More lawyers have come forward to attack the Solicitors Regulation Authority’s controversial plans to massively increase its fining powers.
The Birmingham Law Society’s professional regulation committee said the SRA’s plans for a new framework were not based on any evidence, were wholly unfair on sanctioned firms and would give almost unchecked powers to the organisation to issue significant fines.
Under the proposals, the SRA would create two extra fining bands and be able to fine firms up to £500,000 - with such decisions approved by 'a senior employee'.
The City of London Law Society has already heavily criticised the SRA plans, saying they are confused, unnecessary and potentially unlawful.
The Birmingham committee said there was no independent element to the process, with the SRA ‘marking its own homework’. Even if respondents took up the SRA’s suggested fall-back option of appealing a decision in the Solicitors Disciplinary Tribunal, this would only involve a review and not a rehearing of the case.
The committee also criticised the SRA’s proposal to calculate much bigger fines based on gross turnover for firms and gross income for individuals.
Committee chair and regulatory specialist Jayne Willetts said: ‘We remain concerned by this “Robin Hood” type approach where fines are calculated according to the financial worth of the firm or individual. A fine is like any other sanction. It must fit the seriousness of the breach.
‘Financial worth is relevant to the ability to pay not to the size of the fine. The use of gross turnover or income (instead of net) for calculation of fines is regarded as another example of unfairness and risks placing practitioners’ livelihoods and their practices in serious jeopardy.
‘Our paramount concern, however, is the lack of independence and external scrutiny within the SRA’s decision-making process. It cannot be just for the SRA to approve fines of up to £500,000 without some semblance of independence.’
The committee of the Birmingham society, which represents around 9,000 members of the legal profession, noted that ‘as per its usual practice’ the SRA had not collected data before consulting.
The response said that the consultation paper was littered with references to fines being a ‘credible deterrent’ but pointed out that more than 90% of individuals and firms are first-time offenders.
‘Most firms and individuals are determined to comply with the rules,’ said the committee. ‘It is damage to reputation and the stress and anxiety associated with SRA investigations that are sufficient deterrents and not higher fines.’
The response pointed out that the SRA’s current fining bands were only introduced in May 2023 and could now be changed without any supporting data.
It continued: ‘In addition, the SRA has failed to consider the impact of higher fines upon small firms, legal aid firms, sole practitioners and those from Black, Asian or minority ethnic groups.
‘Would higher fining levels signal the end of smaller firms and individuals who are prepared to work in the lower paid but vital sections of the legal services market? These are important considerations for the SRA.’
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