The Solicitors Regulation Authority has unveiled a new financial penalties regime designed to remain 'fit for purpose' should the government grant its request for greater powers.
The SRA decided to update its regime after being granted unlimited fining powers for misconduct relating to financial crime.
The SRA's consultation document, published on Friday, says: ‘We have made representations to government to grant us unlimited fining powers in relation to all breaches of our rules. We believe that this would enable us to more effectively deter serious wrongdoing, particularly by firms and individuals of greater financial means. We believe the changes to our fining framework proposed in this consultation will make sure it remains fit for purpose if our powers are increased.'
The new regime features two new fining bands. The consultation document says many cases falling in new bands E and F are likely to be serious misconduct involving economic crime.
Penalties for cases falling in band E range from 6%-10% of a firm's annual domestic turnover and 113%-145% of an individual's annual gross income. Band F begins at 11% for firms and 146% for individuals.
The SRA wants to introduce minimum fines for each penalty band, as it believes some fines currently imposed are not high enough to serve as a credible deterrent. 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 is 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.
SRA chief executive Paul Philip said: 'The majority of solicitors do a good job. However, when this it not the case, it is important that we have a robust approach in place which enables us to take action in a way that is fair, transparent and consistent to all. The changes we are proposing will help to ensure we can continue to do that, including for the most serious cases, which by their very nature can and will attract the most significant penalties.’
The consultation closes on 20 September.
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