Responding to Competitors’ Allegations: A transparent overview of Lawgistics’ recent SRA investigation

In light of recent discussions in the industry press and various posts on social media regarding the legal challenges Lawgistics faced, we believe it is both fair and transparent to provide our members and the wider motor trade community with detailed context and clarity on these matters.

As a respected provider of legal services in the motor trade sector, it is imperative for us to maintain openness and address any concerns head-on. The following article offers an in-depth overview of the allegations, our comprehensive response, and the conclusive findings from the Solicitors Regulation Authority (SRA) investigation, ensuring our members are well-informed and reassured of our legal compliance and ethical standards.

In a recent and significant legal development, Lawgistics Ltd and Lawgistics Litigation for the Motor Trade CIC faced allegations from MILS LEGAL LTD trading as MILS about potential breaches of the Legal Services Act 2007. The core of the dispute centred around MILS‘ allegations that we and the CIC were potentially conducting reserved legal activities without proper authorisation, prompting a detailed investigation by the SRA.

MILS’ Allegations

MILS raised several concerns regarding our operations, primarily focusing on the legality of our service offerings:

• Breach of Legal Services Act 2007: MILS accused Lawgistics of conducting reserved legal activities such as the conduct of litigation without proper authorisation from the Solicitors’ Regulatory Authority (SRA) or the Bar Standards Board (BSB), alleging this to be in violation of the Legal Services Act 2007.
• Inadequate Regulation: MILS expressed concerns that Lawgistics Ltd and Lawgistics Litigation for the Motor Trade CIC were not appropriately regulated for the legal services we were offering, noting that neither entity appeared on the register maintained by the SRA.
• Misleading Advertising: The letter suggested that our advertising of litigation services was misleading, potentially breaching the Advertising Standards Authority (ASA) codes.
• Ultimatum to Cease Litigation Services: MILS demanded that Lawgistics stop offering and providing litigation services immediately, underlining the gravity of their allegations. They explicitly threatened to escalate the matter by filing a formal complaint with the police and the Solicitors Regulation Authority (SRA) should we fail to comply.
• Demand for Immediate Compliance Confirmation: The letter ended with a stark ultimatum, insisting that Lawgistics confirm its cessation of the disputed services without delay. MILS underscored the urgency of their demand by threatening legal action and reporting to regulatory bodies, emphasising the serious legal consequences we could face for non-compliance.

Our Firm Response

In a firm and legally astute response to the allegations raised by MILS, we defended our operational integrity and legal compliance. Key highlights of our response include:

• Clarification of Legal Acts: We corrected MILS’ reference to the Courts and Legal Services Act 2007, pointing out that the relevant legal framework is actually the Legal Services Act 2007, demonstrating our attention to detail and legal acumen.
• Reference to Baxter v Doble Judgment: We acknowledged our awareness and understanding of the Baxter v Doble judgment, noting that we had already considered its implications on our operations. We emphasised our proactive engagement with the Solicitors Regulation Authority, barristers, and insurers to ensure compliance.
• Legitimacy of Operating as a CIC: We addressed the legal standing of the Lawgistics Litigation for the Motor Trade CIC, citing Section 23 of the Legal Services Act 2007, which permits CICs to conduct reserved legal activities, thereby legitimising our operations.
• Rejection of Unfounded Allegations: Our response robustly dismissed the allegations as baseless, asserting that they stem more from commercial insecurity than from a professional duty to uphold legal standards.
• Call for Professional Courtesy: We concluded by urging MILS to cease misrepresenting our services and to maintain professional decorum, reinforcing our own commitment to ethical practices and mutual respect in the industry.

However, despite our comprehensive letter explaining our position, MILS still chose to proceed with their threat and reported us to the Solicitors Regulation Authority (SRA). This action led to a formal investigation by the SRA which we approached with the utmost seriousness and cooperation, confident in our compliance and the legitimacy of our operations.

SRA Investigation Findings

After an extensive seven month investigation, the SRA’s findings brought clarity to the matter:

• The SRA does not regulate CICs, as this falls under the jurisdiction of the Office of the Regulator of Community Interest Companies, which had accepted the CIC’s application.
• According to the Legal Services Act 2007, CICs are permitted to engage in reserved legal activities without the need for SRA authorisation.
• Lawgistics had followed the advice provided by the SRA’s Ethics department and had adjusted our operations appropriately in response to the Baxter v Doble judgment.
• The SRA concluded the matter with no further action, thereby affirming our legal compliance.

Conclusion and Future Outlook

The resolution of this matter by the SRA highlights our unwavering commitment to operating within the legal framework and maintaining high ethical standards. This outcome not only vindicates our practices but also reinforces our position as a reliable and law-abiding provider of legal services in the motor trade sector.

As we continue our journey, we remain dedicated to providing our members with the highest level of legal expertise, confident in our robust compliance with legal regulations and our ability to navigate complex legal challenges.