The Law Society has expressed significant concerns over the Solicitors Regulation Authority’s (SRA) proposals to overhaul its fining framework, branding the plan as “potentially unlawful, confusing and flawed.”
Richard Atkinson, Vice-President of the Law Society, has cautioned that the proposed hefty fines could potentially force legal aid firms to close, leading to the emergence of more “legal aid deserts”. This adds the Law Society’s voice to the growing opposition, including the City of London Law Society and Birmingham Law Society, against these plans.
The central criticism from the Law Society centres on the potential undermining of the Solicitors Disciplinary Tribunal (SDT), which currently possesses the authority to impose unlimited fines. The society argues that the SRA’s proposed changes lack sufficient rationale and could render the SDT’s role obsolete.
Concerns also focus on the SRA’s approach of a ‘one size fits all’ fining scheme. The Law Society advocates for a differentiated framework for economic crimes, especially since the previous government had granted the SRA unlimited fining powers in such cases, while maintaining a cap of £25,000 for other types of misconduct. Meanwhile, alternative business structures face a separate cap of £250 million, with £50 million for individuals.
The Law Society also questions the justification for and evidence supporting the proposed increases in fines, especially as they were set only recently. It argues that higher fines may not act as a credible deterrent or maintain public trust, pointing out the lack of empirical evidence from the SRA to substantiate this.
The society challenges the premise of linking fines to the gross income of law firms and individuals, stating that income does not necessarily reflect profitability or liquidity, especially in smaller firms or those dependent on legal aid. This questioning extends to the idea of using international turnover or income from non-legal work to determine fines, which the Law Society believes may fall outside the regulator’s remit.
Further apprehensions include the potential for unjustified inflation in fine levels, which might jeopardise the economic viability of firms, impacting their ability to practise. The Law Society echoes Birmingham’s concerns about decision-making independence and transparency, stressing the need for an independent process allowing solicitors and firms to contest SRA decisions effectively.
The Law Society insists that all serious misconduct cases should be referred to the SDT, which can impose a wider range of sanctions. It disputes the SRA’s view that fewer referrals to the SDT is beneficial, suggesting that smaller firms and BAME solicitors might be more likely to settle due to financial constraints, potentially compromising fairness.
Finally, the Law Society calls for external and independent oversight of all SRA decisions, arguing that current safeguards like the right to appeal to the SDT are “seriously constrained” due to limited grounds of appeal. Richard Atkinson asserts the Law Society’s unwavering opposition to the SRA’s expansion of its fining capabilities, criticising the proposals as unfair and potentially devastating for smaller firms.
The Law Society maintains a firm stance against the SRA’s proposed fining regime, calling for a re-evaluation of its framework to prevent potentially adverse impacts on law firms and ensure justice and transparency in regulatory processes.
