The Solicitors Regulation Authority (SRA) does not have the power to requisition documents subject to legal professional privilege, the High Court has ruled.
In Carter-Ruck Solicitors & another v Solicitors Regulation Authority, Mr Justice Butcher ruled the SRA cannot require regulated persons to produce documents or information which is subject to their clients’ legal professional privilege (LPP) under s.44B of the Solicitors Act 1974, without a waiver from the client.
The decision was handed down on Monday, with Mr Justice Butcher stating that the high threshold for implying that LPP has been overridden by the SRA’s statutory power was not met, and there is no exception to the principle of LPP in the case of documents required by a legal regulator.
The SRA has already said it will seek to appeal the ruling, saying it “respectfully disagrees with the court’s decision”.
In a statement on the decision, Jonathan Peddie, executive director at the SRA, said the regulator has “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”. However, it is now “taking immediate steps to manage its [the ruling] operational implications”.
The case arose from an investigation launched by the SRA in September 2023, into law firm Carter-Ruck and its conduct while acting on behalf of businessman Mohamed Amersi.
Amersi instructed Carter-Ruck in a defamation claim against former MP Charlotte Leslie which was struck out by the High Court in June 2023.
The law firm denied any wrongdoing and the SRA issued notices to the firm to produce documents from Amersi’s client files. He declined to waive privilege.
Carter-Ruck then sought a declaration that the SRA is not entitled in law under s.44B to require the production of material subject to LPP, while the SRA sought a declaration that it does have 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.
Mr Justice Butcher concluded that “at best, from the SRA’s point of view”, the terms of s.44B of the Solicitors Act 1974 “might be said to be equivocal”.
He said: “That is not enough to override the fundamental right of LPP.
“It is not ‘compellingly clear’ that there is an override of LPP implied into s.44B. The SRA has not surmounted the ‘high threshold’ for a necessary implication.”
He added: “There is no authority which binds this court to reach the conclusion that there is such an implication. But this court is bound to find that there is no ‘noninfringement’ or permissible infringement exception to LPP in the case of documents required by a legal regulator.”
The SRA made admissions to the court that serious wrongdoing by solicitors may be shielded from regulatory action without this power.
Justice Butcher 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.”
Commenting further on the ruling, Jonathan Peddie said: “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.”
Carter-Ruck Solicitors & another v Solicitors Regulation Authority
