The Solicitors Regulation Authority (SRA) will be given new powers to fine rule-breakers up to £25,000, under measures introduced yesterday (29 June 2022).
The changes mean the SRA can now fine law firms and individual solicitors for a broader range of offences – from lower-level cases involving inadequate staff training to those with more serious consequences including failure to implement the appropriate checks required to uncover signs of money laundering by clients.
Previously, disciplinary matters requiring fines over £2,000 would be referred to the independent Solicitors Disciplinary Tribunal (SDT).
Given nearly 90% of fines currently issued by the tribunal are under £25,000, these reforms will allow them to focus on fewer, more significant allegations, like firms working for sanctioned Russian oligarchs and businesses.
Deputy Prime Minister, Lord Chancellor and Secretary of State for Justice, Dominic Raab said:
“The UK can be proud of our world-leading legal services. But it is essential the sector retains its international reputation for the highest standards of probity.
That’s why we are allowing swifter and firmer action to be taken against those who break the codes of conduct. And we’re freeing up the solicitors’ disciplinary tribunal to focus on the most serious breaches, such as those involving Russian sanctions.”
The increased powers will reduce the number of cases referred to the SDT, shortening the average time taken for cases to be resolved.
Anna Bradley, Chair of the Solicitors Regulation Authority, said:
“The overwhelming majority of solicitors meet the standards we all expect, but when they don’t, we step in to protect the public and maintain confidence in the profession.
There was strong public support for increasing our fining powers when we consulted last year and this change will mean we can resolve issues more quickly, saving time and cost for everyone. It will reduce stress and allow more focus on the most complex and challenging or serious cases.”
The SRA investigates almost 2,000 cases annually and handed out over 250 fines in the last year, which is only set to increase as the changes take effect. They will continue to refer firms and solicitors to the tribunal in the most serious cases.
Commenting on the change, Law Society of England and Wales vice president Lubna Shuja said:
“The Ministry of Justice (MoJ) has agreed a disproportionate 1,150% increase in the Solicitors Regulation Authority’s (SRA) fining powers from £2,000 to £25,000 and ignored the majority views of opposition expressed in response to the SRA’s consultation on the matter.
We remain concerned about the lack of independence within the SRA between decision makers and prosecutors, as well as the lack of transparency around SRA decisions. We do not think that the right of appeal to the Solicitors Disciplinary Tribunal (SDT) is an adequate safeguard.
We staunchly opposed this increase in fining powers and lobbied the MoJ to reconsider its position, however, it has decided to forge ahead.
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, has adequate safeguards and much greater powers – including the ability to impose fines and strike-off a solicitor.
We will monitor the impact of the increased fining powers to ensure regulation is proportionate and effective.”
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