Principle 5.1a of the Code of Conduct requires you to “provide accurate and complete documentation and information on an application for a practising certificate and you must promptly notify the CLSB of any subsequent event that impacts on your fitness to be a Costs Lawyer”.

This means that, when you apply for a practising certificate, you will need to tell us about any disclosable events that have occurred since you last applied for a practising certificate. You also need to notify us promptly of any new disclosable events that occur throughout the practising year, without waiting until you apply for a new practising certificate.

Disclosable events are set out in Practising Rule 4.2. The events that a Costs Lawyer must disclose are that they have:

1. been subject to any criminal charge, conviction or caution, subject to the Rehabilitation of Offenders Act 1974;
2. been subject to an adjudication of bankruptcy;
3. been granted a debt relief order;
4. entered into an individual voluntary arrangement or a partnership voluntary arrangement;
5. been a director of any company or partner in an LLP or partnership that has been the subject of a winding up order, an administrative order or an administrative receivership, or has otherwise been wound up or put into administration in circumstances of insolvency;
6. been disqualified from being a company director or the trustee of a charity;
7. been the subject of disciplinary proceedings by any regulatory or professional body;
8. been the subject of an adverse order or finding of a civil court or employment tribunal; or
9. become aware of any other matter that might reasonably be expected to be disclosed in affecting their fitness to become or remain a Costs Lawyer.

Paragraph 9 above encompasses any event that might reasonably affect your fitness to practise. If you’re not sure whether an event falls into this category, you should contact us for advice.

Practising Rule 4.3 also provides that, after applying for a practising certificate, you (as the applicant) must “make a prompt report to the CLSB of any material changes of which the applicant is aware to information previously provided to the CLSB by the applicant or on their behalf relating to the applicant or their practice, including any change to the information recorded in the register”. This means that, in addition to notifying us of disclosable events, you should tell us about changes to your practising arrangements such as your employment details, insurance cover, name and so on. This allows us to contact you in urgent situations and ensure the Register of Costs Lawyers is up to date.

Principle 5.2 of the Code of Conduct provides that you must “promptly notify the CLSB of any breach of its regulatory arrangements by you or other Costs Lawyers and notify any other approved regulator, as appropriate, if you reasonably believe there has been a serious breach of their regulatory arrangements by any person regulated by them (including you)”.

Unlike for a disclosable event under the Practising Rules, you will need to use your professional discretion when deciding whether it is necessary to notify us of an event under Principle 5.2. There are several factors to consider, the main two being:

• the types of breaches the CLSB will investigate; and
• whether you need to weigh other obligations – such as duties to your client and the duty to act within the law at all times – against your duty to make a report.

These factors are considered in detail in the next two sections.

As set out in our policy statement on enforcement and sanctions, it is not an effective or proportionate use of our resources to investigate every breach of our regulatory rules. We are primarily concerned with taking enforcement action against serious breaches, not those which are merely trivial. Behaviour involving dishonesty, lack of integrity or significant harm to consumers, or posing a high risk to the public interest, to the reputation of the profession or to the administration of justice will always be serious.

Similarly, your obligation to report information to us does not extend to notifying us of every allegation of misconduct. We want to receive reports of serious matters, where we are likely to take regulatory action, bearing in mind that we do so in the public interest and may need to act to protect clients or the public from risk of harm.

We also do not expect you to simply pass on any concerns that are raised with you without question. We expect you to turn your mind to the matter and consider whether there is evidence (whether documentary or witness evidence) to suggest that a breach of our regulatory rules – one that is beyond trivial – has occurred.

By way of example, the following are breaches of our regulatory rules that we would not expect you to report:

• Your paralegal sends the old version of your complaints procedure, which is no longer compliant with the CLSB’s requirements, to a new client. When closing the file you realise that the wrong version was sent. You send the client the updated complaints procedure and ensure your paralegal has the new version for use going forward.
• A competitor costs firm begins offering costs services to litigants in person. You notice the advertising on their website is not compliant with consumer law, as explained in the Guidance Note on Dealing with Consumers in the Costs Lawyer Handbook. You email the firm to inform them of this, and you see the following week that the website has been changed and is now compliant.
• A colleague tells you that a Costs Lawyer acting for the opposing party in a dispute behaved “totally deplorably” in court that day. When you ask for more information or a transcript of the hearing, your colleague just says that the other Costs Lawyer always knows how to make others look bad in front of their clients and the judge.

You might find yourself in a situation where you have information to report to us, but the information is confidential, privileged, commercially sensitive, contains personal data or otherwise needs to be handled with care. In such situations, you must weigh your reporting obligations against other duties, such as duties owed to your client and your duty to act within the law at all times.

We appreciate that this balancing act is not always easy. You can contact us for advice on specific situations, including on a confidential or anonymous basis if need be. General guidance around confidential information, privileged information and personal data is provided below. In some cases, it will be necessary to obtain specialist legal advice.

• Confidential information: Principle 7 of the Code of Conduct requires you to keep the affairs of your client confidential. There are also obligations of confidence arising in general law and under court orders in certain types of cases. You will need to take care if you make a report to us that relies on or discloses confidential information and, if you can make a report in a way that protects confidential information, you should do so. However, the fact that information is confidential should not deter you entirely from making a report when it is appropriate to do so. Whilst a balancing exercise is required to consider where the public interest lies, there is a clear public interest in reporting misconduct to us and the disclosure of confidential information is likely to be justified where this is provided in order to enable us to discharge our regulatory functions.

• Legal professional privilege: It is important to consider carefully whether any information you are reporting to us is covered by legal professional privilege (either legal advice privilege or litigation privilege). You should inform us in advance if you intend to disclose privileged information so we can discuss this with you. It may be necessary to seek the consent of the client who benefits from the privilege. Otherwise, it might be necessary for us to seek an order for disclosure, if it is essential that we access the privileged information to fully investigate the reported matter.

• Personal data: It is unlikely that you will breach data protection laws by reporting information that allows us to discharge our regulatory functions. Personal data can be processed without the express consent of the data subject where this is necessary for the performance of a task carried out in the public interest. If you have concerns about sharing personal data with us, extensive guidance is available on the website of the Information Commissioner’s Office about legitimate bases for processing data.

Given the wide range of issues you might need to tell us about, we do not use a template reporting form. Rather, you can contact us through our usual channels to make a report. There is further information on our complain about a Costs Lawyer page that relates primarily to complaints from clients, but is also relevant to self-reporting and making reports about other Costs Lawyers.  

Under the Code of Conduct, you must fulfil your reporting obligations “promptly”.

For disclosable events under the Practising Rules, this means you must tell us about a relevant event as soon as reasonably practicable after the event has occurred (see Practising Rule 4.1(c)).

In relation to reporting breaches of our regulatory rules, we appreciate that you might need to verify information or investigate matters to determine whether it is necessary and appropriate to make a report (see above under Breaches of our regulatory rules – Types of breaches the CLSB will investigate and Breaches of our regulatory rules – Weighing reporting obligations against other duties). We understand that this process can take time.

However, once you have sufficient evidence to suggest that you need to make a report to us, you should do so as soon as possible. There are several reasons for this:

• Under the Disciplinary Rules and Procedures, the CLSB has jurisdiction to investigate historic matters only in exceptional circumstances (for example, where it is in the public interest to do so). Notifying us of breaches within a year of becoming aware that a breach may have occurred makes it more likely that we will be able to consider the matter.
• Delays cause memories to fade and documentary evidence to be lost, making it more difficult to determine facts accurately.
• If there is an ongoing breach of our regulatory rules, delays in reporting may cause harm to clients, the public or the administration of justice.

If there is a delay between you obtaining information that suggests our regulatory rules have been breached and you making a report, we will expect you to be able to justify that delay, including justifying the length of any internal investigation that takes place before a report is made.

Telling us about a disclosable event under the Practising Rules does not automatically mean that you will be ineligible for a practising certificate or that we will take disciplinary action against you. Usually, we will ask you for further information or evidence – which will vary depending on the nature of the disclosed event – so we can assess whether any regulatory intervention is necessary.

While in very serious cases a disclosed event might prevent you from obtaining a practising certificate, a more common outcome is for your practising certificate to be made subject to conditions for a period of time. This allows us to monitor your conduct following the event and mitigate any risks to your clients or the public. You can find detailed information about when, how and why we impose practising conditions in our Conditions on Practising Guidance Note in the Costs Lawyer Handbook.

In relation to reporting breaches of our regulatory rules, as explained above we are primarily concerned with taking enforcement action against serious breaches, not those which are merely trivial. Where a report relates to a serious breach over which we have jurisdiction to investigate, we will open an investigation and this may lead to disciplinary action in line with our Disciplinary Rules and Procedures. More information about our enforcement processes and possible outcomes is available on our disciplinary outcomes webpage.

Where appropriate, we will also report to other regulators and authorities, which could include the police where a report includes evidence of a crime.

Under the Code of Conduct, you are required to report potential breaches of our regulatory rules regardless of who is involved, be it your firm, your colleagues or yourself. Reporting your own misconduct could result in disciplinary action being taken against you (see What happens after you report). We understand this might be concerning or daunting, but you must still make the report. Your assistance could be critical in preventing ongoing misconduct or harm to clients and others.

In addition, reporting and subsequently cooperating with us – whether by being open and transparent about your own conduct or being a witness in relation to the conduct of others – is likely to be a mitigating factor that is taken into account in any disciplinary proceedings that arise from your report. We will also take into account contextual mitigation (where evidenced) for your part in any wider misconduct, such as the fact that you were a junior Costs Lawyer at the time, were pressured by senior colleagues, were afraid of reprisals for nonconformity and so on. The presence of mitigating factors may mean that no disciplinary sanction is imposed against you or that an imposed sanction is less severe than it would otherwise have been.

Conversely, if you fail to report breaches of our regulatory rules where it is appropriate to do so, or you help others conceal or prolong misconduct, this will be taken into account as an aggravating factor in determining the appropriate disciplinary outcome to impose. It may also be considered as misconduct in its own right.

For these reasons, it is in both your own interest and the public interest to make a report to us.

More information about mitigating and aggravating factors that are taken into account when determining disciplinary outcomes can be found in our policy statement on enforcement and sanctions. 

Reports and complaints about the professional conduct of a Costs Lawyer working in an organisation regulated by the Solicitors Regulation Authority (SRA) will usually be investigated by the SRA in the first instance, unless there is an urgent issue that requires the CLSB’s attention. Usually, the SRA will keep us abreast of their investigation and inform us of any outcomes, unless they are unable to do so for regulatory or legal reasons.  

If you make a report to the SRA regarding a matter that involves or affects a Costs Lawyer, you should tell the CLSB about it, too. When reporting to us, please mention that a report has also been made to the SRA.

If disciplinary proceedings are commenced against you by the SRA, this is a disclosable event under the Practising Rules. You must tell us as soon as reasonably practicable if an investigation is opened against you, or if you are individually named or implicated in an investigation that is opened against your firm.

It might be convenient for your firm to manage reporting to the CLSB on behalf of multiple Costs Lawyers, if more than one individual is involved in an SRA investigation. This is acceptable to us and we are happy to liaise with your firm. However, if your knowledge or interests depart from those of your firm, you must consider whether you need to report to us independently.

Principle 5.2 of the Code of Conduct provides that you must “notify any other approved regulator, as appropriate, if you reasonably believe there has been a serious breach of their regulatory arrangements by any person regulated by them (including you)”.

An “approved regulator” refers to the legal regulators named in the Legal Services Act 2007 and includes the Solicitors Regulation Authority (SRA) and CILEx Regulation. If you work in an organisation that is regulated by another legal regulator, it is likely that you will be subject to that regulator’s reporting regime, as well as being required by the CLSB to tell that regulator about any breaches of their rules. Guidance on the SRA’s reporting and notification requirements can be found on the SRA website.

In addition, you should be aware of general legislation (i.e. legislation that is not specific to the legal profession) that requires you to report certain information to other bodies or agencies. These include, for example:

• the requirement to make a suspicious activity report to the National Crime Agency pursuant to either the Proceeds of Crime Act 2002 or the Terrorism Act 2000 (for more information, see the Guidance Note on Economic Crime in the Costs Lawyer Handbook);
• the obligation to report a personal data breach to the Information Commissioner’s Office pursuant to the Data Protection Act 2018.

You should also be aware of the following obligations in the Code of Conduct that might be relevant to whether and how you report to the CLSB:

• Principle 5.1: You must be open, honest and co-operate in your dealings with the CLSB, other regulators and the Legal Ombudsman.
• Principle 5.1b: You must respond promptly to any requests from the CLSB with full and accurate information. You must provide the CLSB with access to information and documentation if requested to do so.
• Principle 5.3: You must not take any action to dissuade or prevent anyone from reporting you to the CLSB or Legal Ombudsman, or victimise anyone who has done so.
• Principle 5.4: You must promptly comply with any request, notice or disciplinary outcome issued to you by the CLSB under its regulatory arrangements.