SRA's increased fining powers have real-world effect

The Gazette recently reported that the Solicitors Regulation Authority (SRA) will exercise its power to hold its own public hearings to decide whether a firm or solicitor has committed misconduct. This is not a new power.

Previously there were no major concerns about this as the regulator had low fining powers, up to a maximum of £2,000.

More serious and complex matters were referred to the independent Solicitors Disciplinary Tribunal (SDT).

The SRA consulted on proposals to increase its fining powers for firms and individuals from £2,000 to £25,000 last year. The Law Society strongly opposed the SRA’s fining powers being increased to £25,000. We raised concerns about how and when the regulator would exercise the new fining powers if granted.

Despite our opposition, last July the Ministry of Justice raised the SRA’s fining powers to the maximum proposed.

Greater concerns have been raised due to the Economic Crime and Corporate Transparency Bill. The bill includes further scope for the SRA to issue unlimited fines against solicitors and firms caught up in economic crime.

While there is an internal separation between the SRA’s investigation and adjudication functions, there is unease about the reality of that separation and the independence of those carrying out these functions within the SRA.

In our consultation response we raised concerns about the SRA acting as investigator, prosecutor and judge.

We are seriously concerned about the wide discretion afforded to adjudicators when deciding whether or not to hold hearings or interview witnesses.

We remain apprehensive about the unsatisfactory functional separation between SRA investigators and adjudicators. We consider the SRA’s proposed safeguards do not go far enough.

The regulator has sought to allay these fears by stating that such powers would only be used in ‘rare’ cases.

In our consultation response, we sought more information on what criteria adjudicators would use to decide what would be heard in public.

We also argued that the legally qualified member of the adjudication panel should be the chair of the panel.

We maintain that the SDT remains the most appropriate jurisdiction for more serious and complex matters and those that may involve higher fines. It guarantees independence, transparency, objectivity, adequate safeguards and has much greater powers – including the ability to impose fines and strike off a solicitor.

How we’re helping our members

If a solicitor is facing disciplinary action, they can contact the Law Society’s Practice Advice Service to access free and confidential advice.

If a member needs legal advice, then we advise that they contact the Solicitors Assistance Scheme (SAS).

The SAS has a panel of regulatory/disciplinary specialists who can give up to an hour’s worth of free legal advice by phone.

Firms can also consider taking out Directors’ and Officers’ (D&O) insurance, to cover partners for legal costs in disciplinary proceedings.

We also regularly publish articles on how our members can adhere to their professional obligations.

Lubna Shuja is president of the Law Society of England and Wales

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