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Responding to a financial crime investigation

22 January 2020
This practice note aims to provide practical assistance on how to manage responding to a financial crime investigation and provides a short overview of the main powers available to law enforcement.

Legal status

This practice note is the Law Society’s view of good practice in this area. It is not legal advice.

Practice notes are issued by the Law Society for the use and benefit of its members. They represent the Law Society’s view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them but doing so will make it easier to account to oversight bodies for your actions.

Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.

For queries or comments on this practice note contact the Law Society’s Practice Advice Service.

SRA Standards and Regulations

The Solicitors Regulation Authority’s (SRA) Standards and Regulations 2019 replaced the SRA Handbook (2011) from 25 November 2019. Accordingly, this practice note is relevant to all law firms and sole practitioners authorised by the SRA. It’s also relevant to individual solicitors, registered European lawyers (REL) and registered foreign lawyers (RFL), wherever they practise.

SRA Principles

There are seven mandatory principles which apply to all those the SRA regulates and to all aspects of practice. The principles can be found in the SRA Standards and Regulations.

The principles apply to all authorised individuals (solicitors, registered European lawyers and registered foreign lawyers), authorised firms and their managers and employees. They also apply to individuals and the parts of a licensed body involved in delivering the regulated services.

Those which are particularly relevant in this context are as follows:

  • uphold the constitutional principle of the rule of law and the proper administration of justice
  • act with integrity
  • act with independence
  • comply with your legal and regulatory obligations and deal with your regulators and ombudsmen in an open, timely and co-operative manner
  • act in a way that upholds public trust and confidence in the solicitors’ profession and in the legal services provided by authorised persons

Professional conduct

The SRA Standards and Regulations includes a Code of Conduct. The Code establishes outcomes-focused conduct requirements.

As detailed below, the sections pertaining to client confidentiality and your relationship with the court are particularly relevant when responding to financial crime investigations.

Terminology

Must - A specific requirement in legislation or of a principle, rule, regulation or other mandatory provision in the SRA Standards and Regulations. You must comply, unless there are specific exemptions or defences provided for in relevant legislation or the SRA’s Regulatory Arrangements.

Should - Outside of a regulatory context, good practice for most situations in our view. In the case of the SRA Standards and Regulations, a non-mandatory provision (such as may be set out in notes or guidance).

These may not be the only means of complying with legislative or regulatory requirements and there may be situations where the suggested route is not the best possible route to meet the needs of your client. However, if you do not follow the suggested route, you should be able to justify to oversight bodies why the alternative approach you have taken is appropriate, either for your practice, or in the particular retainer.

May - A non-exhaustive list of options for meeting your obligations or running your practice. Which option you choose is determined by the profile of the individual practice, client or retainer. You may be required to justify why this was an appropriate option to oversight bodies.

See our full glossary of other terms used

Contents

  1. Introduction
    1. Who should read this practice note?
    2. What is the issue?
     
  2. Ethical obligations on disclosure
    1. General comments
    2. Confidential information
    3. Information subject to Legal Professional Privilege
    4. Express undertakings of confidentiality to the court
     
  3. Discussing law enforcement requests and orders
    1. General comments
    2. Discussions with law enforcement agencies
    3. Discussions in-house and with third parties
    4. Discussions with clients
     
  4. Powers to obtain material without entry
    1. General comments
    2. Notice to disclose – section 61 Serious and Organised Crime and Police Act 2005
    3. Notice to disclose – section 2 Criminal Justice Act 1987
    4. Production order – section 345 Proceeds of Crime Act 2002
    5. Disclosure order – section 357 Proceeds of Crime Act 2002
    6. Notice to produce – schedule 36 Finance Act 2008
    7. Further information order – section 339ZH Proceeds of Crime Act 2002
    8. Production order – section 20BA Taxes Management Act 1970
    9. Production order – schedule 1 Police and Criminal Evidence Act 1984
     
  5. Powers to enter and obtain material
    1. General comments
    2. Your rights and responsibilities
     
  6. Maintaining a complete record
    1. Copying files
    2. Forwarding files to another solicitor
    3. Voluntary return
    4. Application to the court
     
  7. Powers of arrest
    1. Arrest without a warrant
    2. Arrest with a warrant
    3. Your rights and responsibilities
     
  8. Answering questions and providing statements
    1. Questions and statements about the client
    2. Questions and statements about your involvement
     
  9. More information
    1. Law Society products and services
    2. Other
     

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The Practice Advice Service provides a dedicated support line for Law Society members and employees of law firms. Call us on 020 7320 5675.

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