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SRA’s ‘unfair’ fining powers worry solicitors

The Law Society of England and Wales has said that a plan to link new fining powers to firms’ and individuals’ income will lead to penalties that are neither fair nor reliable.

The Solicitors Regulation Authority (SRA) unveiled proposals in August to raise the maximum fine it could impose on firms to 5% of turnover.

The SRA also wants to take the means of solicitors into account when setting a fine, and has created a table of bands for punishments that can be issued.

According to the Law Society Gazette of England and Wales, this would mean that the lowest level of offence would incur a basic proposed penalty of 2% of income.

This would rise, however, to 161% for misconduct considered the most serious.

In theory, the Gazette says, this would mean that a solicitor earning £500,000 could be fined as much as £805,000 in the most serious cases.

‘No new evidence’

Consultation on the new policy – announced shortly after the SRA increased its maximum fining powers from £2,000 to £25,000 – closed this week.

The society said that the SRA had produced no new evidence to support its proposals, and suggested that fining firms up to 5% of their turnover was both “excessive and unjustified”, and would provide no extra deterrent.

The organisation also argued that annual turnover was not a reliable indicator of profitability, and did not always demonstrate ready availability of cash.

Transparency concerns

The solicitors’ body criticised the proposal to take account of individuals’ income, saying that it took no account of financial responsibilities.

“We firmly believe that it would be unfair for the SRA not to make any inquiry about an individual’s means, and thereby the real affordability to pay any fine imposed by the SRA,” it stated.

The society has further concerns about the process for issuing fines, and the transparency and accountability of the SRA enforcement procedure, according to the Gazette.

It was submitted that adjudicators, as SRA employees, would have access to the regulator’s records, and could see a solicitor’s past history, which could lead to an unfair decision.