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SRA sets out new approach to financial penalties

Safeguards proposed by the Solicitors Regulation Authority (SRA) to increase the transparency and accountability of its enforcement processes do not go far enough, the Law Society of England and Wales have said.

Lubna Shuja, President of the Law Society, said:

“The SRA’s internal fining powers increased from £2,000 to £25,000 in July this year for traditional law firms and solicitors. This means the SRA will decide more cases of alleged misconduct in-house, instead of referring them to the Solicitors Disciplinary Tribunal (SDT).

There needs to be a clearer functional separation of the roles of investigators and adjudicators to maintain the confidence of the profession and the public. Adjudicators, as decision makers, need to be completely independent.

Adjudicators, as SRA employees, have access to the regulator’s records and can see a solicitor’s past regulatory history. This could prejudice their views and could lead to an unfair decision.”

Shuja said this meant recommendations have been made to make the information adjudicators can access be restricted to ensure a fairer process. She continued:

“The SRA also proposes giving adjudicators sole discretion to invite witnesses to be interviewed to test their evidence and credibility. Adjudicators would then be acting as investigators and not decision-makers. The SRA also proposes that a respondent would not be present at such an inquisition. This cannot be fair.

The SRA has not provided the criteria for when or how an adjudicator may exercise such a discretion meaning these proposals are ill-defined and could lead to unfair outcomes.

We have serious concerns that adjudicators would not be acting purely in their capacity as decision makers but would instead be acting as investigators.”

She concluded by stating that the proposed fines for firms of up to 5% of turnovers by the regulator is “excessive and unjustified” and urged the SRA to reconsider in order “to achieve the aims of justice, fairness, transparency, proportionality and consistency”.

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