The SRA has opened a consultation on an increase in the maximum fine it can issue to law firms and for a new fast-track system for “fixed penalty” low level offences.
The current maximum fine that the SRA can issue is £2,000 and they are seeking to increase this to £25,000. The level of fine would, for the first time, take into account the firm’s income when determining the level of fine which could mean bigger fines for bigger firms, up to a limit of 5% of annual turnover.
The fast track system would allow for fixed penalties of up to £1,500 for low level offences that can be dealt with more efficiently. This might include non-compliance with the decision of the Ombudsman, failure to undertake an administrative activity or a breach which is not attributed to a specific client or individual.
The SRA is also seeking a proposal that fines no longer be imposed for sexual misconduct and discrimination on the basis they are an inappropriate sanction for such offences and will always need to be referred to the SDT.
The Solicitors Disciplinary Tribunal’s (SDT’s) response
The SDT in its response to the proposals have warned that fairness and transparency would be lost if the SRA goes ahead with its increase in fines. As SRA decisions are made without public scrutiny, it would erode transparency in the way that cases are dealt with. It has recommended that the SRA’s fining powers should be limited to £7,000 for an individual and considers that the power to fine up to £25,000 would mean that individuals with limited resources might feel compelled to agree to accept an SRA fine simply to avoid proceedings, even if the allegations are disputed. Similarly, larger firms may agree to an SRA fine to avoid the scrutiny of public proceedings.
The SDT also questions the SRA’s position that its proposals will speed up proceedings. The SDT points out that 96% of cases were listed for a substantive hearing within six months of issue and 70% of cases were determined.
The SRA’s current fine limit of £2,000 has inevitably led to more cases being transferred to the SDT and has seen with it delays in resolving cases, an increase in costs and stress and anxiety for those subject to disciplinary proceedings. If it is increased even to £7,000 as suggested by
the SDT it may reduce stress and anxiety by avoiding a hearing but the big question is whether these proposals will reduce the delay if more responsibility is placed at the SRA’s door as it is an organisation well known for its delay.
