Huge fines show SRA is misusing its powers

In 2022, I wrote an article in this magazine about the demise of a fair disciplinary system for solicitors. The Solicitors Regulation Authority had just been granted an enhanced statutory power to fine solicitors without having to go through the irritating process of having to persuade the independent and impartial Solicitors Disciplinary Tribunal of the rightness of its cause. Instead, the SRA was in the blissful position of being prosecutor, judge and jury in its own cause. I drew attention to this, but nothing happened.

Over the last fortnight or so, two astonishing decisions have shown how the SRA now uses (or more accurately misuses) the wide-ranging powers to which I drew attention. A Farrer & Co solicitor was ordered to pay £10,105.44 (note the spurious precision in the figure) and £300 costs after he was disqualified for 22 months for driving when his alcohol level was above the legal limit. He had been ordered by magistrates to pay around £2,000 by way of fine, costs and victim surcharge: the fine itself was £1,348.

I was unable to understand upon what logical basis such an enormous fine – seven and a half times that imposed by the criminal court – had been imposed by his regulator. But within a week, that sanction was surpassed by the fine issued to the director of a Lincolnshire firm. In November 2022 he pleaded guilty to driving a car while under the influence and was disqualified for 19 months. He was fined £437 and ordered to pay £85 costs by the magistrates. He was then fined a further £13,836 by the SRA, more than 31 times the fine imposed by magistrates. He also agreed to pay £1,350 costs.

What justification can there be for such swingeing penalties? The principal purpose of regulatory sanctions, as set out in Sir Thomas Bingham MR’s seminal judgment in Bolton v Law Society [1994] QB 912, is to protect the reputation of the profession. Plainly, the reputation of the profession suffers when a solicitor is convicted of offences of dishonesty, or serious sexual or violent offences: in those circumstances the solicitor must expect additional sanctions from the regulator. But damage to the profession is only slight and tangential where a solicitor is convicted of drink-driving, provided that there is no associated injury or death. Where there is injury or death, a sentence of imprisonment may well result, and a robust regulatory response is plainly justified.

If there were a sensible justification for these huge fines, one would expect to see similar penalties being imposed upon regulated professionals in other professions for similar offences. But one looks in vain for that. There is no power to fine healthcare professionals, so unless a criminal offence calls into question the professional’s fitness to practise, regulatory proceedings will not be commenced. Although there is a power to fine accountants, I have seen reports online that such professionals have been dealt with by fixed penalties (ie, reprimands and the like) for drink-driving offences.

The closest comparators for solicitors are barristers. In April 2022, a barrister, LR, was fined £1,513 and disqualified for 17 months by a magistrates’ court, for driving when the amount of alcohol in his breath was twice the legal limit. By consent, he was fined £1,000 by the Bar Standards Board. That seems to me to be an eminently sensible and proportionate sanction. It might be thought that bearing in mind the centrality of barristers in their role as advocates to the administration of justice, that a drink-driving conviction for a barrister damages the reputation of the profession more than an equivalent conviction of a solicitor damages the reputation of the solicitors’ profession. Tens of thousands of solicitors work on non-contentious matters and never go anywhere near a courtroom.

So why are solicitors being singled out? The lack of proportion is the result of the SRA’s arithmetical approach to fines developed by the authority, which is entirely different to the approach taken by the SDT. The SRA calculated in the case of the Lincolnshire director that the ‘basic penalty’ within the relevant band should be £17,295.26 (note again the spurious precision), and this figure was then discounted by 20% to reflect cooperation, remorse and so on. Yet this formulaic approach produced a ridiculous result arising from a disproportionately inflated ‘basic penalty’, which ignored and treated as irrelevant the actual penalty imposed by the criminal court.

The imposition of a penal sanction should not be the result of tapping figures into a calculator, but rather the product of careful and mature human judgement, by which the decision-maker balances the basic facts of the offence, and the aggravating and mitigating circumstances. There is no way that the SDT would have imposed such a swingeing penalty for an offence which only tangentially affected the reputation of the profession. On a daily basis one sees far lower fines imposed by the SDT (and indeed by the SRA) for serious breaches of the Accounts Rules, conflicts of interest and the like – disciplinary offences which directly tarnish the reputation of the profession.

The solicitors’ profession is now saddled with a thoroughly unfair twin-track system by which both the SRA and the SDT have separate powers to fine solicitors, and exercise their powers in completely different ways. The SRA approach produces much higher penalties than that of the SDT, yet it is the SDT which has decades of experience, buttressed by the intervention of the High Court when solicitors exercise their untrammelled right of appeal to it.

The SRA has radically increased its regulatory powers since its creation in 2007, with no corresponding increase in accountability. I would like to see the Law Society becoming involved on the side of those of its members who fall foul of this new style of regulation.

In the meantime, solicitors would be well advised to recall the TV adverts from the 1960s: ‘Don’t ask a person to drink and drive.’

Gregory Treverton-Jones of 39 Essex Chambers specialises in regulatory and disciplinary issues concerning legal professionals. He has co‑authored successive editions of The Solicitor’s Handbook. The Solicitor's Handbook 2024 will be published in March