Legal Services · Chapter 2

The SRA Regulatory Framework

Introduction

This chapter covers the heart of professional conduct as examined in SQE1 FLK1: the SRA Standards and Regulations ('StaRs'), which came into force on 25 November 2019 and replaced the old SRA Handbook. You will master the seven SRA Principles, the SRA Code of Conduct for Solicitors, RELs and RFLs (Rules 1–8), the SRA Code of Conduct for Firms (Rules 1–9), the SRA Enforcement Strategy, undertakings, the SRA Price Transparency Rules, the SRA Digital Badge, and the SRA's risk-based approach to regulation. These are among the most heavily tested topics in the entire SQE1.

Assessment focus

For SQE1 FLK1 you must be able to apply the SRA Principles and Codes of Conduct to realistic client scenarios — not merely recite them. Expect single best answer questions ('SBAQs') that require you to identify which Principle or Code rule has been breached, to resolve conflicts between Principles, and to advise a solicitor on the correct course of action. You should understand the hierarchy of Principles (the wider public interest takes precedence over individual client interests), the two-stage Ivey test for dishonesty, the two types of conflict of interest, the absolute duty of confidentiality, the law of undertakings, and the transparency obligations. This is a closed-book assessment, so you must be able to recall the Principles, the key Code rules and the leading authorities (Bolton, Ivey, Udall) from memory.

Study tips

1) Memorise the seven Principles in order and remember they apply even in a solicitor's private life. 2) Learn the conflict rule: where Principles conflict, those serving the wider public interest (Principles 1 and 2) prevail over the client's interests (Principle 7). 3) Master the two-stage Ivey test — subjective knowledge/belief, then objective standards of ordinary decent people; no requirement that the defendant realised it was dishonest (Ghosh abolished). 4) Know the four conditions for acting despite a client conflict under Rule 6.2 (common interest/competing for the same objective + informed written consent + safeguards + reasonable to act). 5) Remember an undertaking needs no consideration, can be oral, binds the individual personally (Udall), and breach engages Rule 1.3 plus multiple Principles.

1. The SRA Standards and Regulations (StaRs) — Overview

The SRA Standards and Regulations ('StaRs') are the current foundation of the regulatory regime for solicitors in England and Wales. Before you can apply any conduct rule, you must understand what StaRs is, when it came into force, and what it contains.

The SRA Standards and Regulations (StaRs) came into force on 25 November 2019, marking a radical overhaul of the regulatory framework. StaRs replaced the SRA Handbook, which had accumulated numerous amendments, exceptions and qualifications over time. The new regime is deliberately shorter, more principles-based, and outcomes-focused. This represents a significant shift in regulatory philosophy: rather than prescribing detailed rules for every scenario, StaRs sets out the Principles and Codes of Conduct that must be followed, and expects authorised persons to exercise judgment in applying those standards to the facts of their particular situation.

Key point
The six key components of StaRs:
(1) The SRA Principles — the seven overarching requirements that apply to all authorised persons in all regulated activities.
(2) The SRA Code of Conduct for Solicitors, RELs and RFLs — the detailed rules governing the conduct of individual solicitors and equivalent persons.
(3) The SRA Code of Conduct for Firms — the rules establishing the systems and governance requirements that firms must implement.
(4) The SRA Accounts Rules — the detailed rules governing the handling and safeguarding of client money and assets.
(5) The Authorisation of Individuals Regulations — the requirements for individual solicitors to be registered with the SRA.
(6) The Authorisation of Firms Regulations — the requirements for law firms to be authorised to carry on reserved legal activities.

StaRs applies to all solicitors practising in England and Wales, Registered European Lawyers ('RELs'), Registered Foreign Lawyers ('RFLs'), and all licensed and authorised firms. It represents the current regulatory standard and is the foundation of this chapter.

Key Notes for Section 2.1: ① StaRs came into force on 25 November 2019 and replaced the SRA Handbook; ② it is shorter, principles-based and outcomes-focused; ③ its six components include the Principles, the two Codes of Conduct, the Accounts Rules and the two Authorisation Regulations; ④ it binds solicitors, RELs, RFLs and all authorised firms.

2. The Seven SRA Principles

The SRA Principles are the fundamental requirements that apply to ALL areas of legal practice. Unlike the detailed rules in the Codes of Conduct (which apply to specific situations), the Principles apply universally — inside regulated practice and outside it, in a solicitor's private and business life.

A solicitor who breaches a Principle in a private capacity — for example, by making discriminatory remarks on social media, or by acting dishonestly in a business dealing unrelated to law — may face SRA disciplinary action. This is a frequently examined point: do not assume that the Principles bite only on a solicitor's professional work.

The Seven SRA PrinciplesPrinciple 1: Act in a way that upholds the rule of law and proper administration of justice.
Principle 2: Act in a way that upholds public trust and confidence in the profession (and in legal services provided by authorised persons).
Principle 3: Act with independence.
Principle 4: Act with honesty.
Principle 5: Act with integrity.
Principle 6: Act in a way that encourages equality, diversity and inclusion.
Principle 7: Act in the best interests of each client.

The overarching purpose of regulation — both the Principles and the detailed Codes — is to maintain public trust in the profession. In Bolton v Law Society [1994] 1 WLR 512, Lord Bingham stated that the most fundamental purpose of all is 'to maintain the reputation of the Solicitors' Profession as one in which every member of whatever standing may be trusted to the ends of the earth.' That statement, made over 30 years ago, remains the lodestar of regulatory practice.

2.2.1 Hierarchy of Principles

There is no formal hierarchy among the Principles. However, the SRA has made clear that in any conflict between Principles, those serving the wider interest take precedence over those protecting individual client interests. This means that a solicitor's duty to uphold the rule of law (Principle 1) or to uphold public trust (Principle 2) will override the duty to act in the client's best interests (Principle 7) where the two conflict.

Key point
Worked example — money laundering: a solicitor who discovers or suspects that a client is involved in money laundering has a statutory duty to report to the firm's nominated officer (and through them to the National Crime Agency), even though this fundamentally conflicts with the solicitor's duty to act in the client's best interests. The public interest (fighting financial crime) takes precedence. Similarly, if a client asks a solicitor to assist in a matter that would breach the rule of law or the public interest, the solicitor must refuse, notwithstanding Principle 7.

2.2.2 Honesty and the Ivey v Genting Casinos test

Principle 4 requires all solicitors to act with honesty. The standard of honesty is determined by the common law test established by the Supreme Court in Ivey v Genting Casinos [2017] UKSC 67, in which Lord Hughes restated the test for dishonesty for both civil and criminal law.

The two-stage Ivey test for dishonesty(1) Subjective stage: the fact-finding tribunal must ascertain the actual state of the individual's knowledge or belief as to the facts — what did the individual know or believe about the situation?
(2) Objective stage: the tribunal must then determine whether the conduct was dishonest by the standards of ordinary decent people.
Critically, there is no requirement that the defendant appreciated or recognised that their conduct was dishonest.

The old test, established in R v Ghosh [1982] QB 1053, required subjective dishonesty — that the defendant realised their conduct was dishonest. That requirement was abolished by Ivey. Now, a solicitor may genuinely believe their conduct was acceptable and proper, but if ordinary decent people would regard it as dishonest, a finding of dishonesty will be made. The Ivey test has been confirmed in criminal law by Barton & Booth v R [2020] EWCA Crim 575 and is extensively applied in SRA disciplinary cases involving breach of Principle 4 (honesty) or Principle 5 (integrity).

Key Notes for Section 2.2: ① Seven Principles, applying to all practice and private life; ② no formal hierarchy, but wider-interest Principles (1, 2) prevail over client interest (7); ③ Ivey two-stage test = subjective knowledge/belief + objective standards of ordinary decent people; ④ Ghosh abolished — no need for the defendant to realise their conduct was dishonest; ⑤ regulatory purpose = maintain public trust (Bolton).

3. The SRA Code of Conduct for Solicitors, RELs and RFLs

The Code of Conduct for Solicitors, RELs and RFLs sets out in detail the conduct, behaviour and professional responsibility required of individual solicitors. It is organised into eight main areas, each comprising numbered rules. The Code is not a contract between solicitor and client and is not directly enforceable by clients, although a breach may found a complaint to the SRA or the Legal Ombudsman. It establishes the standards by which the SRA measures whether a solicitor has acted in accordance with the Principles.

2.3.1 Maintaining trust and acting fairly (Rules 1.1–1.4)

Key point
Rule 1.1 — Do not unfairly discriminate. A solicitor must not treat clients, staff or others unfairly on the grounds of protected characteristics (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation). This applies in both legal work and private matters.
Rule 1.2 — Do not abuse your position. A solicitor must not take unfair advantage of their position as a solicitor (for example, using privileged access to a client's financial information to negotiate a personal favour).
Rule 1.3 — Perform undertakings. A solicitor must perform any undertaking made to a third party within the agreed timeframe or, if none is specified, within a reasonable timeframe (see Section 2.6).
Rule 1.4 — Do not mislead. A solicitor must not mislead clients, the court or anyone else. This includes misleading by omission (failing to disclose material information) and covers the substance of what is said, not merely its technical accuracy.

2.3.2 Dispute resolution and court proceedings (Rules 2.1–2.7)

The Code establishes strict rules for solicitors engaged in dispute resolution and proceedings, reflecting the solicitor's overriding duty to the court and the administration of justice.

Key point
Rules 2.1–2.3 — Evidence. A solicitor must not misuse, tamper with or interfere with evidence, must not ask a witness to give false evidence, must not suppress or destroy evidence, and must not encourage a witness to lie.
Rule 2.4 — Properly arguable assertions. When making submissions, a solicitor must only advance arguments and assertions that are reasonably arguable on the facts and law.
Rule 2.5 — Comply with court orders. A solicitor must comply with any order of the court and must not encourage a client to breach such an order.
Rule 2.6 — Do not waste the court's time. Proceedings must be conducted efficiently.
Rule 2.7 — Advise the court of relevant law. A solicitor must inform the court of relevant statutory provisions, case law and procedural issues — including authority that is adverse to the client if it is binding or if the court would be unaware of it.

2.3.3 Service and competence (Rules 3.1–3.6)

Key point
Rule 3.1 — Valid instructions and best interests. A solicitor must only accept instructions that are proper and legal and must act in what they reasonably believe to be the client's best interests.
Rules 3.2–3.6 — Competent and timely service. A solicitor must ensure that the service provided is competent and timely, and must maintain their knowledge of the relevant law. A solicitor must not accept or continue to act in a matter if they lack the competence or knowledge to do so. Supervised persons (trainees and junior lawyers) are accountable for their work, and the supervising lawyer remains responsible for ensuring compliance with this rule.

2.3.4 Client money (Rule 4)

Rule 4 — Safeguard money and assets. A solicitor must safeguard any money and assets entrusted to them by clients. This rule is amplified by the detailed SRA Accounts Rules, which govern the operation of client accounts, the segregation of client and firm money, reconciliation, and interest-bearing accounts. Client money protection is a cornerstone of public trust in solicitors.

2.3.5 Referrals, introductions and separate businesses (Rule 5)

Rule 5.1 — A solicitor may refer a client to another solicitor or specialist, but must ensure that the referral is to a competent person in good standing. Fee-sharing arrangements must be transparent and comply with the Code.

2.3.6 Conflict of interests and confidentiality (Rules 6.1–6.5)

The Code distinguishes two types of conflict: an own interest conflict and a client conflict.

Own interest conflict (Rule 6.1)A conflict that arises where a solicitor's own financial or personal interest conflicts with the interests of a client. A solicitor cannot act if such a conflict exists or if there is a significant risk of one. This is an absolute rule with very limited exceptions.
Client conflict (Rule 6.2)A conflict that arises where the interests of two or more current clients conflict. A solicitor cannot act unless ALL FOUR conditions are satisfied: (i) the clients have a substantially common interest OR are competing for the same objective (e.g. two purchasers bidding for the same property); (ii) all clients give informed consent, documented in writing; (iii) effective safeguards are in place to protect each client's confidential information (such as information barriers); and (iv) it is reasonable to act for all the clients in the circumstances.
Key point
Rule 6.3 — Confidentiality. A solicitor must keep confidential all information about the affairs of current and former clients. This applies during and after the retainer and is absolute UNLESS: (i) the law requires or permits disclosure; (ii) the client consents; (iii) disclosure is necessary to prevent serious injury to a person; or (iv) the information is publicly available. The duty is owed to clients, not third parties, and a solicitor cannot be forced to breach it without the client's consent even by court order (subject to statutory exceptions).
Rule 6.4 — Duty of disclosure. A solicitor must tell the client all information material to the matter, UNLESS: (i) the law prohibits disclosure; (ii) the client consents to non-disclosure; (iii) there is a risk of serious injury; or (iv) the information is privileged and was disclosed to the solicitor by mistake.
Rule 6.5 — Former clients. A solicitor cannot act against a former client where the new work has an adverse interest and the solicitor holds material confidential information about the former client, unless effective measures prevent any real risk of disclosure and the former client gives informed consent in writing.
Key point
SQE EXAM TIP — Where Rule 6.3 (confidentiality) and Rule 6.4 (disclosure) collide — typically because the solicitor holds confidential information about one client that is material to another — the duty of confidentiality takes precedence. The solicitor must not act if doing so would put the duty of disclosure to one client in conflict with the duty of confidentiality to another, unless the safeguards and consents are in place.

2.3.7 Cooperation and accountability (Rules 7.1–7.12)

Key point
Rule 7.1 — Keep up to date. Maintain legal knowledge relevant to your practice.
Rules 7.2–7.4 — Cooperate with the SRA. Cooperate fully with the SRA's regulatory and investigation processes, providing information and documents on request.
Rule 7.6 — Report serious issues. Inform the SRA if you are charged with or convicted of a criminal offence, or become insolvent, and if you become aware that information provided to the SRA is inaccurate.
Rule 7.7 — Report serious breaches. Report to the SRA any facts or matters capable of constituting a serious breach of the SRA's regulatory arrangements by any person, including other solicitors. A failure to report is itself a serious breach.
Rule 7.9 — Whistleblower protection. A solicitor who reports (or is suspected of reporting) a breach must not be penalised or retaliated against.
Rule 7.11 — Honesty and openness with clients. When something goes wrong, a solicitor must be honest and open with the client about the nature and extent of the problem, including delays, errors and remedial steps.
Rule 7.12 — Compliance through the firm. The duty to report (Rules 7.6 and 7.7) may be satisfied by reporting through the firm's compliance officer (the COLP).

2.3.8 Complaints handling and client information (Rules 8.1–8.11)

Key point
Rules 8.2–8.3 — Complaints procedures. A firm must have a complaints procedure and must tell clients at the outset that they have the right to complain and how to do so. Complaints must be dealt with promptly, fairly and free of charge.
Rule 8.4 — Unresolved complaints after 8 weeks. If a complaint is not resolved within 8 weeks, the firm must advise the client of their right to refer the complaint to the Legal Ombudsman and provide details of the relevant ADR body.
Rule 8.5 — Deal promptly and fairly. Handle complaints professionally, listen to the client's concerns and investigate properly.
Rules 8.6–8.8 — Best possible information. Give clients the best possible information about how their matter will be handled, including costs, interest on client money (if applicable) and the complaints procedure.
Rule 8.9 — Unsolicited approaches. A solicitor must not make unsolicited approaches to potential clients (marketing), except to existing or former clients where a relationship is already established.
Rules 8.10–8.11 — Explain regulation and protection. Tell clients that they are regulated by the SRA, what that means, and the client's right to complain to the Legal Ombudsman.
Section 2.3 Key Notes: ① Eight areas, Rules 1–8; ② Rule 1.3 undertakings; ③ Rule 3.2 competence — do not act without it; ④ Rule 6.1 own-interest conflict (absolute) vs Rule 6.2 client conflict (four conditions incl. informed written consent); ⑤ Rule 6.3 confidentiality is absolute and prevails over disclosure; ⑥ Rule 7.7/7.12 report serious breaches (via COLP); ⑦ Rule 8.4 unresolved after 8 weeks → Legal Ombudsman.

4. The SRA Code of Conduct for Firms

The Code of Conduct for Firms applies to all firms authorised to provide legal services. It establishes the systems, governance and compliance requirements that firms must implement. The SRA can take regulatory action against a firm for a serious breach, and also against the firm's managers, compliance officers and relevant employees. A 'serious breach' can be an isolated incident or a pattern of behaviour that is serious in nature or impact.

The Firms Code mirrors the Solicitors Code but is organised around firm-level responsibilities.

Key point
Rules 1.1–1.5 — Maintaining trust and acting fairly: including non-discrimination, management of conflicts, and the requirement to publish diversity data on the firm's website to promote transparency.
Rules 2.1–2.5 — Compliance and business systems: financial-stability monitoring, appropriate management systems, record-keeping, and controls over supervised staff.
Rules 3.1–3.9 — Cooperation and accountability: reporting financial difficulties to the SRA, allowing the SRA access to premises, and cooperating with investigations.
Rules 4.1–4.4 — Service and competence: ensuring the firm is run by competent people and that clients receive competent service.
Rules 5.1–5.2 — Client money and assets: safeguard client money, comply with the SRA Accounts Rules, and properly segregate client and firm money.
Rule 6 — Conflict, confidentiality and disclosure: mirrors the Solicitors Code but at firm level.
Rules 7–9 — Managers and compliance officers: personal responsibility on managers and on the COLP (Compliance Officer for Legal Practice) and COFA (Compliance Officer for Finance and Administration). The COLP oversees compliance with the Code and handles serious-breach reporting.
Section 2.4 Key Notes: ① Firms Code = systems and governance; ② applies to all authorised firms; ③ SRA can act against the firm, managers, COLP/COFA and employees; ④ a serious breach may be isolated or a pattern; ⑤ firms must publish diversity data and comply with the Accounts Rules.

5. SRA Enforcement Strategy

The SRA's approach to enforcement is guided by its public interest purpose: 'to protect customers, set and enforce high professional standards, and support access to affordable legal services, the rule of law and the administration of justice.'

The SRA identifies three purposes of regulation: (i) ensuring a strong, competitive legal market; (ii) ensuring quality and client care; and (iii) promoting an ethical culture among legal professionals.

The Strategy acknowledges that error is unavoidable in professional practice. The SRA therefore focuses its enforcement resources on serious issues — breaches that risk significant harm to the public, damage to the profession's reputation, or undermining of the regulatory system. Minor technical breaches or isolated errors may result in gentle persuasion or informal resolution, while serious breaches result in investigation and formal discipline.

Aggravating v Mitigating Factors (Enforcement Strategy)
Aggravating factorsMitigating factors
Intent / deliberate conductGenuine regret and remorse
Dishonesty involvedConstructive engagement with the SRA investigation
Extent of harm or risk of harm causedEvidence of remedial action
Number of victims affectedCooperation with the regulatory process
Vulnerability of those affectedPrompt self-reporting of the breach
Seniority of the person; pattern of behaviourIsolated incident; good prior record
Key point
SQE EXAM TIP — private life is in scope. The Strategy is notably silent on any distinction between work-related and private conduct. Activity in a solicitor's private life is expressly open to examination: dishonesty in a personal financial matter, a conviction for drink-driving, or harassment on social media may all be subject to SRA discipline because they undermine public confidence in the profession.
The six SRA Topic GuidesThe SRA provides six Topic Guides detailing enforcement policy in particular areas: (1) Competence and Standard of Service; (2) Criminal offences outside practice; (3) Driving with excess alcohol; (4) SRA Price Transparency rules; (5) Social media and offensive communications; and (6) Anti-money laundering.

2.5.1 Purpose of regulation — Bolton v Law Society

The regulatory purpose identified in Bolton v Law Society [1994] 1 WLR 512 remains authoritative. Lord Bingham stated that the most fundamental purpose of all is 'to maintain the reputation of the Solicitors' Profession as one in which every member of whatever standing may be trusted to the ends of the earth.' Regulation is not primarily about punishment or retribution; it is about public protection and maintaining trust. A solicitor who has behaved dishonestly or incompetently may be disciplined not because they are wicked, but because their conduct undermines public confidence that solicitors can be trusted.

Section 2.5 Key Notes: ① Enforcement is public-interest driven; ② three purposes of regulation; ③ focus on serious breaches; error is tolerated; ④ weigh aggravating v mitigating factors; ⑤ private life in scope; ⑥ six Topic Guides; ⑦ Bolton — regulation protects the reputation of the profession, not punishment.

6. Undertakings

An undertaking is one of the most heavily examined topics in Legal Services, because it carries serious personal consequences for the solicitor who gives it. You must know its definition, why it is enforceable, who can give it, and what happens on breach.

Undertaking (SRA Glossary)'A statement, given orally or in writing, whether or not it includes the word “undertake” or “undertaking”, made by or on behalf of you or your firm, in the course of practice, to someone who reasonably places reliance on it, that you or your firm will do something, or cause something to be done, or refrain from doing something.'
Key point
Why undertakings are dangerous:
(i) An undertaking is a legally enforceable promise.
(ii) It does NOT require consideration (unlike a contract).
(iii) It is enforceable by the court under its inherent (summary) jurisdiction over solicitors, and can also be enforced through the SRA's disciplinary process.
(iv) It may be given by any person within the firm, including trainee solicitors and paralegal staff — seniority is irrelevant.
(v) A promise to give an undertaking can itself constitute an undertaking.

In Udall v Capri Lighting Ltd [1988] QB 907, the court held that a solicitor is personally liable on an undertaking, even where the failure to perform is caused by the client's actions or by circumstances beyond the solicitor's control. This is a striking feature of undertaking law: the solicitor cannot escape liability by blaming the client or external events. If the solicitor gives an undertaking and fails to perform, the solicitor is in breach.

Key point
Best practice and consequences of breach. Best practice is to give undertakings in writing to avoid misunderstanding or dispute — but a verbal undertaking is equally binding. A breach engages multiple regulatory breaches: breach of Rule 1.3 (perform undertakings within the agreed or reasonable timeframe), and breaches of Principles 1 (rule of law), 2 (public trust), 4 (honesty), 5 (integrity) and 7 (client's interests).
Section 2.6 Key Notes: ① Undertaking = enforceable promise; ② no consideration needed; ③ enforceable by court's summary jurisdiction and by the SRA; ④ anyone (including a trainee) can give one; ⑤ oral undertakings bind; ⑥ Udall — solicitor personally liable even where the client is at fault; ⑦ breach engages Rule 1.3 and Principles 1, 2, 4, 5 and 7.

7. Price Transparency, the Digital Badge and Risk-Based Regulation

StaRs introduced a transparency agenda designed to help clients compare prices and services and to verify that a firm is genuinely regulated. This section covers the Price Transparency Rules, the SRA Digital Badge and the SRA's risk-based approach to regulation.

2.7 SRA Price Transparency Rules

The SRA Price Transparency Rules were introduced as part of StaRs (25 November 2019). They require regulated firms to publish price and service information on their websites for certain areas of work, enabling clients to compare prices and services across different legal service providers.

The seven specified areas of work(1) Residential conveyancing; (2) Probate (uncontested estates); (3) Motoring offences (summary conviction matters); (4) Employment tribunal (unfair / wrongful dismissal); (5) Immigration (applications, appeals); (6) Debt recovery (up to £100,000); and (7) Licensing (business premises).
Key point
What must be published. For each area, firms must publish: (i) the total cost or a cost range; (ii) the basis of the charges (hourly rate, fixed fee, etc.); (iii) what is included and excluded from the price; (iv) likely disbursements; and (v) whether VAT is payable. The obligation applies to all regulated firms regardless of size.

2.8 SRA Digital Badge

From 25 November 2019, all regulated firms have been required to display the SRA Digital Badge on their websites. The Badge is a clickable link that directs users to the firm's page on the SRA register, confirming the firm's regulated status. This is another element of the transparency agenda, giving clients and third parties a simple way to verify that a firm is genuinely regulated by the SRA.

2.9 Risk-Based Regulation

The SRA adopts a risk-based approach to regulation. Rather than treating all firms and activities as equally risky, the SRA prioritises its resources on the areas of greatest risk to the public. This involves proactive monitoring through thematic reviews (reviews of particular practice areas across multiple firms), visits, and data analysis.

Key point
How the SRA assesses a firm's risk profile: the nature of the firm's work (conveyancing is higher-risk because large sums of client money are involved); the vulnerability of the clients served (consumer clients are generally more vulnerable than commercial clients); the firm's complaint history; its financial stability; and any previous regulatory concerns. The SRA's enforcement response is proportionate to the assessed risk and harm.
Section 2.7 Key Notes: ① Price Transparency Rules cover seven areas (conveyancing, probate, motoring, employment tribunal, immigration, debt recovery up to £100k, licensing); ② must publish cost, basis, inclusions/exclusions, disbursements, VAT — for all firms; ③ Digital Badge links to the SRA register; ④ risk-based regulation prioritises high-risk firms and applies proportionate enforcement.

8. Key Notes (Chapter Summary)

The following summary table consolidates every rule, authority and date examined in this chapter. Treat it as a revision checklist — you should be able to state each point and cite the relevant authority from memory.

Chapter 2 — Key Notes Summary
PointAuthority
StaRs replaced the SRA Handbook from 25 November 2019.SRA Standards and Regulations 2019
Seven SRA Principles apply to all areas of practice, including private life.SRA Principles
Wider-interest Principles override individual client interests.SRA Principle 1/2 vs 7
Purpose of regulation is to maintain the reputation of the profession.Bolton v Law Society [1994] 1 WLR 512
Two-stage test for dishonesty (subjective knowledge + objective standards); Ghosh abolished.Ivey v Genting Casinos [2017] UKSC 67; Barton & Booth v R [2020] EWCA Crim 575
Two types of conflict: own interest conflict and client conflict.Code of Conduct Rules 6.1–6.2
Client conflict: may act only if substantially common interest / competing for same objective + informed consent in writing + safeguards + reasonable.Rule 6.2
Confidentiality of current and former clients is absolute unless exceptions apply; prevails over disclosure.Rules 6.3–6.4
Must report serious breaches to the SRA (or via the COLP).Rules 7.7 / 7.12
Complaints unresolved within 8 weeks → advise of the Legal Ombudsman.Rule 8.4
Undertaking: enforceable promise, no consideration needed, can be oral, binds the individual personally.SRA Glossary; Udall v Capri Lighting Ltd [1988] QB 907
Enforcement Strategy: focus on serious issues; aggravating / mitigating factors considered.SRA Enforcement Strategy
Six Topic Guides: competence, criminal offences, drink-driving, transparency, social media, AML.SRA Topic Guides
Price Transparency Rules cover seven areas (incl. conveyancing, probate, motoring).SRA Transparency Rules
SRA Digital Badge required on all regulated firm websites from 25 November 2019.SRA Standards and Regulations 2019

9. Revision Notes (Short-Answer Questions)

Use these short-answer questions to test your recall of the underlying principles. Attempt each question closed-book, write a full answer, then compare it against the model note provided.

Q1. The seven SRA Principles and their hierarchy
List the seven SRA Principles and explain the significance of the hierarchy between them.
Answer & explanation
The seven SRA Principles require authorised persons to act: (1) in a way that upholds the rule of law and proper administration of justice; (2) in a way that upholds public trust and confidence in the profession; (3) with independence; (4) with honesty; (5) with integrity; (6) in a way that encourages equality, diversity and inclusion; and (7) in the best interests of each client. There is no formal hierarchy, but the SRA has made clear that where Principles conflict, those serving the wider public interest (Principles 1 and 2) take precedence over the individual client's interests (Principle 7). So a solicitor who discovers a client is involved in money laundering must report to the firm's nominated officer even though this conflicts with the duty to act in the client's best interests. The hierarchy reflects the regulatory purpose identified in Bolton v Law Society — maintaining public trust in the profession is the paramount objective.
Q2. The Ivey test for dishonesty
Explain the Ivey v Genting Casinos test for dishonesty and its relevance to SRA disciplinary proceedings.
Answer & explanation
In Ivey v Genting Casinos [2017] UKSC 67, the Supreme Court restated the test for dishonesty in both civil and criminal law. The test has two stages. First, the tribunal must ascertain (subjectively) the actual state of the individual's knowledge or belief as to the facts. Second, the tribunal must determine whether the conduct was dishonest by applying the (objective) standards of ordinary decent people. Crucially, there is no requirement that the defendant appreciated that their conduct was dishonest — the old Ghosh requirement of subjective awareness was abolished. The test was confirmed for criminal law in Barton & Booth v R [2020] EWCA Crim 575. For SRA disciplinary purposes the Ivey test applies whenever a solicitor's honesty (Principle 4) or integrity (Principle 5) is in question: a solicitor may genuinely believe their conduct was acceptable, but if ordinary decent people would regard it as dishonest, a finding of dishonesty will follow.
Q3. Conflicts of interest
Describe the rules governing conflicts of interest under the SRA Code of Conduct for Solicitors.
Answer & explanation
The Code distinguishes two types of conflict. An own interest conflict (Rule 6.1) arises where a solicitor's personal interest conflicts with a client's interests — the solicitor cannot act if such a conflict exists or there is a significant risk of one. A client conflict (Rule 6.2) arises between two or more current clients; the solicitor cannot act unless all four conditions are met: (i) the clients have a substantially common interest or are competing for the same objective; (ii) all clients give informed consent, evidenced in writing; (iii) effective safeguards protect each client's confidential information; and (iv) it is reasonable to act for all the clients. Rule 6.5 extends protection to former clients: a solicitor cannot act against a former client where the new client has an adverse interest and the solicitor holds material confidential information about the former client, unless effective measures prevent any real risk of disclosure and the former client gives informed consent in writing. The duty of confidentiality (Rule 6.3) is absolute and takes precedence over the duty of disclosure unless the law requires or permits disclosure, or the client consents.
Q4. Undertakings
What is an undertaking in the context of solicitors' practice, and what are the consequences of breach?
Answer & explanation
An undertaking is defined in the SRA Glossary as a statement, given orally or in writing, made by or on behalf of a solicitor or firm in the course of practice, to someone who reasonably places reliance on it, that the solicitor or firm will do something, cause something to be done, or refrain from doing something. It is a legally enforceable promise that does not require consideration — distinguishing it from a contract. Undertakings may be given by any person within the firm, including trainees. In Udall v Capri Lighting Ltd [1988] QB 907, the court held that a solicitor is personally liable on an undertaking even when acting on behalf of a client. The consequences of breach include: (i) SRA disciplinary proceedings for breach of Rule 1.3; (ii) enforcement by the court under its summary jurisdiction over solicitors; (iii) personal financial liability; and (iv) potential findings of breach of Principles 1, 2, 4, 5 and 7. Best practice is to give undertakings in writing, but a verbal undertaking is equally binding, and a promise to give an undertaking can itself be treated as an undertaking.
Q5. The SRA Enforcement Strategy
Outline the SRA Enforcement Strategy, including the role of aggravating and mitigating factors.
Answer & explanation
The SRA Enforcement Strategy sets out how the SRA will enforce the conduct rules. It is guided by the public interest purpose of regulation: to maintain and build public trust and confidence in solicitors by protecting customers, setting and enforcing high professional standards, and supporting access to affordable legal services. The Strategy recognises three purposes: ensuring a strong, competitive legal market; ensuring quality and client care; and promoting a culture of ethical values. The SRA accepts that error is unavoidable and focuses enforcement on serious issues. Aggravating factors include intent, harm caused, impact on victims, vulnerability of those affected, the seniority of the person involved, and any element of dishonesty. Mitigating factors include expressions of regret or remorse, constructive engagement with the regulatory process, and evidence of remedial action. Activity in a solicitor's private life is expressly open to examination. Six Topic Guides provide detailed guidance on: (1) Competence and Standard of Service; (2) Criminal offences outside practice; (3) Driving with excess alcohol; (4) SRA Price Transparency rules; (5) Social media and offensive communications; and (6) Anti-money laundering.

10. MCQ Practice — Five SQE-Style Questions

Each of the following five questions mirrors the style, length and difficulty of the SQE1 FLK1 single best answer questions. Attempt each question closed-book, write down your answer, then turn to the answer key. The answer key explains why each option is correct or incorrect — read every explanation in full.

Question 1
A solicitor acts for two clients who are competing bidders for the same commercial property. Neither client is aware that the solicitor also acts for the other. The solicitor believes they can act fairly for both clients. Which ONE of the following statements BEST describes the position?

A. The solicitor may continue to act for both clients because they are competing for the same objective, which is permitted under Rule 6.2.

B. The solicitor may continue to act for both clients provided each client gives oral consent.

C. The solicitor cannot act for both clients because a client conflict exists, and the conditions for acting despite the conflict are not met — in particular, there is no informed consent in writing.

D. The solicitor cannot act because this is an own interest conflict under Rule 6.1.

E. The solicitor may continue to act provided effective information barriers are in place.

Answer & explanation
Answer: C.
C is correct — the scenario involves a client conflict (Rule 6.2). The 'competing for the same objective' gateway is available, but all four conditions of Rule 6.2 must be met, and here neither client has given informed consent in writing, so the conditions are not satisfied.
A is incorrect — competing for the same objective is a necessary but not sufficient condition.
B is incorrect — consent must be evidenced in writing, not given orally.
D is incorrect — this is a client conflict, not an own interest conflict.
E is incorrect — information barriers alone do not satisfy the consent requirement. (See Section 2.3.6.)
Question 2
A solicitor discovers that a colleague in the same firm has been misappropriating client money from the firm's client account. The solicitor is concerned about the implications of reporting this to the SRA. Which ONE of the following BEST describes the solicitor's obligation?

A. The solicitor has no obligation to report the matter because it is the firm's responsibility, not the individual solicitor's.

B. The solicitor should report the matter to the firm's compliance officer (COLP), which satisfies the reporting obligation under Rule 7.7/7.12.

C. The solicitor must report the matter directly to the police but has no obligation to inform the SRA.

D. The solicitor should wait to see if the firm resolves the matter internally before taking any action.

E. The solicitor may choose whether or not to report the matter, as reporting is discretionary under the Code.

Answer & explanation
Answer: B.
B is correct — under Rule 7.7 a solicitor must report to the SRA any facts or matters capable of being a serious breach by any person, and Rule 7.12 provides that this obligation may be satisfied through the firm's COLP. Misappropriation of client money is plainly a serious breach.
A is incorrect — individual solicitors have a personal reporting obligation.
C is incorrect — the obligation is to report to the SRA (or via the COLP); police involvement may also be appropriate but does not replace it.
D is incorrect — the obligation to report is immediate, not contingent on the firm acting first.
E is incorrect — reporting is mandatory, not discretionary; Rule 7.9 provides whistleblower protection. (See Section 2.3.7.)
Question 3
A client instructs a solicitor to act in a residential conveyancing transaction and asks how much it will cost. The solicitor's firm has a website but does not publish any pricing information for conveyancing services. Which ONE of the following BEST describes the regulatory position?

A. The firm has no obligation to publish pricing information because conveyancing fees vary too much to be published in advance.

B. The firm is in breach of the SRA Price Transparency Rules, which require regulated firms to publish price and service information for residential conveyancing.

C. The firm is in breach of the SRA Accounts Rules for failing to disclose fee information.

D. The firm has no obligation to publish pricing information provided it gives individual clients a costs estimate at the start of the retainer.

E. The obligation to publish pricing information applies only to firms with more than 50 employees.

Answer & explanation
Answer: B.
B is correct — the SRA Price Transparency Rules (part of StaRs) require regulated firms to publish price and service information on their websites for certain categories of work, including residential conveyancing. The information must include total cost or range, basis of charges, inclusions and exclusions, likely disbursements, and whether VAT applies.
A is incorrect — the Rules specifically cover conveyancing.
C is incorrect — this is a transparency issue, not an Accounts Rules issue.
D is incorrect — an individual estimate does not satisfy the obligation to publish.
E is incorrect — the Rules apply to all regulated firms regardless of size. (See Section 2.7.)
Question 4
A solicitor acting in a property transaction gives an oral undertaking to the buyer's solicitor to discharge the existing mortgage on completion. After completion, the solicitor fails to discharge the mortgage because the client has used the completion funds for another purpose. The buyer's solicitor demands performance. Which ONE of the following BEST describes the position?

A. The undertaking is not binding because it was given orally, not in writing.

B. The solicitor is not personally liable because the failure was caused by the client's actions, not the solicitor's.

C. The solicitor is personally liable on the undertaking. An undertaking is enforceable regardless of whether it was given orally or in writing, and the solicitor's personal liability is not affected by the client's conduct.

D. The undertaking is unenforceable because no consideration was given for it.

E. The buyer's solicitor should pursue the client directly, as undertakings only bind the firm, not individual solicitors.

Answer & explanation
Answer: C.
C is correct — an undertaking is a legally enforceable promise that can be given orally or in writing. Under Udall v Capri Lighting Ltd [1988] QB 907, a solicitor is personally liable on an undertaking even where the failure to perform is caused by the client's actions.
A is incorrect — oral undertakings are binding.
B is incorrect — the solicitor's liability is personal and independent of the client's actions.
D is incorrect — undertakings do not require consideration (they are enforceable under the court's summary jurisdiction).
E is incorrect — undertakings bind the individual solicitor who gives them (as well as the firm). (See Section 2.6.)
Question 5
A newly qualified solicitor is asked to advise a client on a complex tax planning matter. The solicitor has no experience in tax law and has not undertaken any training in this area since qualification. The solicitor is the only lawyer available in the office that day. Which ONE of the following BEST describes the appropriate course of action?

A. The solicitor should proceed with the advice because a solicitor is qualified to advise on all areas of law.

B. The solicitor should advise the client to the best of their ability, noting any areas of uncertainty, because refusing to act would breach Principle 7 (acting in the best interests of the client).

C. The solicitor should decline to advise on the matter and explain to the client that they do not have the competence to provide the advice, offering to arrange for a suitably qualified colleague or another firm to assist.

D. The solicitor should advise the client but charge a reduced fee to reflect their lack of experience.

E. The solicitor should give preliminary advice and then seek confirmation from a tax specialist later, without informing the client that the advice is preliminary.

Answer & explanation
Answer: C.
C is correct — under Rule 3.2 of the Code, a solicitor must ensure that the service provided is competent and timely. A solicitor with no experience or training in tax law cannot provide competent advice on a complex tax matter; Principle 7 (best interests of the client) requires the solicitor to recognise their limitations and refer the client to someone who can advise competently.
A is incorrect — qualification does not confer competence in all areas.
B is incorrect — advising without competence does not serve the client's best interests.
D is incorrect — charging less does not cure incompetence.
E is incorrect — failing to tell the client that the advice is preliminary would breach Rule 7.11 (duty to be honest and open with clients). (See Section 2.3.3.)
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