)

a partner in a partnership;

(b)

a member of an LLP;

(c)

a member or shareowner in a company except by holding a share as nominee for a non-member shareowner who is eligible to be a member or shareowner under rule 16.1 of the SRA Practice Framework Rules.

Regulation 5: Approval of an individual as suitable to be a manager

5.1

An individual who is not a lawyer of England and Wales, an REL, an RFL or an EEL must be approved by the SRA under this regulation in order to be:

(a)

a manager or owner of a recognised body; or

(b)

a manager of a body corporate which is a manager of a recognised body.

5.2

The following are not eligible for approval under this regulation:

(a)

a member (practising or non-practising) of any profession coming within the meaning of lawyer of England and Wales (including a solicitor);

(b)

an REL;

(c)

an RFL;

(d)

an EEL; and

(e)

a member (practising or non-practising) of any profession eligible for approval by the SRA under paragraph 2(2) of Schedule 14 to the Courts and Legal Services Act 1990;

except that an individual who is not a solicitor or a practising member of any profession of lawyers, but is a non-practising barrister or a non-practising member of another profession of lawyers, and who is prevented by his or her professional rules or training regulations from changing status so as to be able to practise through the recognised body as a practising lawyer, may apply for approval under this regulation.

5.3

The SRA has a discretion to reject an application under regulation 5 if it is not satisfied that the individual concerned is suitable to be involved in the provision of legal services, and to exercise influence over the conduct of the recognised body concerned because:

(a)

the applicant, the individual concerned or any recognised body, licensed body or authorised non-SRA firm in which that individual has previously been a manager, or owner, compliance officer or employee, has been:

(i)

reprimanded, made the subject of disciplinary sanction or made the subject of an order under section 43 of the SA, ordered to pay costs or made the subject of a recommendation to the Society or the SRA to consider imposing a condition by the Tribunal, or struck off or suspended by the court;

(ii)

(made the subject of an order under section 43 of the SA, by the Society or the SRA or rebuked or fined by the SRA under section 44D of the SA, or paragraph 14B of Schedule 2 to the AJA;

(iii)

intervened in by the SRA (or previously by the Society) or by any other approved regulator;

(iv)

notified in writing by the SRA (or previously by the Society) that it does not regard as satisfactory an explanation given at the SRA's (or the Society's) request; or

(v)

made the subject of disciplinary sanction by, or refused registration with or authorisation by, another approved regulator, professional or regulatory tribunal, or regulatory authority, whether in England and Wales or elsewhere,

in respect of a matter involving the individual concerned;

(b)

the individual concerned:

(i)

has been committed to prison in civil or criminal proceedings;

(ii)

has been disqualified from being a company director;

(iii)

has been removed from the office of charity trustee or trustee for a charity by an order within the terms of section 72(1)(d) of the Charities Act 1993;

(iv)

is an undischarged bankrupt;

(v)

has been adjudged bankrupt and discharged;

(vi)

has entered into an individual voluntary arrangement or a partnership voluntary arrangement under the Insolvency Act 1986;

(vii)

has been a manager of a recognised body or licensed body which has entered into a voluntary arrangement under the Insolvency Act 1986;

(viii)

has been a director of a company or a member of an LLP which has been the subject of a winding up order, an administration order or administrative receivership; or has entered into a voluntary arrangement under the Insolvency Act 1986; or has been otherwise wound up or put into administration in circumstances of insolvency;

(ix)

lacks capacity (within the meaning of the Mental Capacity Act 2005) and powers under sections 15 to 20 or section 48 of that Act are exercisable in relation to that individual;

(x)

is the subject of outstanding judgments involving the payment of money;

(xi)

is currently charged with an indictable offence, or has been convicted of an indictable offence or any offence under the SA, the Financial Services and Markets Act 2000, the Immigration and Asylum Act 1999 or the Compensation Act 2006;

(xii)

has been the subject of an order under section 43 of the SA;

(xiii)

has been disqualified from acting as a HOLP or a HOFA or from being a manager of, or being employed by, a licensed body or an authorised non-SRA firm;

(xiv)

has been the subject of an equivalent circumstance in another jurisdiction to those listed in (i) to (xiii); or

(xv)

has been involved in other conduct which calls into question his or her honesty, integrity or respect for law;

(c)

the applicant or the individual concerned fails to disclose, refuses to disclose or seeks to conceal any matter within (a) or (b) above in relation to the application.

5.4

Application for approval

(a)

The application for approval must be made by the recognised body or prospective recognised body concerned and may be made:

(i)

when applying for initial recognition; or

(ii)

at any time after recognition has been granted.

(b)

It is for the applicant body to demonstrate that the individual concerned meets the criteria for approval.

(c)

The applicant body must:

(i)

co-operate, and secure the co-operation of the individual concerned, to assist the SRA to obtain all information and documentation the SRA requires in order to determine the application;

(ii)

obtain all other information and documentation in relation to that individual which the prescribed form requires the body to obtain and keep; and

(iii)

keep all information and documentation under (ii) above for a period of not less than six years after the individual concerned has ceased to be a manager of the body.

(d)

The individual concerned must confirm in the application that the information supplied about him or her is correct and complete.

5.5

Approval

(a)

Approval takes effect from the date of the decision unless otherwise stated.

(b)

The SRA's decision to approve or refuse approval must be notified in writing to the applicant body and, separately, to the individual concerned.

(c)

If the applicant body is a recognised body it must not allow the individual concerned to become a manager until it has received written notice that the individual has been approved.

(d)

Approval continues until:

(i)

it is withdrawn; or

(ii)

two years have elapsed during which the individual has not been a manager of a recognised body;

whichever is the sooner.

5.6

The SRA may at any time require the production of information or documentation from:

(a)

an approved individual;

(b)

a recognised body in which an approved individual is a manager; or

(c)

the body which originally obtained approval for that individual and holds information and documentation under 5.4(c)(iii) above;

in order to satisfy the SRA that the individual met the criteria for approval or continues to meet the criteria for approval.

5.7

Withdrawal of approval

(a)

The SRA may decide to withdraw approval if it is not satisfied that an approved individual met the criteria for approval or continues to meet the criteria for approval or if information or documentation is not promptly supplied in response to a request made under regulation 5.6.

(b)

Subject to (c) below, withdrawal of approval takes effect on expiry of the notice period under regulation 8.2(b) or on such later date as may be stated in the notice.

(c)

If an appeal is made before the withdrawal of approval takes effect, the withdrawal of approval is suspended pending determination or discontinuance of the appeal, unless in the opinion of the SRA the proceedings on that appeal have been unduly protracted by the appellant or are unlikely to be successful.

5.8

Where withdrawal of approval relates to a director of a company, the SRA may set separate dates for that individual ceasing to be a director and disposing of his or her shares.

Guidance note

(i)

The approval process under regulation 5 will cease when recognised bodies are transitioned to be regulated under the SRA Authorisation Rules. Non-lawyers who are managers of recognised bodies at that time will be deemed approved as managers for the purpose of rule 8.6 of the SRA Authorisation Rules. The regulation 5 approval of non-lawyers who are not managers at that time will lapse. A fresh approval will need to be applied for under the SRA Authorisation Rules.

Regulation 6: Conditions on recognition

6.1

The SRA may impose one or more conditions on a recognised body's recognition:

(a)

when granting initial recognition;

(b)

when granting renewal of recognition;

(c)

when granting approval of an individual under regulation 5;

(d)

when deciding to withdraw approval of an individual under regulation 5; or

(e)

at any other time.

6.2

The purposes for which the SRA may impose a condition are set out in (a) to (g) below.

(a)

The SRA considers that:

(i)

the condition would limit, restrict, halt or prevent an activity or activities on the part of the body, or of a manager or employee of the body, which is putting or is likely to put at risk the interests of clients, third parties or the public, and

(ii)

it is in the public interest to impose the condition.

(b)

The SRA considers that:

(i)

the condition would limit the activities of a manager or employee of the body who is considered unsuitable to undertake a particular activity, either at all or save as specified in the condition, and

(ii)

it is in the public interest to impose the condition.

(c)

The SRA considers that:

(i)

the condition would limit, halt or prevent a risk to clients, third parties or the public arising from a business agreement or association which the body has or is likely to enter into, or a business practice which the body has or is likely to adopt, and

(ii)

it is in the public interest to impose the condition.

(d)

A relevant insolvency event within the meaning of paragraph 32(1A) of Schedule 2 to the AJA has occurred in relation to a recognised body, and:

(i)

the event has not triggered expiry of recognition under regulation 12, and

(ii)

the SRA considers that it is in the public interest to impose the condition.

(e)

The SRA considers that imposing the condition will, in the public interest, facilitate closer monitoring by the SRA of compliance with rules and regulations on the part of the body.

(f)

The SRA considers that imposing the condition will, in the public interest, require the body concerned to take specified steps conducive to the carrying on of efficient practice by that body.

(g)

The SRA considers, in any other case concerning a body which is currently recognised, that it would be in the public interest to impose the condition.

6.3

A condition imposed under this regulation takes effect from the date on which the condition is imposed unless a later date is specified in the condition.

Regulation 7: Change in composition of a partnership and temporary emergency recognition following a partnership split

7.1

Recognition may continue despite a change in the composition of a recognised body which is a partnership, subject to (a) and (b), 7.2 and 7.3 below.

(a)

A recognised body which is a partnership must cease to practise from the date of any failure to comply with Part 3 of the SRA Practice Framework Rules.

(b)

A recognised body which is a partnership must cease to practise from the date of any change which results in there being no remaining partner who was a partner before the change; the 28 day period in 12.1 below does not apply.

7.2

If a partnership change results in there being only one remaining principal who or which needs to be recognised as a recognised sole practitioner but could not reasonably have commenced an application in advance of the change, the firm need not cease to practise if the remaining principal:

(a)

is a solicitor or REL;

(b)

notifies the SRA within seven days;

(c)

is granted temporary emergency recognition under the SRA Practising Regulations.

7.3

If a partnership split brings into being a new partnership which is not a recognised body but is a legal services body which satisfies the requirements of rule 13 of the SRA Practice Framework Rules:

(a)

the SRA must be notified within seven days; and

(b)

temporary emergency recognition may be granted, under these regulations, subject to 7.5, 7.6 and 7.8 below, so as to enable the partners in the new partnership to practise through the new partnership for a limited period without breach of the law.

7.4

Following such a partnership split, the SRA will if necessary decide which of the groups of former partners will continue to be covered by the existing recognition and which must apply for a new recognition, and may apportion recognition fees and Compensation Fund contributions between the groups. Any such decision will be without prejudice to the outcome of any legal dispute between the former partners.

7.5

An application for temporary emergency recognition must be made on the prescribed form within seven days of the change and accompanied by all information and documentation the SRA reasonably requires.

7.6

The SRA may grant an application for temporary emergency recognition if the following conditions are met.

(a)

The SRA must be satisfied that the partners could not reasonably have commenced an application for recognition in advance of the change.

(b)

The partnership must otherwise comply with rules 15 and 16 of the SRA Practice Framework Rules in relation to its composition and structure and its practising address in England and Wales.

(c)

The partnership must comply with the SRA Indemnity Insurance Rules, and must have adopted a name under which it is to be registered and which complies with Chapter 8 of the SRA Code of Conduct.

7.7

If the principal(s) in the new firm could not reasonably have commenced an application for recognition in advance of the change, the new firm may practise from the date of the split provided that the following conditions are met:

(a)

the new firm is:

(i)

a partnership which complies with Part 3 of the SRA Practice Framework Rules in its formation, composition and structure; or

(ii)

a solicitor or REL sole practitioner;

and complies with the SRA Indemnity Insurance Rules;

(b)

the new firm notifies the SRA within seven days; and

(c)

the SRA grants the firm temporary emergency recognition.

7.8

Temporary emergency recognition:

(a)

may be granted initially for 28 days;

(b)

may be granted to have effect from the date of the partnership split or any other appropriate subsequent date;

(c)

may be extended in response to a reasonable request by the applicant;

(d)

must be extended (subject to (h) below) pending determination of a substantive application for initial recognition commenced during the currency of a temporary emergency recognition;

(e)

may be granted or extended subject to such conditions as the SRA thinks fit, in circumstances falling within regulation 6;

(f)

is to be treated as initial recognition for the purpose of these regulations;

(g)

if granted, cannot prejudice the discretion of the SRA to refuse a substantive application for recognition of the body under regulation 2 (which is also, for the purpose of these regulations, to be treated as initial recognition); and

(h)

in exceptional circumstances, and for reasonable cause, may be revoked at any time.

7.9

During the initial 28 day period, or such extended period as the SRA may allow, the new firm must:

(a)

cease to practise, and notify the SRA; or

(b)

commence a substantive application for recognition:

(i)

as a recognised sole practitioner under the SRA Practising Regulations, or

(ii)

as a recognised body under these regulations,

by submitting a completed application form, together with the prescribed fee and any Compensation Fund contribution required.

7.10

If a partner in a partnership which is a recognised body:

(a)

is committed to prison in civil or criminal proceedings;

(b)

becomes and continues to be unable to attend to the practice of the body because of incapacity caused by illness, accident or age;

(c)

becomes and continues to be a person who lacks capacity under Part 1 of the Mental Capacity Act 2005;

(d)

abandons the practice of the body; or

(e)

is made subject to a condition on his or her practising certificate or registration which would be breached by continuing as a partner;

and this results in there being only one active partner, that partner must inform the SRA within seven days.

Guidance note

(i)

If a partnership split brings into being a new partnership which is a licensable body (see rule 14 of the SRA Practice Framework Rules) an application may be made for temporary emergency authorisation under rule 25 of the SRA Authorisation Rules.

Regulation 8: Notification of decisions by the SRA 

8.1

When the SRA must notify reasons

(a)

The SRA must notify its reasons in writing when it:

(i)

refuses an application;

(ii)

grants an application subject to a condition; or

(iii)

refuses a permission required under a condition on a body's recognition.

(b)

The reasons must be given to the applicant body and to the individual concerned, when refusing approval of an individual under regulation 5.

8.2

The SRA must give 28 days written notice, with reasons:

(a)

to the recognised body concerned, when the SRA decides to impose a condition on the body's recognition, or revoke the body's recognition;

(b)

to the body and the individual concerned, when the SRA decides to withdraw an approval granted under regulation 5.

8.3

The SRA may shorten or dispense with the 28 day period under 8.2 in imposing a condition if it is satisfied on reasonable grounds that it is in the public interest to do so.

Regulation 9: Appeals

9.1

Before exercising its right of appeal to the High Court:

(a)

under paragraph 2(1)(a) of Schedule 2 to the AJA, against refusal of initial recognition;

(b)

under paragraph 2(1)(b) or (c) of that Schedule, against the imposition of a condition; or

(c)

under paragraph 2(2) of that Schedule, against refusal by the SRA to approve a step which, under a condition on the body's recognition, requires such prior approval,

a body may invoke the SRA's own appeals procedure.

9.2

A body may appeal to the High Court against the SRA's decision to revoke the body's recognition, but must first invoke the SRA's own appeals procedure.

9.3

A body, and/or the individual concerned, may appeal to the High Court against the SRA's decision:

(a)

not to approve the individual under regulation 3; or

(b)

to withdraw its approval of the individual under regulation 3,

but must first invoke the SRA's own appeals procedure.

9.4

Deemed refusal

(a)

An application for initial recognition under regulation 2 is deemed, for the purpose of any appeal under 9.1(a) above, to be refused on the 90th day after the SRA has received the application and all additional information and documentation required, and duly notified to the applicant on that day, if by the end of that day the SRA has not notified the applicant body of its decision.

(b)

An application for approval of an individual under regulation 5 is deemed, for the purpose of any appeal under 9.3(a) above, to be refused on the 90th day after the SRA has received the application and all additional information and documentation required, and duly notified to the applicant on that day, if by the end of that day the SRA has not notified the applicant body, and the individual concerned, of its decision.

9.5

Appeal time limits

(a)

Appeals under the SRA's own appeals procedure must be made within 28 days of notification of the SRA's reasons for its decision, or within 28 days of deemed refusal under 9.4 above.

(b)

Unless otherwise provided in rules of Court or in the relevant decision, an appeal to the High Court must be made:

(i)

within the period of 28 days from the date on which the notice of the decision that is subject to appeal is given to the appellant; or

(ii)

within a period of 28 days from the date on which the notice of the refusal of an appeal under the SRA's own appeals procedure is given to the appellant,

as appropriate.

9.6

An appeal under the SRA's own appeals procedure under 9.3(a) above shall be treated as an application for the purpose of these regulations.