Guidance has been published on how solicitors can best deal with the risks associated with accepting undertakings given by corporate entities such as companies and limited liability partnerships (LLPs), which are regulated by the Solicitors Regulation Authority (SRA) and others.
This issue was highlighted in the case of Harcus Sinclair LLP v Your Lawyers Ltd (2021) where it was noted that the courts do not have the same power to enforce undertakings against corporate entities, as they do against individual solicitors, who are officers of the court.
Many practitioners mistakenly assumed that undertakings given by corporate entities could be enforced under the supervisory jurisdiction of the court – in the same way as an undertaking given by a solicitor, either personally, or on behalf of an unincorporated partnership. This is not a new issue, as incorporated entities have been around for a long time.
Although not subject to the court’s inherent jurisdiction, corporate entities are nonetheless bound by SRA regulations. A breach of an undertaking could lead to a fine or imposition of sanctions by the SRA or the Solicitors Disciplinary Tribunal.