SRA's Section 44B Powers Finally Determined After Many Years of Debate

The decision of Mr Justice Butcher in Carter-Ruck Solicitors and another v Solicitors Regulation Authority Limited [2026] EWHC 2416 (KB) has determined that section 44B of the Solicitors Act 1974 does not entitle the SRA to compel production of documents or information that is subject to legal professional privilege. He expressed no view on whether it would be desirable for the SRA to have those powers and said that it was ultimately a matter for Parliament. This has profound consequences for existing and (potentially) past investigations and prosecutions and raises a key issue as to the appropriate scope of the SRA's investigations. 

Facts

The case arose from an investigation by the SRA into Carter-Ruck and one of its partners concerning the firm’s conduct while acting for Mohamed Amersi in connection with bringing or threatening data protection and defamation claims in 2021 and 2022.

The SRA issued three notices under section 44B of the Solicitors Act 1974 requiring Carter-Ruck to produce documents from its client files for Mr Amersi. The notices covered material over which Mr Amersi asserted privilege and which he was not prepared to waive. He had been prepared to assist the SRA if it could satisfy him that his documents would not be shared with anyone else. However, no such agreement was reached. One of the section 44B notices was withdrawn but the SRA maintained its position in relation to the others. Carter-Ruck and Mr Amersi sought a declaration that section 44B did not authorise the compulsory production of privileged material.

Carter-Ruck and Mr Amersi contended that the effect of section 44B was not an abstract point of principle. They said that media defendants were weaponising the SRA's "campaign" to investigate SLAPPs by making complaints to deflect genuine claims. They said that the SRA was "willing to advance speculative concerns" and demand privileged materials even during ongoing litigation. The SRA said that it faced particular challenges in conducting investigations where complaints are made by a non-client and the firm and the client's interests are aligned.

The Parties' Arguments

The Claimants said that section 44B did not give the SRA any power to compel production of privileged material. They relied on the fact that LPP is a fundamental common law right and could not be overridden by statute without clear words. They relied amongst other things on the Law Society seeking and failing to obtain an express abrogation of privilege from Parliament when the section was enacted in its current form. Even if it was possible to construe section 44B in the manner contended for by the SRA, it would be incompatible with article 8 of the ECHR and it would be the duty of the court to construe it as complying with article 8.

The SRA contended that it needs to be able to consider privileged material in order to investigate potential misconduct, and that section 44B should be construed as giving it the power to compel production of client privileged documents. (It did not contend that it gave the power to compel the solicitor's own privilege.) It argued that legal professional privilege and the proper regulation of the profession are underpinned by the same public policy objective of upholding the administration of justice, and are therefore complementary rather than in tension.

The SRA argued that the legislation was to be construed as overriding the common law right by necessary implication. It relied upon the judgment in Parry-Jones v Law Society [1969] 1 Ch 1, concerning antecedent legislation said by the SRA to contain 'analogous' document production powers, and argued that the judgment in Simms v Law Society [2005] EWHC 408 (Admin) applied the conclusion in Parry-Jones to the 1974 Act.

The SRA sought to draw a contrast between section 44B and other legislative provisions in the 1974 and 2007 Acts which expressly limited the SRA's powers to non-privileged material.

In the alternative, it contended that production of documents to it was not an infringement (or was a permissible infringement) of LPP. And it relied on case law to suggest that section 44B was consistent with article 8.

Findings

Mr Justice Butcher ruled for Carter-Ruck and Mr Amersi.

The starting point is the presumption that legislation (including the 1974 Act) is subject to fundamental rights (including legal professional privilege), absent express words or necessary implication. Section 44B contains no express abrogation of privilege, so the central question was whether it does so by necessary implication.

He found that there was no necessary implication that section 44B overrode LPP. He examined and dismissed each of the six strands of argument relied on by the SRA.

He accepted that the regulation and investigation of solicitors served an important policy purpose but did not agree that that meant that it was to be more readily inferred that Parliament intended to override LPP. He referred amongst other things to the fact that the exercise of LPP often created a tension with the aim of cases being decided correctly on the basis of all the relevant evidence. Accordingly, the court could not assume that Parliament had in mind that LPP would be overridden in support of that policy objective.

He did not accept that the similarity of the wording in section 44B with that providing for the SRA's intervention powers meant that the same intention to abrogate LPP was to be inferred. He relied there on the essential difference between the tasks on an intervention and an investigation and said that the fact that an investigation may work less effectively or not at all in some circumstances did not mean that section 44B could not operate at all.

He found that the principle that Parliament should be taken to have legislated in the knowledge of the extant case law (including Parry-Jones) provided no useful guidance and observed that it was difficult to say whether the court in Parry-Jones placed any particular construction on any particular words or phrases which also appear in section 44B. In any event, Parliament would also have known in 2007 that LPP was by then established as a fundamental human right which would not be overridden by general words in a statute.

He rejected the suggestion that the absence of the power would stultify the purpose of the section. He held that any relevant stultification must be of "at least a 'major plank' of that statutory purpose" and said that he was not convinced that the type of cases that the SRA may not be able to properly investigate was a "major plank" of the statutory purpose; if it had been, then it was all the more surprising that Parliament had not provided for it. He listed examples of various categories of case where the SRA can investigate without compelling the production of privileged material, such as client complaints and matters involving workplace bullying. He further said that "… In cases of a complaint by an opposing party, the communications between the parties will be available and are likely, in many instances, to comprise the material which is relevant to an allegation of abuse of process." If there were cases where an investigation could not be performed at all then that fell within the category of an "impediment" rather than a "stultification".

Butcher J held that it was permissible to look at the Parliamentary material relating to the 2007 Act where in which an express override of privilege was proposed. He held that the particular statements did not indicate any intention to override LPP and, if anything, indicated an absence of such intention. That, he said, reinforced his construction of section 44B.

He held that Parry-Jones was binding authority for two narrow points, neither of which arose here, and that none of the other cases relied upon the SRA provided any binding authority for its position.

He further held that there was no basis for suggesting that provision of documents to a regulator did not comprise any infringement of LPP. That point had already been determined by the Court of Appeal in Sports Direct International plc v Financial Reporting Council [2021] Ch 457. Finally, he held that the issue regarding article 8 did not arise given his other findings.

Significance and practical impact

The judgment has significant effect on the manner in which the SRA will now conduct its investigations and prosecutions. The decision is likely to have a greater impact on some cases (such as those arising out of a third party complaint) than others, although much will depend on the detail of each case. The decision also has profound implications for the ability of firms and solicitors to report facts and matters to the SRA where legal professional privilege is engaged.

The SRA has indicated that it does not agree with the decision and is seeking permission to appeal. If it does not get what it wants on appeal it may have to seek a change in the law. Until either of those outcomes it may be unable, in practice, to investigate certain matters. Butcher J did not discount that possibility but said that if it was the case then it would be an "impediment to" rather than "stultification" of the SRA's overall statutory purpose.

Pending any successful appeal or change in the law, we expect that in practice the SRA will not continue to demand privileged material pursuant to section 44B. Lawyers are obliged to assert any privilege in their client files in the absence of a waiver by the client (see for example Addlesee v Dentons Europe LLP [2019] EWCA Civ 1600).

Where a document production notice is issued under section 44B (or the equivalent power relating to licensed bodies at section 93 Legal Services Act 2007), in many cases it will be necessary to carry out a privilege review in order to ensure that privileged information is not provided to the SRA. The disclosure of privileged information to the SRA may risk civil liability and/or (ironically) regulatory sanction.

Particularly difficult questions may arise in cases where the iniquity exception is engaged. In those cases, it is quite possible that no privilege will exist in relation to any part of the client file. In civil litigation that question is often determined by the court. But in Al Sadeq v Dechert LLP [2024] EWCA Civ 28 the Court of Appeal contemplated that the decision maker may be a "legal adviser determining whether to give or withhold disclosure". It is clearly not a decision that many lawyers would wish to have to make and there may emerge a debate around when, if at all, such a decision has to be taken and what happens if there is no agreement on the point. Each case is likely to turn on its own facts.

In the meantime, the SRA will have to resolve what it now does with all the privileged documents and information that it has received pursuant to section 44B or section 93 notices and what, if any, use it seeks to make of that material and the knowledge that it has gleaned from it. There is plenty of authority on the use of confidential evidence obtained by opponents in civil litigation. But confidentiality is not the concern. Privileged material is in a different class and it seems likely that the SRA will be reviewing the status of the privileged material that it does currently have in its possession. Equally, subjects of investigation will be considering what position to take in relation to investigations which involve privileged material obtained pursuant to section 44B notices. There are clearly a lot of issues to be worked through.

Looking backwards too, there may be solicitors or former solicitors who are now examining the investigations and prosecutions against them and agreements made with the SRA and costs orders made against them.

Of course, the SRA will hope that this is a temporary position and that the law will be declared, on appeal, to be as it contends. A change in the law through legislation may be very much a second choice because it is very unlikely to have any retrospective effect. But there are a number of difficult issues for solicitors and the SRA to work through before the outcome of any appeal is known and until then the law is as stated by Butcher J.