SRA seeks greater fining power

The SRA is proposing a major increase in their fining powers and has developed a new fast track system for ‘fixed penalties’ for low-level offenses.

The SRA has begun a consultation on increasing the maximum fine they can issue to law firms from £2,000 to £25,000. In addition, they are also considering taking into account the firm’s income when setting out fines. This will enable the SRA to penalise larger firms up to a limit of 5% of their annual turnover and aligns with some other regulatory bodies. Furthermore, senior equity partners would face much larger fines for breaching rules than junior solicitors for similar rule breaches. Therefore, larger firms and more responsible employees will be punished to a greater extent for breaching the rules.

Finings powers have been an issue with SRA for some time now. The £2,000 limit currently in place means that more serious cases must be dealt with by the Solicitors Disciplinary Tribunal which increases costs significantly. It is argued that raising the limit to £25,000 should significantly reduce costs and speed up the process.

The SRA says that increasing its fining powers for ‘fixed penalties’ would enable them to deal with lower-level misconduct much more easily and effectively. Which would provide them with greater transparency and consistency with how they apply penalties. Solicitors will be able to appeal any decisions made.

Fixed penalties may be suitable in situations where there has been non-compliance with the ombudsman, failure to undertake administrative activity, or breaches where the act is not specific to a certain client or individual.

The SRA will be inviting feedback on the current consultation proposals for the period to 11 February 2022.

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