Law Society SIF

Law Society: SRA proposal to increase fines “not appropriate”

The Law Society have warned that a proposal by the Solicitors Regulation Authority (SRA) to hike its own fining powers from £2,000 to £25,000 is not appropriate.

In November, the Law Society sought consultation on three proposals: to increase their maximum fining power from £2,000 to £25,000; to take into account the turnover or income of firms and individuals when setting fines; and to introduce a schedule of “fixed penalties” of up to £1,500 to enable lesser issues to be dealt with more easily.

The first element of their proposals has today triggered condemnation from the Law Society, both in terms of the monetary increase and the integrity of the process. In response to the proposal, Law Society of England and Wales president I. Stephanie Boyce said:

Increasing the SRA’s fining powers by more than 12 times the current limit is not appropriate.

The proposed substantial increase to the threshold would potentially include many more serious or significant cases which currently go before the SDT and where full reasons for its decisions are transparently set out in written judgements and published on the Solicitors Disciplinary Tribunal (SDT) website.

Our members have concerns about the SRA acting as investigator, prosecutor and judge without independent scrutiny.

We suggest a more appropriate rise – based on statistical data from the SDT – would be somewhere between £5,000 to £7,500, based on analysis of previous fines imposed over the last three years.”

Moreover, further concerns were raised with regard to the fixed penalty regime that has been proposed to deal with lower-level breaches of the SRA rules or non-compliance with its administrative requirements or failure to respond to requests. Boyce continued:

There is insufficient information on this to be able to comment fully, however we have concerns about the administrative exercise in introducing such a model and the costs involved in setting it up when it isn’t clear what the benefits are.”

Boyce did, however, concede:

We appreciate that increasing its internal fining threshold moderately would assist the SRA in making decisions in a greater number of straight forward cases, which is likely to speed up the process as fewer cases would be transferred to the SDT, saving costs and reducing stress for all parties concerned.”

The SRA is also proposing rigid rules to deal with discrimination, harassment and sexual misconduct cases. Boyce commented:

It is right that discrimination, sexual misconduct and harassment within the profession should be treated with the utmost seriousness.

The behaviours covered under these broad and distinct categories can vary substantially and can arise in a wide range of circumstances. As such, decision-makers should have flexibility to look across the full range of possible penalties in deciding how to proceed, including imposing a financial penalty.

All sanctions should be available to a tribunal or court to ensure that cases are dealt with fairly and proportionately. The regulator cannot restrict the powers of a tribunal or court.

We believe any fining framework should be fair, transparent, proportionate and consistent and be a deterrent to firms and individuals from committing breaches under the SRA Codes of Conduct.”

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