The CEO of the SRA has said law firms must learn to self-regulate to avoid potentially huge fines for solicitor misconduct.

The solicitors regulator appealed earlier this year for unlimited fining powers against individuals and firms.

The request was made in the context of a newspaper sting involving immigration lawyers, but the SRA made clear today that wider powers would be applied in a much broader range of cases.

And chief executive Paul Philip, speaking at the SRA compliance conference today in Birmingham, stressed that partners must be aware they could face stiff penalties where solicitors they are supposed to be supervising have committed misconduct.

‘Where we find people doing the types of things you shouldn’t be doing, I truly believe they should face personal accountability but also the partners in that firm must take some responsibility for self-regulation,’ Philip told delegates.

‘The types of people who know who the bad lawyers are are you [compliance officers]. I would like to try and instil some degree of self-regulation and I would like to use fines to do that.’

Philip said the Economic and Financial Crime Bill should come into law in the coming months, which will pave the way for the SRA to issue unlimited fines in relation to financial crime. But he insisted this would not be the end of the regulator’s bid for more clout.

‘You will see very significant fines coming forward [for economic crime misconduct] and if I have my way for all sorts of misdemeanours going forward.’

The Legal Services Board, the oversight regulator, has already announced plans to review the tools available to the SRA, suggesting that existing penalties ‘may be insufficient to deter wilful and serious misconduct’.

Currently any case where the fine is higher than £25,000 is referred to the Solicitors Disciplinary Tribunal, but the SRA says that this process takes too long and in particular does not address any systemic issues in firms which may have allowed or caused the misconduct.

Responding to Philip's comments, Law Society president Nick Emmerson said: 'It is important for any solicitor who has committed serious misconduct to be dealt with swiftly. The SRA has implied that solicitors could possibly face unlimited fines by the regulator for all sorts of misdemeanours going forward. However, the regulator fails to present a compelling argument for such a change.

'Unlimited fines can already be imposed via the independent and ultimate arbiter, the Solicitors Disciplinary Tribunal (SDT), which was established to deal with the most serious cases of misconduct.

'We are concerned that through its proposals the SRA could become the investigator, prosecutor and judge, potentially undermining the independence and transparency of the current SDT process which has the confidence of the profession and the public.'

 

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