News and information from the world of
regulatory compliance and risk management

SRA to boost fining powers by over 1,000% to £25k
24 May 2022

Plans to increase the regulator’s fining powers from £2,000 to £25,000 are to go ahead, the Solicitors Regulation  announced today. A new system of ‘fixed penalties’ for lower-level breaches will also be introduced, enabling cases such as administrative failings to be dealt with more quickly.

The changes will reduce the number of cases passed onto the Solicitors Disciplinary Tribunal as the SRA keeps work in-house.

The regulator received 39 formal responses to a consultation on its proposals, as well as engaging with 7,500 people through focus groups, surveys, polls, emails in informal comment and questions, and claims the majority were ‘broadly in favour of the principles’ outlined, although there were differing views on how the proposals would be implemented.

The SRA will, for the first time, take into account the turnover of firms and the financial means of individuals when setting fines – in theory offering scope to hit City firms and lawyers harder when they breach the rules.

Guidance will also be amended to dictate that cases finding sexual misconduct, discrimination or any other form of harassment must result in a suspension or strike-off rather than a fine, barring exceptional circumstances.

Anna Bradley, SRA chair, said: ‘The overwhelming majority of solicitors meet the standards we all expect, but when they don’t, we step in to protect the public and maintain confidence in the profession. These changes will mean we can resolve issues more quickly, saving time and cost for everyone and, importantly, reducing the inevitable stress for those in our enforcement processes.

‘It was good to see broad support for our proposals, as well as getting feedback that has helped us refine our approach. It is vital that everyone can be confident that our approach is fair and transparent.’

A further consultation will be held later this year to ask about how a fixed-penalty regime would work and what breaches it will cover.

The SRA is also currently in the middle of another consultation about how it publishes decision notices and what information it shares. This will take on greater significance once fining powers are increased, as the SDT usually provides greater detail than the SRA when it publishes judgments.

On the increase in fining powers, the SRA said cases with fines under £25,000 tend to be straightforward matters which do not merit the time, cost and stress involved in a hearing before the SDT.

Fines are imposed by adjudicators who have not been involved with the investigation of a case and who may sit on two or three-member panels. The SRA said it will monitor and evaluate the impact of any new approach on different groups, notably older solicitors, men, and those from minority ethnic backgrounds, all of who are over-represented in enforcement processes.

The Law Society, which had argued for the SRA to have the power to issue fines up to £7,500, said it was disappointed with the decision to press on with the original proposals.

A spokesperson: ‘We remain of the view that increasing the SRA’s fining powers by more than 12 times the current limit (representing an increase of 1150%) isn’t appropriate, and our members have concerns about the SRA acting as investigator, prosecutor and judge, in potentially many more serious and significant cases which currently go before the SDT.

‘The independence of the SDT from both the regulator and the profession, as well as its as clearly defined processes and transparency means that solicitors generally have more confidence in the SDT’s decision-making processes.’

Solicitors and firms will retain the right of appeal to the SDT but the Society said this was not an adequate safeguard.

The spokesperson added: ‘Many firms and individuals faced with challenging an adverse decision from the SRA would find the prospect of an appeal (and the associated costs of appealing) daunting. A solicitor facing an SRA investigation has to be aware of the high likelihood that they will bear the regulator’s costs as well as their own.’

Source: The Law Society Gazette, 23rd May 2022

read more articles