SRA Handbook

SRA Authorisation Rules 2011

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Version 5 of the Handbook was published on 01/10/2012. For more information, please click 'History' Above

SRA Authorisation Rules for Legal Services Bodies and Licensable Bodies 2011

Rules dated 17 June 2011

commencing in respect of licensable bodies, on the designation of the Law Society as a licensing authority under Part 1 of Schedule 10 to the Legal Services Act 2007; and in respect of legal services bodies, on 31 March 2012

made by the Solicitors Regulation Authority Board, under sections 79 and 80 of the Solicitors Act 1974, sections 9 and 9A of the Administration of Justice Act 1985 and section 83 and Schedule 11 to the Legal Services Act 2007, with the approval of the Legal Services Board under paragraph 19 of Schedule 4 to the Legal Services Act 2007.

Part 1: Interpretation and applications

Rule 1: Interpretation

1.1

The SRA Handbook Glossary 2012 shall apply and, unless the context otherwise requires:

(a)

all italicised terms shall be defined; and

(b)

all terms shall be interpreted,

in accordance with the Glossary.

Guidance notes

(i)

The Glossary definition of "owner" relates to anyone holding a material interest, together with any person who is a partner in a partnership (including salaried partners) regardless of the extent of their interest.

(ii)

When assessing whether a person is an owner with a "material interest", the calculation of the person's interest takes into account not only that person's interest, but also the interests of any associates. "Associates" is defined for these purposes in accordance with paragraph 5 to Schedule 13 of the LSA and includes relationships where the Act assumes a likelihood of influence such as employer over employee.

Rule 2: Form, timing and fees for applications made under these rules

2.1

All applications under these rules 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)

such additional information, documents and references considered by the SRA to be necessary to enable it to discharge its functions under these rules, as may be specified by the SRA; and

(d)

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

2.2

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.

Guidance notes

(i)

Application forms and guidance notes can be found on the SRA website.

(ii)

All parts of the application form must be fully completed. Where forms are only partially complete or where supporting information or documents are still to be provided, the application will not be deemed to have been made and the decision period in Rule 5.2 will not start to run.

Rule 3: Application information and notification of any change following application

3.1

The applicant body must:

(a)

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

(b)

notify the SRA as soon as it becomes aware that any information provided in its application under these rules has changed.

Guidance notes

(i)

During the application process an applicant body must notify the SRA of any changes to details or information provided as part of the application including notifying new information that the applicant body would have been required to supply if it had been known at the time of the application. It is an offence under the LSA (see Schedule 13 paragraphs 10-12) not to inform the SRA if there is any change to:

(a)

the list of non-authorised persons who hold or are expected to hold a material interest in the applicant body, and

(b)

the extent or nature of those interests held or to be held.

(ii)

Authorised bodies are subject to similar notification requirements under Rule 8.7.

Part 2: Authorisation applications and decision period

Rule 4: Applications for authorisation

4.1

A licensable body or a legal services body may make an application for authorisation in accordance with these rules.

4.2

An application by a licensable body for authorisation must include a statement about what reserved legal activities the body seeks authorisation for.

4.3

Where an application by a licensable body for authorisation relates to more than one reserved legal activity, the SRA may grant the application in relation to all or any of them.

Rule 5: Decision period

5.1

The SRA must:

(a)

decide an authorisation application;

(b)

notify the applicant body of its decision;

(c)

if it decides to refuse the application, set out in the notice the reasons for the refusal;

before the end of the decision period.

5.2

The decision period is the period of 6 months beginning with the day on which the application is made to the SRA in accordance with these rules.

5.3

The SRA may, on one occasion, give the applicant body a notice (an "extension notice") extending the decision period by a period specified in the notice.

5.4

But:

(a)

an extension notice must only be given before the time when the decision period would end, but for the extension notice; and

(b)

the total decision period must not exceed 9 months.

5.5

An extension notice must set out the reasons for the extension.

Guidance notes

(i)

See Rule 2.2 above for when an application is made.

(ii)

The SRA will extend the period for making a decision if it considers this necessary for the proper consideration of the application (see paragraph 2 of Schedule 11 to the LSA).

(iii)

The means of notice or notification can include any form of written electronic communication normally used for business purposes, such as emails.

Rule 6: Determination of authorisation applications

6.1

The SRA will determine applications for authorisation, so far as is reasonably practicable, in a way:

(a)

which is compatible with the regulatory objectives including the objective of improving access to justice; and

(b)

which the SRA considers most appropriate for the purpose of meeting those objectives.

6.2

The SRA may only grant an application for authorisation if the conditions in (a) to (d) below are met:

(a)

if it is an application for recognition, the applicant body is a legal services body;

(b)

if it is an application for a licence, the applicant body is a licensable body;

(c)

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

(d)

the SRA is satisfied that upon authorisation, the body will be in compliance with the following rules:

(i)

SRA Indemnity Insurance Rules;

(ii)

Solicitors' Compensation Fund Rules;

(iii)

Rule 8.5 (compliance officers), including any necessary approval of a candidate under Part 4;

(iv)

Rule 8.6 (management and control) including any necessary approval of a candidate under Part 4; and

(v)

Rules 15 (Formation, registered office and practising address), 16 (Composition of an authorised body) and 12 (Persons who must be "qualified to supervise") of the SRA Practice Framework Rules.

6.3

Notwithstanding that the conditions in 6.2 are met, the SRA may refuse an application for authorisation if:

(a)

it is not satisfied that the applicant body's managers and interest holders are suitable, as a group, to operate or control a business providing regulated legal services;

(b)

it is not satisfied that the applicant body's management or governance arrangements are adequate to safeguard the regulatory objectives;

(c)

it is not satisfied that if the authorisation is granted, the applicant body will comply with the SRA's regulatory arrangements including these rules and any conditions imposed on the authorisation;

(d)

the applicant body has provided inaccurate or misleading information in its application or in response to any requests by the SRA for information;

(e)

the applicant body has failed to notify the SRA of any changes in the information provided in the application in accordance with Rule 3; or

(f)

for any other reason, the SRA considers that it would be against the public interest or otherwise inconsistent with the regulatory objectives to grant authorisation.

6.4

In reaching a decision under this rule, the SRA will take into account all the circumstances which the SRA considers to be relevant including, for the avoidance of doubt,

(a)

any relevant information regarding:

(i)

a manager, employee or interest holder of the applicant body;

(ii)

any persons that such a manager, employee or interest holder is related to, affiliated with, or acts together with where the SRA has reason to believe that such persons may have an influence over the way in which the manager, employee or interest holder will exercise their role; and

(b)

any failure or refusal to disclose, or attempts to conceal relevant information.

Guidance notes

(i)

In considering applications the SRA must comply with the regulatory objectives. Relevant information will therefore be construed widely and the SRA will take account of a broad range of factors. These will include not only issues relevant to the Part 4 approval process, but also factors such as the applicant body's business and governance proposals.

(ii)

Where information is provided in respect of an application, the SRA will consider this to be misleading if, despite the fact that the information is accurate, there is a material omission.

(iii)

View the forms, SRA Suitability Test and the decision making criteria.

Part 3: Conditions of authorisation

Rule 7: Terms and conditions of authorisation

7.1

The authorisation of a body under these rules entitles:

(a)

a recognised body to undertake the activities set out in Rule 8.5 (reserved work and immigration work: recognised bodies) of the SRA Practice Framework Rules; and

(b)

a licensed body to undertake the reserved legal activities and immigration work specified in the licence.

7.2

Every authorisation is granted by the SRA subject to:

(a)

the general conditions in Rule 8; and

(b)

any further conditions imposed by the SRA, at the time of the grant of authorisation or at any time subsequently, in accordance with Rule 9.

Guidance notes

(i)

Where a firm is authorised by the SRA, as well as undertaking the activities set out in Rule 7, the firm will also be able to carry out other non-reserved legal activities. The SRA's jurisdiction over the firm includes the reserved and other legal activities, as defined under section 12 of the LSA, and other activities which are subject to conditions on the body's licence.

(ii)

If a firm carries out a range of legal and non-legal activities (a multi-disciplinary practice or "MDP") the SRA's jurisdiction will not generally extend to cover the "non-legal" activities of the licensed body (unless covered by a specific condition on the licence). Such non-legal activities may be regulated by another regulator, and some activities may not fall within the regulatory ambit of any regulator.

Rule 8: General conditions on authorisation

8.1

Regulatory compliance

(a)

An authorised body and its managers must ensure that:

(i)

any obligations imposed from time to time on the authorised body, its managers, employees or interest holders by or under the SRA's regulatory arrangements are complied with; and

(ii)

any other statutory obligations imposed on the authorised body, its managers, employees or interest holders, in relation to the body's business of carrying on authorised activities, are complied with.

(b)

Without prejudice to the generality of sub-rule (a) above, an authorised body and its managers must agree to be subject to the SRA Disciplinary Procedure Rules 2011 and in particular the power of the SRA to:

(i)

impose a written rebuke and publish details of a written rebuke or a decision to impose a penalty, in accordance with Rule 3 of those rules; and

(ii)

conduct an internal appeal of a decision in accordance with Rule 11 of those rules,

subject to any right of appeal or challenge under those rules or any other enactment in relation to any action taken by the SRA under those rules.

(c)

Nothing in Rule 8 or any other provision in the SRA's regulatory arrangements affects the generality of the condition in Rule 8.1.

8.2

Suitable arrangements for compliance

(a)

An authorised body must at all times have suitable arrangements in place to ensure that:

(i)

the body, its managers and employees, comply with the SRA's regulatory arrangements as they apply to them, as required under section 176 of the LSA and Rule 8.1 above; and

(ii)

the body and its managers and employees, who are authorised persons, maintain the professional principles.

(b)

A licensed body must at all times have suitable arrangements in place to ensure that, as required under section 90 of the LSA, the employees and managers and interest holders of that body who are non-authorised persons do nothing which causes or substantially contributes to a breach by the licensed body or its employees or managers of the SRA's regulatory arrangements.

8.3

Payment of periodical fees

(a)

Every authorised body must pay to the SRA the prescribed periodical fees applicable to that body by the prescribed date.

(b)

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

(c)

The SRA may prescribe from time to time a fee moderation process under which an authorised body may make an application, in accordance with sub-rules (d) to (l) below, for the prescribed periodical fees applicable to that body to be varied. A decision under this process shall be final.

(d)

The turnover of an authorised body for the purpose of determining the prescribed periodical fees applicable to that body is based on a historic turnover figure submitted to the SRA. Where in the 12 months following the submission of that figure an authorised body merges or splits, a notice of succession identifying all authorised bodies, recognised 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.

(e)

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

(f)

An authorised body which has succeeded to the whole or a part of one or more authorised bodies, recognised 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.

(g)

For the purposes of Rule 8.3(f), "succeeded" includes any taking over of the whole or any part of an authorised body, recognised body or recognised sole practitioner, for value or otherwise.

(h)

An authorised body which:

(i)

has split or ceded part of the practice to an authorised body and/or recognised body or recognised sole practitioner; and

(ii)

wishes this change to be considered by the SRA when determining the authorised body's next prescribed periodical fees applicable to that body

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

(i)

A notice of succession delivered under these rules must:

(i)

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

(ii)

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

(j)

An authorised body delivering a notice of succession under these rules must seek the agreement of all affected authorised bodies, recognised bodies or recognised sole practitioners to the contents of the notice of succession.

(k)

Where a notice of succession is delivered to the SRA which has not been agreed by all affected authorised bodies, recognised bodies or recognised sole practitioners, the authorised 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 authorised bodies, recognised bodies or recognised sole practitioners for the purposes of determining the periodic fee or the fee for renewal of recognition.

(l)

Before apportioning the turnover figures under Rule 8.3(k), the SRA will contact any affected authorised body, recognised 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.

8.4

Carrying on of activities

(a)

An authorised body may not carry on an activity unless through a body and individual who is authorised to carry on that activity.

8.5

Compliance officers

(a)

An authorised body must have suitable arrangements in place to ensure that its compliance officers are able to discharge their duties in accordance with these rules.

(b)

An authorised body must at all times have an individual:

(i)

who is a manager or an employee of the authorised body;

(ii)

who is designated as its COLP;

(iii)

who is of sufficient seniority and in a position of sufficient responsibility to fulfil the role; and

(iv)

whose designation is approved by the SRA.

(c)

The COLP of an authorised body must:

(i)

take all reasonable steps to:

(A)

ensure compliance with the terms and conditions of the authorised body's authorisation except any obligations imposed under the SRA Accounts Rules;

(B)

ensure compliance with any statutory obligations of the body, its managers, employees or interest holders in relation to the body's carrying on of authorised activities; and

(C)

record any failure so to comply and make such records available to the SRA on request; and

(ii)

as soon as reasonably practicable, report to the SRA any failure so to comply, provided that:

(A)

in the case of non-material failures, these shall be taken to have been reported as soon as reasonably practicable if they are reported to the SRA together with such other information as the SRA may require in accordance with Rule 8.7(a); and

(B)

a failure may be material either taken on its own or as part of a pattern of failures so to comply.

(d)

An authorised body must at all times have an individual:

(i)

who is a manager or an employee of the authorised body;

(ii)

who is designated as its COFA;

(iii)

who is of sufficient seniority and in a position of sufficient responsibility to fulfil the role; and

(iv)

whose designation is approved by the SRA.

(e)

The COFA of an authorised body must:

(i)

take all reasonable steps to:

(A)

ensure that the body and its employees and managers comply with any obligations imposed upon them under the SRA Accounts Rules;

(B)

record any failure so to comply and make such records available to the SRA on request; and

(ii)

as soon as reasonably practicable, report to the SRA any failure so to comply, provided that:

(A)

in the case of non-material failures, these shall be taken to have been reported as soon as reasonably practicable if they are reported to the SRA together with such other information as the SRA may require in accordance with Rule 8.7(a); and

(B)

a failure may be material either taken on its own or as part of a pattern of failures so to comply.

(f)

The SRA may approve an individual's designation as a COLP or COFA if it is satisfied, in accordance with Part 4, that the individual is a suitable person to carry out his or her duties.

(g)

A designation of an individual as a COLP or COFA has effect only while the individual:

(i)

consents to the designation;

(ii)

in the case of a COLP:

(A)

is not disqualified from acting as a HOLP; and

(B)

is:

(I)

a lawyer of England and Wales;

(II)

an REL; or

(III)

registered with the BSB under Regulation 17 of the European Communities (Lawyer's Practice) Regulations 2000 (SI 2000/1119);

and is an authorised person in relation to one or more of the reserved legal activities which the body is authorised to carry on; and

(iii)

in the case of a COFA, is not disqualified from acting as a HOFA.

8.6

Management and control

(a)

An authorised body must ensure that:

(i)

any manager or owner of the authorised body; or

(ii)

any manager of a body corporate which is a manager or owner of the authorised body;

has been approved by the SRA under Part 4.

(b)

No manager of a licensed body may be a person who is disqualified from being a manager.

(c)

An authorised body (or manager or employee of such a body) must not employ or remunerate a person:

(i)

who is subject to an order under Section 43 of the SA, without the SRA's written permission;

(ii)

whose name has been struck off the roll, who is suspended from practising as a solicitor, or whose practising certificate has been suspended whilst he/she is an undischarged bankrupt, without the SRA's written permission;

(iii)

if there is a direction in force in respect of that person under section 47(2)(g) of the SA (Prohibition on restoration to the roll), without the SRA's written permission; or

(iv)

who is disqualified from being an employee.

(d)

No licensed body (or manager or employee of such a body) may, except in accordance with the SRA's written permission, permit an individual to be a manager or owner of the body if:

(i)

that person's name has been struck off the roll;

(ii)

he/she is suspended from practising as a solicitor;

(iii)

his/her practising certificate has been suspended whilst he/she is an undischarged bankrupt;

(iv)

there is a direction in force in respect of that person under section 47(2)(g) of the SA (Prohibition on restoration to the roll); or

(v)

there is an order in force in respect of that individual under section 43 of the SA (Control of solicitors' employees and consultants).

(e)

No recognised body (or manager or employee of such a body) may, except in accordance with the SRA's written permission, permit an individual to be a manager or interest holder of the body if:

(i)

that person's name has been struck off the roll;

(ii)

he/she is suspended from practising as a solicitor;

(iii)

his/her practising certificate has been suspended whilst he/she is an undischarged bankrupt;

(iv)

there is a direction in force in respect of that person under section 47(2)(g) of the SA (Prohibition on restoration to the roll); or

(v)

there is an order in force in respect of that person under section 43 of the SA (Control of solicitors' employees and consultants).

8.7

Information requirements

(a)

An authorised body must properly complete and provide to the SRA an information report on an annual basis or such other period as specified by the SRA in the prescribed form and by the prescribed date.

(b)

An authorised body must provide any necessary permissions for information to be given to the SRA so as to enable it to:

(i)

use and prepare a report on the documents produced under (a) above; and

(ii)

seek verification from clients, employees, managers or any other body including banks, building societies or other financial institutions.

(c)

An authorised body must notify the SRA as soon as it becomes aware of any changes to relevant information about itself, its employees, managers, or interest holders including any non-compliance with these rules and the conditions on the body's authorisation.

(d)

If an authorised body becomes aware or has information that reasonably suggests that it has or may have provided the SRA with information which was or may have been false, misleading, incomplete or inaccurate, or has or may have changed in a materially significant way, it must notify the SRA immediately.

8.8

Additional conditions for partnerships

(a)

If a partner in a partnership which is an authorised body:

(i)

is committed to prison in civil or criminal proceedings;

(ii)

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

(iii)

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

(iv)

abandons the practice of the body; or

(v)

is made subject to a condition on his or her practising certificate, registration or equivalent authorisation by an approved regulator other than the SRA 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 of the relevant event.

8.9

Additional conditions for recognised bodies

(a)

An interest holder of a recognised body must not create any charge or other third party interest over his or her interest in the recognised body except a member or shareowner of a company may hold a share as nominee for a non-member shareowner who is able to hold an interest in the body in compliance with Rule 8.6.

(b)

If the only, or last remaining:

(i)

solicitor or REL whose role in a recognised body ensures compliance with the lawyer manager requirement under Rule 13.1(a) (relevant lawyer requirement) of the SRA Practice Framework Rules, or

(ii)

lawyer of England and Wales , lawyer of an Establishment Directive profession or RFL whose role in the body ensures compliance with Rule 13.1(b) (management and control requirement) of the SRA Practice Framework Rules,

is subject to any of the following events:

(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 to be a manager of the body;

the body must inform the SRA within seven days of the relevant event and must within 28 days of the relevant event either ensure that the body becomes a legal services body again without reference to that person, or cease to practise.

8.10

Additional conditions for licensed bodies

(a)

If the only, or last remaining, manager of a licensed body who is:

(i)

a solicitor with a current practising certificate;

(ii)

an REL;

(iii)

a lawyer of England and Wales and who is authorised by an approved regulator other than the SRA; or

(iv)

registered with the BSB under regulation 17 of the European Communities (Lawyer's Practice) Regulations 2000 (SI 2000/1119)

is subject to any of the following events:

(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/her practising certificate, registration or equivalent authorisation by an approved regulator other than the SRA which would be breached by continuing to be a manager of the body;

the body must inform the SRA within seven days of the relevant event and must within 28 days of the relevant event either ensure that the body becomes a licensable body again without reference to that person, or cease to practise.

Guidance notes

(i)

Rule 8.1 is to be read in conjunction with the obligations under sections 90 and 176 of the LSA. These require individuals and bodies regulated by the SRA to comply with its regulatory arrangements (reflected in Rule 19.1 of the SRA Practice Framework Rules), and for non-authorised employees, managers and interest holders of licensed bodies not to do anything which causes or substantially contributes to a breach of that requirement. In addition, Rule 8.2 requires the body to have suitable arrangements in place to ensure compliance with these provisions.

(ii)

The SRA's outcomes focused approach to regulation means that the SRA will take into account all of the circumstances relevant to any issue of compliance, whether in relation to the regulatory arrangements or in respect of statutory obligations on firms and those in them. This will include taking into account the evidence that firms and individuals can produce to demonstrate their efforts to ensure compliance (by themselves or others).

(iii)

Rule 8.2 deals with the need for firms to have suitable arrangements for compliance (see also Chapter 7 of the SRA Code of Conduct (Management of your business)). What needs to be covered by a firm's compliance plan will depend on factors such as the size and nature of the firm, its work and its areas of risk. Firms will need to analyse the effectiveness of their compliance arrangements before applying for authorisation and monitor effectiveness on an on-going basis once authorised. Common areas for consideration will include:

(a)

clearly defined governance arrangements providing a transparent framework for responsibilities within the firm;

(b)

appropriate accounting procedures;

(c)

a system for ensuring that only the appropriate people authorise payments from client account;

(d)

a system for ensuring that undertakings are given only when intended, and compliance with them is monitored and enforced;

(e)

appropriate checks on new staff or contractors;

(f)

a system for ensuring that basic regulatory deadlines are not missed e.g. submission of the firm's accountant's report, arranging indemnity cover, renewal of practising certificates and registrations, renewal of all lawyers' licences to practise and provision of regulatory information;

(g)

a system for monitoring, reviewing and managing risks;

(h)

ensuring that issues of conduct are given appropriate weight in decisions the firm takes, whether on client matters or firm-based issues such as funding;

(i)

file reviews;

(j)

appropriate systems for supporting the development and training of staff;

(k)

obtaining the necessary approvals of managers, owners and COLP/COFA;

(l)

arrangements to ensure that any duties to clients and others are fully met even when staff are absent.

(iv)

Rule 8.4 confirms the legal position that for a firm to provide services to clients, the services/activities must be covered by the terms of its authorisation and, where it is a reserved legal activity such as litigation, the firm must have a manager or an employee who is authorised to do that work. For example, a firm cannot provide litigation services, even if its licence permits it to, if its only lawyer is a licensed conveyancer. In situations where a firm loses a lawyer who is responsible for supervising the work of non-lawyers, the firm will need to consider whether the reserved legal work can still be carried out until the situation is remedied.

(v)

Rule 8.5 requires all authorised bodies to have a COLP and a COFA. For COLPs and COFAs of licensed bodies, compliance with their obligations under Rule 8.5 will assist in complying with their duties as Head of Legal Practice and Head of Finance and Administration under sections 91 and 92 respectively of the LSA.

(vi)

The roles of COLP and COFA are a fundamental part of a firm's compliance and governance arrangements. COLPs' and COFAs' ability to take the steps they need to ensure compliance is dependent on the firm having suitable arrangements in place under Rule 8.2. The firm must therefore ensure that any person designated as its COLP or COFA is of sufficient seniority, in a position of sufficient power and responsibility and has clear reporting lines to enable them to have access to all management systems and arrangements and all other relevant information including client files and business information. The existence of compliance officers in a firm and the requirements on them to ensure that the firm, as well as its managers and employees, are complying with the regulatory arrangements (COLP) and the SRA Accounts Rules (COFA) is not a substitute for the firm's and managers' responsibilities and their obligations to comply with Rule 8.1 (Regulatory compliance). Firms and managers need to take care not to obstruct, whether intentionally or unwittingly, a COLP or COFA in fulfilling their role.

(vii)

COLPs and COFAs are responsible for ensuring that the firm has systems and controls in place to enable the firm, as well as its managers and employees and anyone who owns any interest in the firm, to comply with the requirements on them. The firm and its managers are not absolved from any of their own obligations and remain fully responsible for compliance (see Rule 8.1).

(viii)

Those designated as COLP will need to be in a position to be able to discharge the role. They will need to consider whether they are in a position to, for example:

(a)

take all reasonable steps to ensure compliance with the terms of the firm's authorisation; compliance with the SRA's regulatory arrangements by the firm, its employees and managers; and with relevant statutory obligations e.g.

(A)

that non-authorised persons comply with the duty imposed by section 90 of the LSA (duty not to do anything which causes or substantially contributes to a breach of the SRA's regulatory arrangements by an authorised body or its employee or manager);

(B)

that authorised persons and other managers and employees comply with the duty imposed by section 176 of the LSA (duty to comply with the SRA's regulatory arrangements);

(C)

under the LSA, AJA and the SA in respect of practice matters;

(b)

as soon as reasonably practicable, report to the SRA any failure to comply. Where such failure is material, either on its own or because it forms part of a pattern, the immediacy of the report will depend on the circumstances and seriousness of the breach. The report need not be made until the annual information report under Rule 8.7 where such failure is neither material of itself nor because it forms part of a pattern of non-compliance.

(ix)

Those designated as COFA will need to be in a position to be able to discharge the role. They will need to consider whether they are in a position to, for example:

(a)

ensure that they have access to all accounting records;

(b)

carry out regular checks on the accounting systems;

(c)

carry out file and ledger reviews;

(d)

ensure that the reporting accountant has prompt access to all the information needed to complete the accountant's report;

(e)

take steps to ensure that breaches of the SRA Accounts Rules are remedied promptly;

(f)

monitor, review and manage risks to compliance with the SRA Accounts Rules;

(g)

as soon as reasonably practicable report to the SRA any failure to comply with the SRA Accounts Rules. Where such failure is material, either on its own or because it forms part of a pattern, the immediacy of the report will depend on the circumstances and seriousness of the breach. The report need not be made until the annual information report under Rule 8.7 where such failure is neither material of itself nor because it forms part of a pattern of non-compliance.

(x)

In considering whether a failure is "material", the COLP or COFA, as appropriate, will need to take account of various factors, such as:

(a)

the detriment, or risk of detriment, to clients;

(b)

the extent of any risk of loss of confidence in the firm or in the provision of legal services;

(c)

the scale of the issue;

(d)

the overall impact on the firm, its clients and third parties.

In addition, the COLP/COFA will need to keep appropriate records of failures in compliance to:

(e)

monitor overall compliance with obligations;

(f)

assess the effectiveness of the firm's systems;

(g)

be able to decide when the need has arisen to report breaches which are material because they form a pattern.

(xi)

In developing their governance and administrative arrangements firms will need to consider how they approach unexpected risks such as the absence of key staff, including COLP and COFA, and whether the nature of the absence will trigger the need to notify the SRA (see Rule 8.7) and to obtain approval for a replacement.

(xii)

The core statutory obligations of a recognised body are contained in the AJA and the SA and those for licensed bodies are contained in sections 90 and 176 of the LSA. An important aspect of the roles of COLP and COFA is the need to report breaches to the SRA. Although it will commonly be appropriate for the firm to take steps to remedy breaches immediately, this does not obviate the need for compliance officers to record the breach and make a report in compliance with Rule 8.5 where appropriate.

(xiii)

Approval (see Rules 8.5 and 8.6) relates only to the role for which it is granted. Any change from one role that requires approval to another, will require a further approval. Firms need to ensure that they notify the SRA of any changes and, where necessary, apply for appropriate approval, for example where an employee develops into the role of manager, or an owner's participation amounts to being a manager.

(xiv)

The scope of the duty in Rule 8.6(c) is beyond the strict employer-servant relationship (contract of service) and includes a relationship founded on a contract for services or indirect arrangements which are intended to have the effect of frustrating this rule.

(xv)

Rule 8.7 imposes information requirements on authorised bodies. As well as the annual information report, firms must update the SRA by giving details of general changes that occur in respect of the firm. For example, if any of the circumstances referred to in Rule 8.8 occur in relation to any manager or person who has a significant role or responsibility in the firm, the SRA should be notified. Reporting and information requirements that apply to individuals or firms include:

(a)

SRA requirements

(A)

Rules 3, 8.7, 8.8, 8.9 and 8.10 and 18, 23, 24 and 25 of these rules;

(B)

Rule 18 of the SRA Practice Framework Rules;

(C)

Rule 32 of the SRA Accounts Rules;

(D)

Regulations 1.2, 4.3, 4.5, 4.8, 4.12 and 15 of the SRA Practising Regulations;

(E)

Chapter 10 of the Code of Conduct.

(b)

Statutory requirements

(A)

Section 84 of the SA (notification of a solicitor's place of business);

(B)

Paragraph 21 of Schedule 13 to the LSA (non-authorised persons proposing to acquire an interest in a licensed body have continuing notification requirements. Note, it is an offence to fail to comply with the section 21 notification requirements).

(xvi)

The purpose of Rule 8.9(a) is to ensure that control of a recognised body remains solely in the hands of persons who are eligible to be members, and that there is no breach of the management and control condition.

Rule 9: Further conditions

9.1

The SRA may at any time impose one or more further conditions on an authorisation if it considers:

(a)

that:

(i)

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

(ii)

the condition would prevent or 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;

(iii)

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;

(iv)

a relevant insolvency event has occurred in relation to the body but the SRA does not propose at that time to suspend or revoke the authorisation under Rule 22;

(v)

the condition is necessary to facilitate effective monitoring by the SRA of compliance with its regulatory arrangements on the part of the body, its managers, employees or interest holders;

(vi)

the SRA considers that imposing the condition will require the body concerned to take specified steps conducive to the proper, effective or efficient carrying on of a legal activity by that body; or

(vii)

the SRA considers that imposing a condition is necessary in order to ensure compliance with the regulatory objectives;

and

(b)

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

9.2

A condition imposed under Rule 9.1 takes effect from the date on which the condition is imposed unless otherwise specified by the SRA.

Guidance note

(i)

Rule 9.1 permits the SRA to impose conditions "at any time", if certain criteria are met. This includes on the approval of a person under Part 4 of these rules or at the time of modification of the terms of an authorisation under Rule 10.

Rule 10: Modification of terms and conditions of an authorisation

10.1

The SRA may at any time, modify:

(a)

any terms that specify the reserved legal activities that an authorised body is entitled to carry on by virtue of the authorisation:

(i)

on the application of the authorised body; or

(ii)

if the SRA considers it appropriate to do so, without such an application being made; and

having regard to the regulatory objectives;

(b)

any further conditions of an authorisation, imposed under Rule 9:

(i)

on the application of the authorised body; or

(ii)

if the SRA considers it appropriate to do so, without such an application being made; and

having regard to the criteria in Rule 9.

Guidance notes

(i)

The certificate of authorisation of a licensed body will set out the reserved activities that the body is entitled to carry out. A licensed body may apply to change the categories of those activities at any time, or the SRA may do so (see also Rule 10), for example if the body no longer carries out that type of work or if there is an identified risk to the public in the body continuing to provide certain services (see section 86 of the LSA). Firms are also able to apply for a waiver of these rules, including the general conditions in Rule 8 (except Rule 8.1), under Rule 12 (Waivers).

(ii)

Authorised bodies are authorised to carry out non-reserved legal activities as well as the reserved activities for which they are authorised.

(iii)

Multi-disciplinary practices which provide a range of different services, some only of which are regulated by the SRA, will need to ensure that it is clear, both within and outside the firm, through which part of the business (and therefore under which regulatory system) non-legal services are provided. (See Chapter 8 of the SRA Code of Conduct.)

Rule 11: Regulatory conflict

11.1

If a conflict arises between:

(a)

a requirement imposed:

(i)

on an authorised body or on an employee or manager of the body by the SRA as the regulator of that body, and

(ii)

on an individual manager or employee of that body by another approved regulator;

then the requirement imposed by the SRA prevails over the requirement imposed by the other approved regulator;

(b)

a requirement imposed:

(i)

on an authorised non-SRA firm or on an employee or manager of the firm by another approved regulator as the regulator of that firm, and

(ii)

on an individual manager or employee of that firm by the SRA;

then the requirement imposed by the other approved regulator prevails over the requirement imposed by the SRA.

Rule 12: Waivers

12.1

Subject to Rule 12.2 below and to provisions in any enactments or the SRA's regulatory arrangements affecting its ability to waive any requirements, the SRA shall have power to waive in writing the provisions of these rules for a particular purpose or purposes expressed in such waiver, and to attach conditions to or revoke such waiver, at its own discretion.

12.2

The SRA shall not have power to waive any of the provisions of Rule 8.1 with respect to any authorised bodies.

12.3

The SRA shall not have power to grant a waiver under Rule 12 in respect of the reserved legal activities that an authorised body is entitled to carry on or any conditions of authorisation imposed under Rule 9.

Guidance notes

(i)

A waiver cannot be granted where to do so would run counter to the overall purpose of the rule. In addition, many of the requirements set out in various Acts such as the LSA and AJA are mandatory provisions which, in spite of Rule 12, the SRA does not have the power to waive. The following are examples from the LSA:

(a)

Management

(A)

Schedule 11 para 11-14 - the rules must include that a licensed body must at all times have an individual designated as Head of Legal Practice and one designated as Head of Finance and Administration (in these rules referred to as COLP and COFA). This designation must be approved by the SRA, which must be satisfied that the designated individuals are suitable to carry out the duties. Rule 8.5 reflects this and therefore cannot be waived;

(B)

Schedule 11 para 17 - rules must provide that the licensed body must at all times have suitable arrangements in place to ensure that it, its managers and employees comply with the regulatory arrangements, and that any employees carrying out legal activities will maintain the professional principles. Rule 8.1 reflects this and therefore cannot be waived.

(b)

Duration, suspension, modification and revocation of licence

(A)

Schedule 11 para 26(1) - rules must provide criteria for the SRA to use in deciding whether to suspend, revoke or end the suspension of a licence. Rule 22 reflects this and therefore cannot be waived.

(ii)

A waiver of these rules "in writing" includes any form of written electronic communication normally used for business purposes, such as emails.

Part 4: Approval of managers, owners and compliance officers

Rule 13: Application for approval

13.1

This Part governs the SRA's determination of applications for:

(a)

approval of an authorised body's managers and owners pursuant to Rule 8.6(a); and

(b)

approval of an authorised body's compliance officers, pursuant to Rule 8.5(b) and (d).

13.2

The SRA will deem a person to be approved as suitable to be a manager or owner of an authorised body under this Part if:

(a)

that person is:

(i)

a solicitor who holds a current practising certificate; or

(ii)

an authorised body;

(b)

there is no condition on the person's practising certificate or authorisation as appropriate, preventing or restricting them from being a manager, owner or interest holder of an authorised body or being a sole practitioner;

(c)

the SRA is notified on the prescribed form in advance of the person becoming a manager or owner of the authorised body; and

(d)

the SRA has not withdrawn its approval of that person to be a manager or owner under Rule 17.

Rule 14: Approval process

14.1

An application for approval of a manager, owner or compliance officer may be made by an applicant body or an authorised body and must include evidence to satisfy the SRA that the candidate is suitable to be a manager, owner or compliance officer of the body, as appropriate.

14.2

The applicant body or authorised body, as appropriate, must:

(a)

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

(b)

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

(c)

keep all information and documentation under (b) above for a period of not less than 6 years after the person concerned has ceased to be a manager, owner or compliance officer of the body.

14.3

The candidate must declare in the application that the information supplied about them is correct and complete.

14.4

The SRA's decision to approve or refuse approval must be notified in writing to the applicant body or authorised body as appropriate, and separately to the candidate, as soon as possible.

14.5

The SRA may, at the time of granting its approval or at any time subsequently:

(a)

approve the holding of a material interest in a licensed body subject to conditions in accordance with paragraphs 17, 28 or 33 of Schedule 13 to the LSA; and

(b)

make its approval of a person to be an owner, manager or compliance officer of an authorised body subject to such conditions on the body's authorisation as it considers appropriate having regard to the criteria in Rule 9.

14.6

If the SRA proposes to object to a candidate becoming an owner of an applicant body or authorised body, or to approve such a person becoming an owner subject to conditions imposed under Rule 14.5(a) or (b), the SRA must:

(a)

give the candidate and the body a warning notice which:

(i)

specifies the SRA's intention to object or to impose conditions; and

(ii)

states that any representations must be made to the SRA within the period of 28 days from the date of the notice; and

(b)

consider any representations made to the SRA by the body and/or the candidate within the 28 day period in (a)(ii) above.

14.7

The SRA may issue a conditional approval or objection without a warning notice under Rule 14.6 if the application for approval has been made after the grant of authorisation and the SRA considers it necessary or desirable to dispense with the warning notice for the purpose of protecting any of the regulatory objectives.

14.8

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

(a)

a person who has been approved as an owner, manager or compliance officer under this Part;

(b)

an authorised body of which that person is a manager, owner or compliance officer; or

(c)

the body which originally obtained approval for that person and holds information and documentation under Rule 14.2(c);

in order to satisfy the SRA that the person met, meets, or continues to meet the criteria for approval.

Guidance notes

(i)

See also the guidance notes to Rule 1 regarding ownership and material interest.

(ii)

The SRA's notification "in writing" includes any form of written electronic communication normally used for business purposes, such as emails.

(iii)

See also Regulation 7 of the SRA Practising Regulations under which the SRA has the power to impose conditions on a practising certificate or registration which restrict an individual's ability to be involved in an authorised body.

(iv)

Specific provisions exist in the LSA about imposing conditions on the approval of owners of a licensed body:

(a)

For the approval of ownership on an application for a licence, see paragraph 17 of Schedule 13 to the LSA. For the approval of ownership on a change of interests after a licence is issued, see paragraph 28 of that Schedule. These give the SRA the power to approve an owner's or a prospective owner's holding subject to conditions where the Rule 15 criteria are not met in relation to that investment, but only if the SRA considers that, if the conditions are complied with, it will be appropriate for the owner to hold the interest.

(b)

For the imposition of conditions (or further conditions) on an existing ownership interest, see paragraph 33 of Schedule 13 to the LSA. This gives the SRA the power to impose conditions (or further conditions) on a person's holding of an interest, if the SRA is not satisfied that the Rule 15 criteria are met, or if the SRA is satisfied that a condition imposed under paragraphs 17, 28 or 33 of Schedule 13 (see above) on the person's holding of that interest has not been, or is not being, complied with. The SRA may only use the paragraph 33 power if it considers that, if the conditions are complied with, it will be appropriate for the owner to hold the interest without the approval requirements being met.

Rule 15: Criteria for approval

15.1

When considering whether a candidate should be approved to be a manager, owner or compliance officer of the body, as appropriate, the SRA will take into account the criteria set out in the SRA Suitability Test and any other relevant information.

Guidance notes

(i)

As well as evidence about the candidate, the Suitability Test takes into account evidence about the honesty and integrity of a person that the candidate is related to, affiliated with, or acts together with where the SRA has reason to believe that that person may have an influence over the way in which the candidate will exercise their role.

(ii)

Under paragraphs 19 and 20 of Schedule 13 to the LSA the SRA has the power, when dealing with an application for a licence, to object to the holding of an interest if it is not satisfied that the Rule 15 criteria are met in relation to that holding. The mechanism for objecting is set out in those paragraphs.

Rule 16: Effect of approval

16.1

Approval takes effect from the date of the decision unless otherwise stated and remains effective only if the candidate takes up the position for which he or she has been approved within the period specified in the notice of approval.

16.2

Subject to Rule 16.1, approval continues until:

(a)

it is withdrawn by the SRA; or

(b)

the approved person ceases to be a manager, interest holder, COLP or COFA of the authorised body, as appropriate.

Guidance note

(i)

The period specified in the notice of approval in Rule 16.1 will normally be 90 days although may be varied in individual cases.

Rule 17: Withdrawal of approval

17.1

Where the SRA has granted an approval of a person to be a manager, owner or compliance officer of a body (including a deemed approval under Rule 13.2), it may subsequently withdraw that approval if:

(a)

it is not satisfied that an approved person met or meets the criteria for approval in Rule 15;

(b)

it is satisfied that a condition imposed on the body's authorisation under Rule 14.5 has not been, or is not being complied with;

(c)

it is satisfied that the approved person has breached a duty or obligation imposed upon them in or under the SRA's regulatory arrangements or any enactments; or

(d)

information or documentation is not promptly supplied in response to a request made under Rule 14.8.

17.2

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.

Rule 18: Temporary emergency approvals for compliance officers

18.1

If an authorised body ceases to have a COLP or COFA whose designation has been approved by the SRA, the authorised body must immediately and in any event within seven days:

(a)

notify the SRA;

(b)

designate another manager or employee to replace its previous COLP or COFA, as appropriate; and

(c)

make an application to the SRA for temporary approval of the new COLP or COFA, as appropriate.

18.2

The SRA may grant a temporary approval under this rule if:

(a)

it is satisfied that the authorised body could not reasonably have commenced an application for approval of designation in advance of the non-compliance; and

(b)

on the face of the application and any other information immediately before the SRA, there is no evidence suggesting that the new compliance officer is not suitable to carry out the duties imposed on them under these rules.

18.3

Temporary approval under this rule:

(a)

may be granted initially for 28 days;

(b)

may be granted to have effect from the date the body ceases to have a COLP or COFA whose designation has been approved;

(c)

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

(d)

must be extended pending determination of a substantive application for approval commenced in accordance with Rule 18.4;

(e)

may be granted or extended subject to such conditions on the authorised body's authorisation as the SRA thinks fit, having regard to the criteria in Rule 9;

(f)

has effect only while the criteria in Rule 8.5(g) are met;

(g)

if granted, cannot prejudice the discretion of the SRA to refuse a substantive application for approval of designation or to impose any conditions on that approval; and

(h)

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

18.4

If granted temporary approval under Rule 18.3 above for its designation of a new COLP or COFA, the authorised body must:

(a)

designate a permanent COLP or COFA, as appropriate; and

(b)

submit a substantive application for approval of that designation under Rule 13;

before the expiry of the temporary approval or any extension of that approval by the SRA.

Part 5: Notification, effect and duration of authorisation

Rule 19: Notification of decisions

19.1

The SRA must notify its decision and reasons in writing when it:

(a)

refuses an application made under these rules;

(b)

grants an application subject to a condition;

(c)

refuses a permission required under a condition on a body's authorisation; or

(d)

withdraws its approval of a candidate under Rules 17 and 18.

19.2

The notification in Rule 19.1 must be given:

(a)

to the applicant body or authorised body as appropriate; and

(b)

where appropriate, to the candidate concerned.

19.3

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

(a)

to the authorised body concerned, when the SRA decides to impose a condition on an authorised body's authorisation at any time after the grant of the authorisation;

(b)

to the body and the individual concerned, when the SRA decides to withdraw an approval under Rules 17 and 18;

19.4

The SRA may shorten or dispense with the 28 day period under Rule 19.3(a) if it is satisfied that it is in the public interest to do so.

Guidance note

(i)

The SRA's notification "in writing" may be by any form of written electronic communication normally used for business purposes, such as emails.

Rule 20: Notifying third parties of decisions

20.1

The SRA may, if it considers it in the public interest to do so, publish and notify any persons of a decision concerning a body or an individual made under these rules, including but not limited to:

(a)

an authorised person of which the body or individual concerned is a current, past or prospective manager, employee or interest holder;

(b)

any approved regulator;

(c)

any statutory regulator;

(d)

the Legal Services Board;

(e)

the Legal Ombudsman;

(f)

the regulatory body for any profession of which the individual concerned is a member or which regulates the body concerned;

(g)

any law enforcement agency.

Rule 21: Effect and validity of authorisation

21.1

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

21.2

Authorisation continues in force unless it ceases to have effect in accordance with Rule 21.3.

21.3

An authorised body's authorisation ceases to have effect so that the body is no longer authorised by the SRA under these rules:

(a)

from the time that the authorisation is revoked under Rule 22;

(b)

at any time during which the authorisation is suspended;

(c)

subject to Part 6, if the body is wound up or for any other reason ceases to exist; or

(d)

if in relation to a licensed body, the body is issued with a licence by another approved regulator.

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)

the SRA is satisfied that the body has no intention of carrying on the legal activities for which it has been authorised under these rules;

(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;

(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 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); or

(xiii)

for any other reason it is in the public interest;

(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.

Rule 23: Unforeseen temporary breach of certain conditions and eligibility criteria

23.1

Unforeseen breach of eligibility criteria

(a)

If due to an event which could not reasonably have been foreseen, a licensed body is no longer a licensable body:

(i)

because the body no longer has at least one manager who is an individual and who is an authorised person (other than an RFL or an EEL who is not registered with the BSB under Regulation 17 of the European Communities (Lawyer's Practice) Regulations 2000 (SI 2000/1119)) in relation to a licensed activity; or

(ii)

because:

(A)

the body no longer has a manager or interest holder who is a non-authorised person; and

(B)

non-authorised persons are no longer entitled to exercise, or control the exercise of, at least 10% of the voting rights in any body which is a manager or interest holder of the licensed body;

but the SRA is informed of that fact within seven days of the event first occurring and the body becomes a licensable body again within 28 days of the event first occurring, then the licensable body will be deemed to have remained a licensable body and to that extent will not be liable to have its authorisation revoked or suspended under Rule 22.

(b)

If due to an event which could not reasonably have been foreseen, a recognised body is no longer a legal services body because the body no longer has at least one manager who is:

(i)

a solicitor;

(ii)

an REL; or

(iii)

a legally qualified body with at least one manager who is a solicitor or an REL;

but the SRA is informed of the fact within seven days of the event first occurring and the body becomes a legal services body again within 28 days of the event first occurring, then the recognised body will be deemed to have remained a legal services body and to that extent will not be liable to have its authorisation revoked or suspended under Rule 22.

23.2

An LLP having fewer than two members

(a)

If an event which could not reasonably have been foreseen results in an LLP having fewer than two members, and therefore being in breach of Rule 16.3 (requirement to have at least two members) of the SRA Practice Framework Rules, but within six months the situation is remedied, and provided the LLP has remained in a position to comply with the remainder of the SRA's regulatory arrangements including these rules and any conditions imposed on its authorisation, the LLP will be deemed to have remained in compliance with Rule 16.3 of the SRA Practice Framework Rules and to that extent will not be liable to have its authorisation revoked under Rule 22.

23.3

Death of member or shareowner of a company

(a)

If an authorised body is a company with shares and a member or shareowner dies who had been approved under Part 4 to be a member or shareowner of the body at the date of death, then, whether or not the personal representatives have been approved under Part 4, the personal representatives may replace the deceased member or shareowner in their capacity as personal representatives, provided that:

(i)

no vote may be exercised by or on behalf of a personal representative (and no such vote may be accepted) unless all the personal representatives have been approved under Part 4 to be members or shareowners;

(ii)

no personal representative may hold or own a share in that capacity for longer than 12 months from the date of death;

(iii)

within 12 months of the death the authorised body must cancel or acquire the shares or ensure that they are held and owned by persons who can hold the interest in the body in compliance with Rule 8.6 (management and control), but without this resulting in RFLs being the only shareowners of a recognised body; and

(iv)

no vote may be exercised by or on behalf of any personal representative (and no such vote may be accepted) after the 12 month period has expired.

(b)

If, following the death of a member or shareowner, a company meets the requirements of (a) above, the company will be deemed to have remained in compliance with Rule 8.6 (management and control), and to that extent will not be liable to have its authorisation revoked under Rule 22.

23.4

Member or shareowner ceasing to be approved

(a)

If an authorised body is a company with shares and a member or shareowner ceases to be approved under Part 4 to be a member or shareowner of the body, or ceases to exist as a body corporate, then provided that:

(i)

no vote is exercised or accepted on the shares held by or on behalf of that member or shareowner;

(ii)

a trustee in bankruptcy or liquidator (whether approved under Part 4 or not) replaces that member or shareowner in the capacity of trustee or liquidator for a period not exceeding six months from the date the member or shareowner ceased to be approved; and

(iii)

the company cancels or acquires the shares within six months, or within that time ensures that the shares are held and owned by persons in compliance with Rule 8.6, but without this resulting in the body ceasing to be a licensable body (in the case of a licensed body), or ceasing to be a legal services body (in the case of a recognised body);

the company will be deemed to have remained in compliance with Rule 8.6 (management and control), and to that extent will not be liable to have its authorisation revoked under Rule 22.

23.5

Member or shareowner becoming insolvent but remaining compliant

(a)

If an authorised body is a company with shares and a member or shareowner becomes insolvent but continues to hold an interest in the body in compliance with Rule 8.6, then the trustee in bankruptcy or liquidator (whether approved under Part 4 or not) may replace the insolvent member or shareowner in the capacity of trustee in bankruptcy or liquidator, provided that:

(i)

no vote may be exercised by or on behalf of a trustee in bankruptcy or liquidator (and no such vote may be accepted) unless the trustee or liquidator can hold the interest in the company in compliance with Rule 8.6;

(ii)

no trustee in bankruptcy or liquidator may hold or own a share in that capacity for longer than six months from the date of the insolvency;

(iii)

within six months of the insolvency the company must cancel or acquire the shares or ensure that they are held and owned by persons who can hold an interest in the company in compliance with Rule 8.6, but without this resulting in the body ceasing to be a licensable body (in the case of a licensed body), or ceasing to be a legal services body (in the case of a recognised body); and

(iv)

no vote may be exercised by or on behalf of any trustee in bankruptcy or liquidator (and no such vote may be accepted) after the six month period has expired.

(b)

If (a) above applies and a company meets its requirements, the company will be deemed to have remained in compliance with Rule 8.6 (management and control), and to that extent will not be liable to have its authorisation revoked under Rule 22.

23.6

Court of Protection deputy

(a)

A Court of Protection deputy appointed under section 19 of the Mental Capacity Act 2005 may be a member or shareowner in that capacity of an authorised body, without breaching Rule 8.6 (management and control), provided that:

(i)

the person in respect of whom the deputy has been appointed holds the interest in compliance with Rule 8.6; and

(ii)

if the deputy is not a member or shareowner in compliance with Rule 8.6, no vote is exercised or accepted on the shares.

(b)

If (a) above applies and a company meets its requirements, the company will be deemed to have remained in compliance with Rule 8.6, and to that extent will not be liable to have its authorisation revoked under Rule 22.

Guidance notes

(i)

The provisions in Rule 23 allow firms time to rectify the position where unexpected changes occur. The effect of the provisions is to allow firms a period to avoid being in breach of SRA rules. Recognised bodies need also to consider the time limit of 90 days to obtain a licence which is imposed by section 18(3) of the LSA on such existing bodies that become licensable. Likewise, licensed bodies need to consider the time limit of 90 days to obtain a certificate of recognition which is imposed by section 18(6) of the LSA on existing licensed bodies that cease to be licensable.

(ii)

If the changes in 23.2, 23.3, 23.4, 23.5 and 23.6 occur, firms will need to notify the SRA under Rule 8.7 and under Rule 18.2 of the SRA Practice Framework Rules.

Part 6: Changes in partnerships

Rule 24: Change to the composition of a partnership

24.1

Authorisation of a partnership may continue despite a change in its composition, subject to Rules 24.2, 24.3, 24.4 and 25.

24.2

If there is a change to an authorised body, which is a partnership, which results in there being:

(a)

no remaining partner who was a partner before the change the authorised body must cease to practise from the date of the change; the 28 day period under Rule 23.1 does not apply;

(b)

only one remaining principal who needs to be authorised as a sole practitioner but could not reasonably have commenced an application in advance of the change:

(i)

the firm may continue to practise provided that the remaining principal:

(A)

is a solicitor or REL;

(B)

notifies the SRA within seven days;

(C)

is granted temporary emergency recognition under Regulation 4 of the SRA Practising Regulations;

(ii)

during the initial 28 day period, or such extended period as the SRA may allow, under any such temporary emergency recognition, the remaining principal must:

(A)

cease to practise, and notify the SRA; or

(B)

commence a substantive application for authorisation as a recognised sole practitioner under the SRA Practising Regulations, or if the remaining principal has taken on a new partner, as an authorised body;

(c)

an authorised body which will continue but one or more of the former partners intend to carry on as a separate firm, which must be authorised as an authorised body, a recognised body or a recognised sole practitioner, but the principal(s) in the new firm could not reasonably have commenced an application for authorisation in advance of the change:

(i)

the new firm may practise from the date of the change provided that the new firm:

(A)

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

(B)

complies with the SRA Indemnity Insurance Rules;

(C)

notifies the SRA within seven days; and

(D)

is granted temporary emergency authorisation under Rule 25 below or temporary emergency recognition under Regulation 7 of the SRA Recognised Bodies Regulations 2011 or Regulation 4 of the SRA Practising Regulations;

(ii)

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 authorisation;

(d)

a failure by:

(i)

a recognised body to comply with Rules 13.1 and 16.1 of the SRA Practice Framework Rules; or

(ii)

a licensed body to comply with Rules 14 and 16 of the SRA Practice Framework Rules,

the firm must cease to practise.

24.3

Following a partnership change under Rule 24.2(c), the SRA will if necessary decide which of the groups of former partners will continue to be covered by the existing authorisation and which must apply for a new authorisation, and may apportion authorisation fees and Compensation Fund contributions between the groups.

24.4

Any decision made under Rule 24.3 will be without prejudice to the outcome of any legal dispute between the former partners.

Rule 25: Temporary emergency authorisation

25.1

If a partnership split brings into being a new partnership which is not an authorised body:

(a)

the SRA must be notified within seven days; and

(b)

temporary emergency authorisation may be granted, subject to Rule 25.2 to 25.4 below, so as to enable the partners in the new partnership to practise through the new firm for a limited period without breach of these rules and the SRA Practice Framework Rules.

25.2

An application for temporary emergency authorisation must be made on the prescribed form within seven days of the partnership split, and must be accompanied by all information and documentation the SRA may reasonably require.

25.3

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

(a)

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

(b)

In the case of a licensable body, the partnership must comply with Rule 14 (Eligibility criteria and fundamental requirements for licensed bodies) of the SRA Practice Framework Rules.

(c)

In the case of a legal services body, the partnership must comply with Rule 13 (Eligibility criteria and fundamental requirements for recognised bodies) of the SRA Practice Framework Rules.

(d)

The partnership must comply with Rules 12 (Persons who must be "qualified to supervise"), 15 (Formation, registered office and practising address) and 16 (Composition of an authorised body) of the SRA Practice Framework Rules.

(e)

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

25.4

Temporary emergency authorisation:

(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 body;

(d)

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

(e)

is granted or extended subject to the general conditions in Rule 8, unless otherwise specified by the SRA, and may be granted or extended subject to such other conditions as the SRA sees fit to impose having regard to the criteria in Rule 9;

(f)

is to be treated as a new authorisation for the purpose of these rules;

(g)

if granted, cannot prejudice the discretion of the SRA to refuse a substantive application for authorisation of the body under Part 2 or to impose any conditions on any such authorisation; and

(h)

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

Part 7: Special bodies, transitional provisions and passporting

Rule 26: Special kinds of licensable bodies

26.1

The SRA does not accept applications for any order to be made by it under section 106 of the LSA from any licensable body.

Guidance note

(i)

The LSA provides the special kind of licensable bodies mentioned in section 23 with a grace period during which they are not required to apply for authorisation as a licensed body. However, during the grace period (which is expected to end in March 2013), such bodies may apply for authorisation under these rules but will not be able to request special treatment under section 106.

Rule 27: Commencement, transitional provisions and repeals

27.1

These rules shall come into force:

(a)

on the designation of the Society as a licensing authority under Part 1 of Schedule 10 to the LSA, in respect of licensable bodies;

(b)

on 31 March 2012 ("the relevant date"), in respect of legal services bodies, and the SRA Recognised Bodies Regulations 2011 (in Rule 27.1 referred to as "the Regulations") shall be repealed, save that:

(i)

applications for initial recognition made under Regulation 2.1 of the Regulations but not decided on the relevant date shall be considered and decided in accordance with the Regulations;

(ii)

applications for approval of an individual as suitable to be a manager made under Regulation 5 of the Regulations but not decided on the relevant date shall be considered and decided in accordance with the Regulations;

(iii)

applications for temporary emergency recognition made under Regulation 7.5 of the Regulations, or requests for extension of temporary emergency recognition made under Regulation 7.8(c) of the Regulations, but not decided on the relevant date shall be considered and decided in accordance with the Regulations;

(iv)

where a person has invoked the internal appeal procedure under Regulation 9 of the Regulations, but the appeal has not been concluded by the relevant date, then the appeal shall be considered and determined in accordance with the Regulations; and

(v)

where directions have been issued in respect of a reconsideration under Regulation 18 of the Regulations, the reconsideration shall proceed in accordance with the Regulations,

and for the avoidance of doubt, on the relevant date:

(A)

where a notice of succession has been delivered to the SRA under Regulation 3.1 or 3.3 of the Regulations in respect of which the SRA has made no fee determination, the SRA will proceed to consider the matter in accordance with Rule 8.3(d) to (k) above;

(B)

where condition(s) have been imposed on a recognised body's recognition under Regulation 6 of the Regulations, such condition(s) shall continue to apply as if they had been imposed under Rule 9 above; and

(c)

From 31 March 2012 or the date on which an order made pursuant to section 69 of the LSA relating to the status of sole practitioners comes into force, whichever is the later, ("the relevant date" for the purposes of sub-rules (c) and (d)) the SRA Practising Regulations (in Rule 27.1 referred to as "the Practising Regulations") shall have effect with the following amendments:

(i)

Regulations 1.6, 4, 5, 8.2(b), 8.3(c), 8.3(d), 8.4(d), 8.4(j), 8.4(l), 9.1(d), 9.2(d), 10.1(d), 10.2(b), 11.2(g), 12.2(h), 14.1(d) and 19.5 shall be repealed;

(ii)

in Regulation 8.3 the words " who is the subject of any decision in (a)-(d) below and/or the person who is the subject of a decision in (c) or (d) below" shall be omitted;

(iii)

in Regulation 8.4(e), "13ZA(6)," shall be omitted;

(iv)

in Regulation 8.5(a)(ii) the words "including, where applicable, the renewal of an existing authorisation as a recognised sole practitioner endorsed on the practising certificate or registration," shall be omitted;

(v)

in Regulation 10.2(c) the word "or" shall be substituted for the "," between "practising certificate" and "registration" and the words ", or authorisation as a recognised sole practitioner" shall be omitted;

(vi)

in Regulation 10.3(a) the word "or" shall be substituted for the "," between "practising certificate" and "registration" and for the "," between "practising certificate" and "renew a registration", and the words ", or authorisation as a recognised sole practitioner" and the words "or renew an authorisation" shall be omitted;

(vii)

in Regulation 11.2(k) the words "or suspension of the solicitor from practice as a sole practitioner, or suspension of the solicitor's authorisation as a recognised sole practitioner," shall be omitted;

(viii)

in Regulation 12.2(k) the words "or suspension of the lawyer from practice as a sole practitioner, or suspension of the lawyer's authorisation as a recognised sole practitioner," shall be omitted;

(ix)

in Regulation 13.2(h) and 16.1(b) the words "recognised sole practitioner," shall be omitted;

(d)

Notwithstanding the provisions of sub-rule (c) above:

(i)

applications for authorisation as a recognised sole practitioner made under Regulation 4.1 of the Practising Regulations but not decided on the relevant date shall be considered and decided in accordance with the Practising Regulations;

(ii)

applications for temporary emergency recognition made under Regulation 4.4(a) or for recognition made under Regulation 4.5(b) of the Practising Regulations, or requests for extension of temporary emergency recognition made under Regulation 4.4(c)(iii) of the Practising Regulations, but not decided on the relevant date shall be considered and decided in accordance with the Practising Regulations;

(iii)

applications for approval of a person's designation as a COLP or COFA made under Regulation 4.9 of the Practising Regulations but not decided on the relevant date shall be considered and decided in accordance with the Practising Regulations;

and, for the avoidance of doubt, where on the relevant date, a notice of succession has been delivered to the SRA under Regulation 5.1 or 5.3 of the Practising Regulations in respect of which the SRA has made no fee determination, the SRA will proceed to consider the matter in accordance with Rule 8.3(d) to (l) above.

27.2

From 31 March 2012 these rules shall have effect subject to the following amendments:

(a)

in Rule 8.3(d), 8.3(i)(i) and 8.3(i)(ii) the words ", recognised bodies" shall be omitted;

(b)

in Rule 8.3(f), 8.3(j) and 8.3(k) the words ", recognised bodies" shall be omitted;

(c)

in Rule 8.3(g) and 8.3(l), the words ", recognised body" shall be omitted;

(d)

in Rule 8.3(h)(i), the words "recognised body or" shall be omitted;

(e)

in Rule 24.2(c), the words ", a recognised body" shall be omitted; and

(f)

in Rule 24.2(c)(i)(D), the words "Regulation 7 of the SRA Recognised Bodies Regulations 2011 or" shall be omitted.

27.3

From 31 March 2012 or the date on which an order made pursuant to section 69 of the Legal Services Act relating to the status of sole practitioners comes into force, whichever is the later, these rules shall have effect subject to the following amendments:

(a)

in Rule 6.3(a) the words ", as a group, are, or the sole practitioner is, suitable" shall be substituted for the words "are suitable, as a group";

(b)

in Rule 8.3(d), 8.3(i)(i) and 8.3(i)(ii) the words "and recognised sole practitioners" shall be omitted;

(c)

in Rule 8.3(f), 8.3(j) and 8.3(k) the words "or recognised sole practitioners" shall be omitted;

(d)

in Rule 8.3(g) and 8.3(l), the words "or recognised sole practitioner" shall be omitted;

(e)

in Rule 8.3(h)(i), the words "and/or recognised sole practitioner" shall be omitted;

(f)

Rule 24.2(b) shall be omitted;

(g)

in Rule 24.2(c), the words "or a recognised sole practitioner" shall be omitted;

(h)

in Rule 24.2(c)(i)(D), the words "or temporary emergency recognition under Regulation 4 of the SRA Practising Regulations" shall be omitted;

(i)

Rule 25.1 shall have effect as if the words "or a new sole practitioner firm" were inserted after the word "partnership";

(j)

Rule 25.1(b) shall have effect as if the words ", or the new sole principal," were inserted after the words "the new partnership";

(k)

Rule 25.3(a) shall have effect as if the words "or sole principal" were inserted after the word "partners";

(l)

Rule 25.3(c), 25.3(d) and 25.3(e) shall have effect as if the words "or sole principal" were inserted after the word "partnership"; and

(m)

Rule 25 shall have effect as if the following provisions were inserted:

25.5 Sole practitioners

(a) If a sole practitioner dies:

(i) the SRA must be notified within seven days;

(ii) within 28 days of the death an emergency application may be made, on the prescribed form, for recognition as a recognised body in the capacity of personal representative, practice manager or employee by a solicitor or an REL who is:

(A) the sole practitioner's executor;

(B) practice manager appointed by the sole practitioner's personal representatives; or

(C) an employee of the firm.

(b)If the application for recognition in the capacity of personal representative, practice manager or employee is granted:

(i) recognition will be deemed to run from the date of death;

(ii) recognition will ceases to have effect on the winding up of the estate or 12 months from the date of death, whichever is the earlier.

27.4

From 31 March 2012, a legal services body which does not comply with Rule 8.5 above may be treated as an authorised body for the purposes of these rules and the SRA's regulatory arrangements, until 31 December 2012, at which time a legal services body shall be required to comply with Rule 8.5 in order to be authorised under these rules.

27.5

Unless the context otherwise requires, references in these rules to:

(a)

these rules, or a provision of these rules; and

(b)

the SRA Code of Conduct, rules, regulations or regulatory arrangements, or a provision of the same,

include a reference to the equivalent rules, regulations or provisions previously in force.

Rule 28: Transition of recognised bodies and sole practitioners

28.1

From 31 March 2012:

(a)

the recognition of a body recognised under section 9 of the AJA, shall have effect as if it were authorisation granted under these rules; and

(b)

all managers and owners of bodies falling within sub-rule (a) shall be deemed to have been approved under Part 4 of these rules, as applicable, including those approved under Rule 27.1(b)(ii) above.

28.2

From 31 March 2012 or the date on which an order made pursuant to section 69 of the Legal Services Act relating to the status of sole practitioners comes into force, whichever is the later, these rules shall have effect subject to the following amendments:

(a)

a sole solicitor or REL who has been recognised as a sole practitioner by way of an endorsement under section 1B of the SA shall be deemed to have been recognised as a legal services body under section 9 of the AJA;

(b)

all sole solicitors and RELs falling within sub-rule (a) shall be deemed to have been approved as managers and owners under Part 4 of these rules; and

(c)

all COLPs and COFAs approved as such under the SRA Practising Regulations shall be deemed to have been approved as such under Part 4 of these rules, as applicable.

Part 8: Reconsideration and appeals

Rule 29: Reconsideration

29.1

The SRA may reconsider a decision made under these rules when it appears that the decision maker:

(a)

was not provided with material evidence that was available to the SRA;

(b)

was materially misled;

(c)

failed to take proper account of material facts or evidence;

(d)

took into account immaterial facts or evidence;

(e)

made a material error of law;

(f)

made a decision which was otherwise irrational or procedurally unfair;

(g)

made a decision which was otherwise ultra vires; or

(h)

failed to give sufficient reasons.

29.2

A decision may be reconsidered under Rule 29.1 only on the initiative of the SRA.

29.3

The SRA, when considering the exercise of its powers under this rule, may also give directions for:

(a)

further investigations to be undertaken;

(b)

further information or explanation to be obtained from any person; and

(c)

the reconsideration to be undertaken by the original decision maker or by a different decision maker or panel.

Rule 30: Appeals by legal services bodies

30.1

A legal services body which is the subject of any decision in (a)-(b) below may invoke the SRA's own appeals procedure:

(a)

against the SRA's decision to modify or refuse an application for modification of the terms and conditions of an authorisation under Rule 10;

(b)

before exercising its right of appeal to the High Court:

(i)

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

(ii)

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

(iii)

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

30.2

A legal services body which is the subject of any decision in (a)-(c) below and/or the person who is the subject of any decision in (a)-(c) below, may invoke the SRA's own appeals procedure against the SRA's decision:

(a)

not to approve the person to be a manager, owner or compliance officer of a legal services body under Rules 8.5(b) or (d) or 8.6(a);

(b)

to approve the person to be a manager, owner or compliance officer of a legal services body under Rules 8.5(b) or (d) or 8.6(a) subject to conditions on the body's authorisation; or

(c)

to withdraw its approval of the person to be a manager, owner or compliance officer of the body under Rule 17 or Rule 18.

30.3

A legal services body may appeal to the High Court against the SRA's decision to suspend or revoke the body's authorisation, but must first invoke the SRA's own appeals procedure.

30.4

A legal services body, treated as such in accordance with Rule 22.3 of the SRA Practice Framework Rules, which is the subject of any decision in (a)-(b) below and/or the person who is the subject of any decision in (a)-(b) below, may appeal to the High Court against the SRA's decision:

(a)

not to approve the individual as suitable to be a non-lawyer manager of the body under Rule 8.6(a); and

(b)

to withdraw its approval of the individual as suitable to be a non-lawyer manager of the body under Rule 17;

but must first invoke the SRA's own appeals procedure, and for the purposes of 30.4 and 30.6(c) "non-lawyer" means an individual who is not listed in Rule 22.4(d)(i) of the SRA Practice Framework Rules.

30.5

Deemed refusal

(a)

An application by a legal services body for authorisation under Rule 4 is deemed, for the purpose of any appeal under Rule 30.1(b) above, to be refused on the day of the expiry of the decision period, if by the end of that day the SRA has not notified the applicant body of its decision.

(b)

An application for approval of a person under Part 4 is deemed, for the purpose of any appeal under Rule 30.4(a) above, to be refused on the day of the expiry of the decision period, if by the end of that day the SRA has not notified the applicant body or authorised body as appropriate, and the person who is the subject of the approval, of its decision.

30.6

If an appeal is made to the High Court in relation to a decision made in respect of a legal services body to:

(a)

impose conditions on an authorisation under Rule 9;

(b)

modify terms and conditions of an authorisation under Rule 10;

(c)

withdraw approval of a non-lawyer manager under 30.4; or

(d)

revoke or suspend a body's authorisation;

the appellant may apply to the High Court for a stay of the decision pending the determination or discontinuance of the appeal, and if the High Court imposes an order for a stay in relation to a decision, the SRA shall stay the decision accordingly.

Guidance note

(i)

Rule 30.5 allows an applicant body or authorised body to regard their application as refused on certain dates to allow an appeal to be commenced. However, this is only for the purpose of ensuring the body has appeal rights and despite the deemed refusal the SRA may still determine the application.

Rule 31: Appeals by licensable bodies

31.1

A licensable body which is the subject of any decision in (a)-(b) below may appeal to the appellate body against:

(a)

the SRA's decision to:

(i)

refuse an application for authorisation;

(ii)

impose a condition on an authorisation;

(iii)

revoke or suspend a body's authorisation;

(iv)

refuse to approve a step which, under a condition on the body's authorisation, requires such prior approval;

(v)

modify or refuse an application for modification of the terms and conditions of an authorisation under Rule 10; or

(b)

the SRA's failure to make a decision within the decision period;

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

31.2

A licensable body which makes the application for approval pursuant to Rule 8.5 or 8.6 and/or the person who is the subject of the application for approval may appeal to the appellate body against the SRA's decision:

(a)

not to approve the person to be a manager or compliance officer of the body under Rules 8.5(b) or (d) or 8.6(a);

(b)

to approve the person to be a manager or compliance officer of the body under Rules 8.5(b) or (d) or 8.6(a) subject to conditions on the body's authorisation; or

(c)

to withdraw its approval of the person to be a manager or compliance officer of the body under Rule 17 or 18;

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

31.3

Any person who is the subject of any decision in (a)-(c) below may invoke the SRA's own appeals procedure, before exercising their right of appeal to the appellate body:

(a)

against the SRA's imposition of a financial penalty, under section 96 of the LSA;

(b)

against the SRA's imposition of conditions on an authorisation in connection with its approval of a person being an owner of a licensed body, under paragraphs 18, 29 or 34 of Schedule 13 to the LSA; or

(c)

against the SRA's decision not to approve, or its decision to withdraw its approval of, a person being an owner of a licensed body, under paragraphs 20, 32 or 37 of Schedule 13 to the LSA.

31.4

If an appeal is made to the appellate body in relation to a decision in respect of a licensable body to:

(a)

impose conditions on an authorisation under Rule 9;

(b)

modify terms and conditions of an authorisation under Rule 10;

(c)

withdraw approval of an owner, manager, COLP or COFA;

(d)

revoke or suspend a body's authorisation; or

(e)

impose conditions on the holding of an interest under paragraph 28 or 33 of Schedule 13 of the LSA;

the appellant may apply to the appellate body for a stay of the decision pending the determination or discontinuance of the appeal, and if the appellate body imposes an order for a stay in relation to a decision, the SRA shall stay the decision accordingly.

Rule 32: Appeals - general provisions

32.1

Appeals under the SRA's own appeals procedure in respect of a decision made under these rules must be made within 28 days of:

(a)

notification of the SRA's decision and reasons;

(b)

deemed refusal under Rule 30.5 above; or

(c)

expiry of the decision period or extension notice under Rule 5;

as applicable.

32.2

Unless otherwise provided in rules of the High Court or the Legal Services Board or in the relevant decision, an appeal to the High Court or appellate body in respect of a decision made under these rules must be made:

(a)

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;

(b)

within the 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; or

(c)

within the period of 28 days from the date on which the notice of the decision to impose a condition under the SRA's own appeals procedure is given;

as appropriate.

32.3

An appeal under the SRA's own appeals procedure under Rules 30.2(a), 30.4(a) or 31.2(a), or against the SRA's decision to refuse an approval under Rule 31.3(c), shall be treated as an application for the purpose of these rules.

32.4

If an appeal is made under:

(a)

Rules 30.2(c), 30.4(b), 31.2(c) or 31.3(c), against the SRA's decision to withdraw an approval; or

(b)

Rules 30.3 or 31.1(a)(iii), against the SRA's decision to revoke or suspend an authorisation under Rule 22;

before the decision takes effect, the decision shall not take effect pending the 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.

32.5

Any decision referred to in Rule 30.6 and 31.4 which is made by the SRA may include a direction that the condition, modification, withdrawal, revocation or suspension shall not take effect until the determination or discontinuance of any appeal.

Part 9: Register and certificate of authorisation

Rule 33: Name of an authorised body

33.1

A body corporate will be authorised under its corporate name.

33.2

A partnership must elect to have a name under which it is to be authorised.

Rule 34: The register of authorised bodies

34.1

The SRA must keep a register of all authorised bodies authorised by the SRA, which may be kept in electronic form.

34.2

The register must contain, for each authorised body:

(a)

the name and number under which the body is authorised;

(b)

whether the authorised body is a recognised body or a licensed body;

(c)

any other practising styles used by the body;

(d)

the authorised body's registered office and registered number, if it is an LLP or company;

(e)

the authorised body's main practising address in England and Wales;

(f)

all the authorised body's other practising addresses;

(g)

whether the authorised body is a partnership, an LLP or a company;

(h)

if the authorised body is a company, whether it is:

(i)

a company limited by shares;

(ii)

a company limited by guarantee;

(iii)

an unlimited company;

(iv)

an overseas company registered in England and Wales;

(v)

an overseas company registered in Scotland;

(vi)

an overseas company registered in Northern Ireland; or

(vii)

a societas Europaea;

(i)

a list of the authorised body's managers, and in respect of each manager, whether that manager is:

(i)

a lawyer of England and Wales, and if so the nature of his or her qualification;

(ii)

an REL, and if so his or her professional title and jurisdiction of qualification;

(iii)

an EEL registered with the BSB, and if so his or her professional title and jurisdiction of qualification;

(iv)

an EEL based entirely at an office or offices outside England and Wales, and if so his or her professional title and jurisdiction of qualification;

(v)

an RFL, and if so his or her professional title and jurisdiction of qualification;

(vi)

any other individual approved under Part 4;

(vii)

a company approved under Part 4, and if so whether it is a licensed body, a recognised body, a European corporate practice or an authorised non-SRA firm;

(viii)

an LLP approved under Part 4, and if so whether it is a licensed body, a recognised body, a European corporate practice or an authorised non-SRA firm; or

(ix)

a partnership with separate legal personality approved under Part 4, and if so whether it is a licensed body, a recognised body, a European corporate practice or an authorised non-SRA firm;

(j)

the name of the individual who is the firm's COLP, and the name of the approved regulator which authorises that individual as an authorised person;

(k)

the name of the individual who is the firm's COFA;

(l)

any condition to which the body's authorisation is subject;

(m)

if the authorised body's authorisation is for the time being suspended, a note to state that fact; and

(n)

any other information considered necessary by the SRA for carrying out its statutory functions in the public interest, as may from time to time be prescribed.

34.3

Public information

(a)

Entries in the register must be available for inspection by any member of the public except that the SRA may withhold a recognised body's address in exceptional circumstances where the SRA considers that to do so would be in the public interest.

(b)

The date on which, and the circumstances in which, an authorised body's authorisation expired or was revoked must be made available to a member of the public on request.

Rule 35: Certificates of authorisation

35.1

When a body is granted an authorisation, the SRA must issue a certificate of authorisation.

35.2

Each certificate of authorisation must state, in respect of the authorised body:

(a)

whether it is a licence or a certificate of recognition;

(b)

the name and number under which the body is authorised;

(c)

its registered office, if it is an LLP or company;

(d)

its main practising address in England and Wales;

(e)

whether it is a partnership, an LLP or a company; and

(f)

if it is a company, whether it is:

(i)

a company limited by shares;

(ii)

a company limited by guarantee;

(iii)

an unlimited company;

(iv)

an overseas company registered in England and Wales;

(v)

an overseas company registered in Scotland;

(vi)

an overseas company registered in Northern Ireland; or

(vii)

a societas Europaea;

(g)

the date from which authorisation is granted; and

(h)

the terms and conditions to which the body's authorisation is subject.