Interventions
The Solicitors Regulation Authority (formerly the Law Society) has power to order an intervention into a solicitor's practice where it believes that the interests of the public are at risk. Interventions may be full or limited in type.
Full Intervention.
Interventions usually occur where there is a reason to suspect dishonesty on the part of the partners or where there are serious breaches of the Solicitors' Code of Conduct 2007 and/or the Solicitors' Accounts Rules.
Interventions can also take place to protect the public where a sole practitioner dies or becomes incapacitated.
The effect of an intervention is catastrophic. In practice it usually has the following consequences:
- The practice is closed;
- The practice’s bank accounts are frozen;
- The partners’ practicing certificates are suspended;
- The files are removed by a firm of solicitor agents appointed by the SRA;
- The files are disposed of to new solicitors appointed by the clients;
- Fee collection becomes difficult if not impossible;
- Intervention costs are high and are borne by the partners of the intervened in firm;
- Staff are usually made redundant;
- The liabilities of the business will crystallise;
- Often intervened solicitors end up insolvent;
- The partners are automatically referred for disciplinary proceedings;
- Challenges to the decision to intervene are difficult and costly and must be lodged within a very short time limit (eight days from the notice to intervene)
Once a resolution is passed to intervene in a practice the damage is effectively done. However it is possible, prior to there being a resolution to intervene, to enter into negotiation with the Solicitors Regulation Authority (SRA) and offer them realistic comfort and protection so that an intervention may be avoided or the consequences minimised. For more information see Voluntary closures and practice disposals below.
Once an intervention is ordered, the decision can be reviewed by the High Court. This is a difficult and expensive exercise with very strict time limits.
It is therefore imperative that you seek specialist advice and assistance in the following circumstances:
- If your firm is subject to a forensic accounting investigation by the SRA;
- If you suspect, or know, that acts of dishonesty or fraud have been committed by any member of your firm;
- If you suspect or know that there has been a serious breach of the Solicitors' Accounts Rules;
- If you are late in filing your annual S.34 accountant's report and have not obtained an extension of time from the SRA;
- If there are serious allegations or complaints being investigated by the SRA in conduct;
- If there have been serious breaches of undertakings by your firm;
- If there are bookkeeping or accounts problems resulting in a failure to provide reconciled client accounts.
- If you are your partners become seriously ill or suffer from mental health or substance abuse issues.
Limited Interventions
This is specifically designed solely to recover specific files from a solicitor. The consequences of this action are less dramatic than that of full intervention. However the fact that there has been a necessity to resolve to take this act in the first place often highlights greater concerns in the practice.
There are several members of the SAS who specialise in providing advice and assistance in respect of potential or actual intervention matters. Their details will be found in the members’ section of this site.
Voluntary closures and practice disposals
Sometimes a situation will arise where a solicitor need to close a practices without there being an obvious natural successor. This may be through retirement, illness or suspension of a sole practitioner. If the SRA is not satisfied that the practice will close in an orderly fashion then an intervention may be considered. This could have dire financial consequences with the combined effects of intervention costs and run-off cover leading to the bankruptcy of the solicitor. The SAS can assist you with this and may in certain circumstances be able to assist you in negotiating with the SRA for a voluntary closure, supervised by an SAS member, to take place.