In this news alert, Partner Andrew Pavlovic considers the background to the decision, the basis of the Court’s reasoning, and the steps firms should either be thinking about or taking now in light of the Judgment.
BACKGROUND
Legal professional privilege (“LPP”) has been recognised by the Court as “a fundamental human right long established in common law”, enabling clients to seek legal advice in the knowledge that their correspondence will not be disclosed to third parties. The privilege belongs to the client and not the solicitor they instruct, meaning the solicitor cannot waive it without the client’s consent.
Given the fundamental nature of LPP, the Courts have held that it can only be overridden by statute, either expressly, or where the override should be necessarily implied into the statute. In this regard, section 44B of the Solicitors Act 1974 (“Section 44B”), the provision under which the SRA can require solicitors/firms to provide specified documents in order to investigate whether there has been professional misconduct, does not contain an express statutory override.
Notwithstanding this, the SRA’s position has been that it is entitled to request and obtain privileged client material from those under investigation. This position was based historically on Parry Jones v the Law Society, a 1967 case relating to a notice served on a solicitor pursuant to the Solicitors Accounts Rules 1945, and more recently on the “no infringement principle” – the notion that the client’s LPP was not being infringed by disclosure to the regulator, as to the extent that the SRA could review/use the privileged material, this would be for the limited purpose of taking action against the solicitor/firm and the material could not be used to the detriment of the client.
However, in the case of Financial Reporting Council v Sports Direct International [2021] Ch 457 the Court of Appeal disavowed the “no infringement” principle, albeit in relation to a different regulator, meaning that the SRA’s position was vulnerable to challenge.
That challenge finally came in 2025, when, having been served with a Section 44B Notice, Carter-Ruck Solicitors and their client, Mohamed Amersi, sought a declaration from the Court that the SRA was not able to compel the production of material that was subject to LPP.
THE DECISION
In a lengthy Judgment, Mr Justice Butcher found that a statutory override could not be implied into section 44B, enabling the SRA to obtain privileged material.
The SRA made several arguments in support of the contention that a statutory override should be implied into section 44B. The most important of these was the argument that the statutory purpose of section 44B would be “stultified” if the SRA were not able to review privileged material as part of their investigations. In particular, in relation to complaints made by third parties (noting the SRA’s continued focus on SLAPPs) the SRA stated that they would be unable to investigate the conduct of the solicitor properly without being able to see the solicitor’s correspondence with their client.
Whilst Mr Justice Butcher acknowledged that the inability of the SRA to review privileged material might “impede” the SRA’s ability to investigate cases relating to third party complaints, he did not consider that this met the high bar required to demonstrate that the SRA’s powers would be “stultified”, noting that there were many cases where the SRA’s lack of access to privileged material would not ordinarily impact on the SRA’s ability to investigate. These included:
- Cases where the client had complained (in doing so waiving their right to privilege)
- Cases of workplace bullying and harassment
- Cases involving the iniquity exception
Furthermore, in relation to complaints made by opposing parties, the Judge noted that the correspondence between the parties could be reviewed and that this was likely to be the material relevant to determining an allegation of abusive litigation conduct. This led him to conclude that “whether or not there is a statutory override of LPP will make no difference to the ability of the SRA to properly investigate most cases where an investigation is required”.
The SRA also sought to deploy the “no infringement” principle, however Mr Justice Butcher rejected this, finding that he was bound by the decision in Sports Direct and that there was no basis for reaching a different conclusion in respect of legal regulation.
ANALYSIS
Notwithstanding Mr Justice Butcher’s comments, this decision will significantly impact on the SRA’s ability to investigate misconduct where clients are unwilling to consent to the disclosure of privileged material.
As the SRA submitted, this will most noticeably impact cases related to third party complaints. Whilst the correspondence between the parties may prima facie indicate abusive litigation, the correspondence between the solicitor and the client will demonstrate whether the solicitor advised the client appropriately, acted on instructions, and if appropriate, made clear to the client the primacy of their obligations to the Court. Indeed, in the recent case where the SDT summarily dismissed allegations against Claire Gill in relation to an allegation of sending a letter containing an improper threat of litigation (12775/2025) the SRA/SDT were able to review privileged correspondence between the solicitor and the client due to the application of the iniquity exception. The correspondence in that case demonstrated, according to the SDT, that the solicitor had acted entirely appropriately, asking relevant questions and only acting on the basis of instructions. There may accordingly be circumstances where the solicitor would want to disclose privileged correspondence to the SRA in order to defend their position, but the client may not be willing to waive privilege. To that extent, the decision could also present challenges for firms and solicitors.
Mr Justice Butcher made clear in the Judgment that he had neither considered nor expressed a view on whether the SRA should have the power to compel the production of privileged material, as this was a matter for Parliament. The SRA has already indicated that it will seek permission to appeal the Judgment, and assuming permission is granted, we will wait to see whether the Court of Appeal will take a more purposive approach, mirroring the way that the Mazur litigation developed.
Should the decision be upheld on appeal, pressure will be put on the government to legislate to provide the express statutory override that is currently absent from section 44B. Given that successive governments have indicated to the SRA their concern about the use of SLAPPs, they may be receptive to legislative change, although it is unlikely to be a priority.
WHAT FIRMS NEED TO DO NOW
Given the longstanding uncertainty over the SRA’s position on LPP, firms will have already been cautious when responding to s44B Notices. However, where client consent cannot be obtained to disclose privileged material, firms will need to respond to requests carefully to ensure that they do not disclose it inadvertently. In this regard, the Court have made a number of recent decisions expanding the scope of privilege, and there are likely to be more disputes over what is and is not privileged in a solicitor’s file. As a result, there could be an increased role for independent counsel in reviewing documents to determine whether the solicitor/firm’s have correctly asserted their client’s privilege over particular documents.
Existing investigations where firms may have already disclosed privileged material in response to s44B Notices will need to be considered, as this decision makes clear that the SRA never had the power to obtain them. This may apply even where the client had consented to the release of the material, if the client did so on the understanding that the SRA had the ability to compel the firm to disclose the material if they did not consent.
Where clients are unwilling to consent to the release of privileged material, or the SRA can no longer rely on material that had previously been disclosed, the SRA will need to reflect on whether ongoing investigations can fairly proceed. Given the SRA’s track record on SLAPPs cases to date, some may think that this is no bad thing, and that the effect of this decision may be the final nail in the coffin in the SRA’s pursuit of SLAPPs, putting the emphasis back on the Courts to determine abusive litigation conduct.
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