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Super-regulator backs campaign for higher penalties
7 August 2023

Hard on the heels of the Solicitors Regulation Authority’s call for unlimited fining powers, oversight regulator the Legal Services Board today announced plans to review the enforcement and investigative tools available to frontline regulators. ‘This could include increasing financial penalties available to regulators, as well as enabling regulators to proactively gather information and share intelligence to help them detect and address misconduct,’ the announcement said.

The Law Society said it strongly opposed any increase in financial penalties available to the SRA.

According to the super-regulator, the review ‘is in response to the LSB’s long-held view that existing penalties may be insufficient to deter wilful and serious misconduct in some areas’. 

Under section 69 of the Legal Services Act, the LSB has the power to recommend to the lord chancellor changes to the functions of legal services regulators, including in relation to the level of financial penalty that can be applied in cases of misconduct. The LSB’s review is being carried out with a view to framing, subject to statutory process and consultation, an appropriate recommendation, the announcement said. 

Alan Kershaw, LSB chair, said: ‘The public rightly expects that lawyers in England and Wales will uphold the highest professional standards and ethical conduct. For some time, we have been concerned that a lack of effective fining powers among some regulators, particularly the Solicitors Regulation Authority, may hamper their ability to tackle wilful and serious misconduct. We are anxious to ensure that regulators have the most effective tools available to identify and deal with such misconduct. 

‘At the same time, the LSB needs to have confidence that first class enforcement powers are accompanied by first class enforcement processes that are fair, transparent and timely. 

‘We will address these issues to help build public trust and confidence in legal services – an objective we hope everyone will get behind.’

Responding to the announcement, Law Society president Lubna Shuja said: ‘The SRA’s power to discipline and fine solicitors who commit misconduct was increased very recently. More serious matters continue to be referred to the Solicitors Disciplinary Tribunal. There is no evidence that the SRA’s current fining powers are insufficient.

‘The SRA does not exist on its own in the regulatory process. It sits alongside the SDT, which already has draconian powers to sanction any wrong-doing in the solicitors’ profession. These include not only fining powers but also the ability to remove a solicitor from the profession altogether.’

Shuja said that the SDT remains the appropriate forum for serious cases of alleged misconduct. ‘It is independent from the regulator and has clearly defined processes. This transparency means that solicitors, clients, and the general public can have confidence in the SDT’s decision making processes. Further extending the SRA’s powers risks undermining the SDT’s role and authority and potentially reducing the sanctions imposed on bad conduct.’

She concluded: ‘We strongly oppose any proposals to further increase the current financial penalties available to the SRA. This request appears to be a knee jerk reaction to the recent media investigation into a very small number of solicitors, who have been quickly dealt with by way of interim measures while their cases are properly considered.’

Source: The Law Society Gazette, 4th August 2023

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