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Top watchdog to look at SRA’s fining powers

The body that oversees the regulation of legal services in England and Wales has announced plans to review the enforcement and investigative tools available to regulators – including the Solicitors Regulation Authority (SRA).

The Legal Services Board (LSB) said that the review could include increasing financial penalties available to regulators, as well as enabling them to proactively gather information and share intelligence to help them detect and address misconduct.

The board referred to its “long-held view” that existing penalties may not be enough to deter “wilful and serious misconduct” in some areas.

The Law Society of England and Wales has said, however, that it “strongly opposes” any plan to further increase the financial penalties available to the SRA.

Weaknesses

The LSB is already reviewing regulators’ disciplinary and enforcement processes, after its annual assessments identified some weaknesses.

“The LSB will assess the progress made by regulators in addressing these weaknesses as it considers the case for strengthening the enforcement tools available to them,” the body stated.

Under section 69 of the Legal Services Act 2007, the LSB has the power to recommend to the Lord Chancellor changes to the functions of legal-services regulators – including the level of financial penalty that can be applied when misconduct has been identified and established.

The LSB said that its review was being carried out with a view to framing, subject to statutory process and consultation, “an appropriate recommendation”.

Effective tools

Alan Kershaw (chair of the LSB) said: “The public rightly expects that lawyers in England and Wales will uphold the highest professional standards and ethical conduct.

“For some time, we have been concerned that a lack of effective fining powers among some regulators, particularly the Solicitors Regulation Authority, may hamper their ability to tackle wilful and serious misconduct,” he continued.

Kershaw added that, while the board wanted to ensure that regulators had the most effective tools available to identify and deal with misconduct, it also needed to have confidence that enforcement processes were fair, transparent and timely.

The British Government is working on legislation to significantly increase the maximum penalty the SRA can impose in relation to economic crime, but the highest penalty for other types of misconduct remains at €25,000.

Risk of ‘undermining’ SDT

The Law Society of England and Wales President Lubna Shuja said that there was “no evidence” that the SRA’s current fining powers were insufficient, adding that they had already increased recently.

She pointed out that more serious matters were referred to the Solicitors Disciplinary Tribunal (SDT), which already had “draconian powers” to sanction any wrongdoing in the profession.

“The SDT remains the appropriate forum for serious cases of alleged misconduct. It is independent from the regulator and has clearly defined processes,” Shuja stated.

“Further extending the SRA’s powers risks undermining the SDT’s role and authority, and potentially reducing the sanctions imposed on bad conduct,” she added.

Shuja said that the request appeared to be “a kneejerk reaction” to a recent media investigation into a very small number of solicitors.