SRA Handbook

Revocation and suspension of authorisation

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Version 20 of the Handbook was published on 01/10/2018. For more information, please click 'History' Above

Rule 22: Revocation and suspension of authorisation

22.1

Subject to Rule 23, the SRA may revoke or suspend a body's authorisation, where:

(a)

in the case of an authorised body:

(i)

authorisation was granted as a result of error, misleading or inaccurate information, or fraud;

(ii)

the body is or becomes ineligible to be authorised in accordance with the criteria set out in Rule 6;

(iii)

[Deleted]

(iv)

the body has failed to provide any information required by the SRA under these rules;

(v)

the body has failed to pay any prescribed fee payable by the firm to the SRA;

(vi)

a relevant insolvency event has occurred in relation to the body or the sole practitioner is made the subject of bankruptcy proceedings or makes a proposal for an individual voluntary arrangement;

(vii)

the body makes an application to the SRA for its authorisation to be revoked or suspended;

(viii)

the SRA has decided to exercise its intervention powers under section 102 of and Schedule 14 to the LSA, Parts I and II of Schedule 1 to the SA, paragraph 5 of Schedule 14 to the Courts and Legal Services Act 1990 and Part II of Schedule 1 to the SA or paragraph 32 of Schedule 2 to the AJA and Part II of Schedule 1 to the SA, as appropriate;

(ix)

the body, or an owner, interest holder, manager or employee of the body or the sole practitioner fails to comply with the duties imposed by or under these rules or under any statutory obligations in relation to the body's business of carrying on authorised activities including payment of any fine or other financial penalty imposed on the body by the SRA, the Tribunal, the High Court or the appellate body;

(x)

where:

(A)

in the case of a licensed body, the body fails to comply with Rule 8.6(b) (prohibition on disqualified managers); or

(B)

in the case of an authorised body, the body fails to comply with Rule 8.6(c) (employment or remuneration of certain individuals);

and the manager or employee concerned was disqualified as a result of breach of the duties imposed upon the manager or employee by sections 176 or 90 of the LSA;

(xi)

the body does not comply with Rule 8.5 (compliance officers);

(xii)

the body fails to comply with Rule 8.6 (management and control);

(xiii)

for any other reason it is in the public interest; or

(xiv)

the body, where it is a responsible authorised body, has failed to comply with any obligations under the SRA's regulatory arrangements in respect of its overseas practices.

(b)

in the case of a licensed body

a non-authorised person holds an interest in the licensed body:

(i)

as a result of the person taking a step in circumstances where that constitutes an offence under paragraph 24(1) of Schedule 13 to the LSA (whether or not the person is charged with or convicted of an offence under that paragraph),

(ii)

in breach of conditions imposed under paragraphs 17, 28 or 33 of that Schedule, or

(iii)

the person's holding of which is subject to an objection by the SRA under paragraph 31 or 36 of that Schedule.

22.2

The SRA must not revoke or suspend an authorisation under this rule:

(a)

unless it has first provided the authorised body with an opportunity to provide representations to it regarding the issues giving rise to the proposed revocation or suspension;

(b)

unless it has first given the authorised body notice of its intention to revoke or suspend the authorisation; and

(c)

before the end of the period of 28 days beginning with the day on which the notice in (b) above is given to the body or any longer period specified in the notice.

Guidance notes

(i)

Rule 22.1(a)(x) refers to sections 90 and 176 of the LSA. Section 90 sets out the duty of non-authorised persons, as defined by the LSA, not to do anything which causes or substantially contributes to a breach by a licensed body, or by a manager or an employee of the licensed body who is an authorised person, of the duties imposed on them by section 176. Section 176 imposes the statutory duty on a regulated person to comply with the SRA's regulatory arrangements when practising through an SRA firm. Regulated person includes the firm itself as well as the managers and employees of the firm.

(ii)

Rule 22.1(b)(i) refers to the offence under paragraph 24(1) of Schedule 13 to the LSA. This is the offence of a non-authorised person who is required to notify the licensed body and the SRA of a proposal to take a step leading to acquiring a restricted interest in a licensed body taking the step prior to the SRA's approval. Rule 22.1(b)(ii) refers to breaches of the specific provisions about imposing conditions on approval of owners - see guidance note (ii) to Rule 15 above. Rule 22.1(b)(iii) refers to paragraphs 31 (the SRA having an objection to a notifiable interest) and 36 (the SRA having an objection to an existing restricted interest) of Schedule 13 to the LSA.

(iii)

In addition to the power to revoke or suspend authorisation, there are statutory divestiture procedures available to the SRA in respect of owners of licensed bodies. These are set out in Part 5 of Schedule 13 to the LSA. See also the guidance notes to Rule 15 for more information about other statutory powers relating to owners of licensed bodies.

(iv)

Revocation and suspension of authorisation is a discretionary power of the SRA. The SRA is unlikely to revoke or suspend authorisation if doing so at that time would present any risk to clients, the public, the protection of public money or to any SRA investigation.