The body representing City lawyers has made an excoriating attack on the Solicitors Regulation Authority’s plans to change its fining powers, calling the proposals arbitrary, inconsistent and unfit for purpose.
The City of London Law Society even suggested that such changes, if approved by the Legal Services Board, could be vulnerable to a challenge by judicial review. Any solicitor or firm subject to these new rules, the CLLS said, would be entitled to raise the lawfulness of the scheme as a defence.
Iain Miller, chair of the CLLS professional rules and regulatory committee which drew up the response to a consultation on the plans, said: 'The more we went into the SRA paper, the more confused it became.
‘It looks as if the SRA has offered a policy without thinking through its ramifications, without a clear grasp of the essentials, and without any proper consideration of the underlying law. We urge the SRA to reconsider its proposals.’
The SRA made the proposals for a new framework of fining powers in preparation for the government potentially granting the regulator unlimited fining powers. This power already exists for misconduct relating to financial crime but the SRA has applied for a wider scope.
The regulator seeks to create two new fining bands for the most serious types of misconduct and minimum fines for each of the resulting six bands.
The minimum fine for the least serious misconduct is set at £5,000 for firms and £2,500 for individuals. For the most serious misconduct, the minimum fine is set at £500,000 for firms and £100,000 for individuals.
The SRA was also consulting on fines based on metrics other than annual domestic turnover or annual income from legal work, and a revised approach to drink-driving convictions.
The CLLS expressed ‘grave concerns’ about the proposed scheme, saying the SRA appeared to have developed it with no regard for those it regulates or the potential impact on those receiving sanctions.
The response said the SRA’s scheme is ‘inconsistent’ with the underlying and well-established common law in relation to the regulation and discipline of solicitors and the way in which this is applied by the Solicitors Disciplinary Tribunal. It was submitted that the SRA had not explained why it considers that its scheme should be different to those principles, and there had been no explanation whether it considered these issues and if so why it chose to reject them.
Colin Passmore, chair of the CLLS, added: ‘The CLLS cannot agree with a policy which so many of our specialist lawyers consider is fundamentally flawed. We cannot see how the SRA can now continue to proceed with its proposed approach. That said, we are more than prepared to work with the SRA to help produce a more sensible and proportionate policy.’
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