The Law Society of England and Wales has warned that solicitors in the jurisdiction could be made bankrupt without proper oversight or scrutiny if the Solicitors Regulation Authority (SRA) is allowed to go ahead with a massive increase in its fining powers.

The Law Society Gazette of England and Wales has described the organisation’s latest comments as the “third high-profile rebuke” of the SRA’s financial-penalty proposals.

The society has described the planned changes as “potentially unlawful, confusing, flawed, and inconsistent with the Legal Services Act”.

The plans, it added in a consultation response, also undermined the role and authority of the Solicitors Disciplinary Tribunal “without rationale”.

New bands

According to the Gazette, the SRA wants to add two new fining bands to its existing scheme, and to have the powers to fine firms up to Stg £500,000 and individuals up to £100,000.

Band E would range from 6% to 10% of a firm’s annual domestic turnover, and 113% to 145% of an individual’s income. Band F would be for fines higher than these percentages and would be applied only for the most serious misconduct.

New minimum fine levels would be introduced for all existing bands.

Safeguards ‘inadequate’

Law Society vice-president Richard Atkinson said that the proposed safeguards and monitoring processes were inadequate, and appeared to violate the principles of open justice and decision-making.

All fines in the top two bands would have to be approved by a senior member of the SRA, although the decision-making process would not be open to public scrutiny in the same way as SDT hearings.

The SRA has said that changes are needed to take account of its new unlimited fining power for cases of economic crime.