Compliance officer failures bolster SRA bid for automatic fining powers


Barrass: normal processes not as straightforward

The Solicitors Regulation Authority (SRA) is to seek powers to levy automatic fines for breaches of its rules to avoid a repeat of the embarrassment caused by hundreds of law firms failing to nominate compliance officers on time.

As Legal Futures reported last month, around 750 firms did not meet the 31 July deadline for nominating their compliance officer for legal practice (COLP) and for finance and administration (COFA).

Executive director Samantha Barrass told the SRA’s monthly board meeting yesterday that she was “enormously encouraged” by the fact that more than 90% of firms had complied. But she admitted that existing powers to fine firms for rule breaches only after completing “the normal disciplinary processes” was “not as… straightforward and effective” as an automatic fine would be.

She warned that over the next few weeks, non-complying firms would meet with “a very tough response”. If they did not have COLPs and COFAs in place by 1 January 2013, firms face “revocation of their licence and recognition as well as disciplinary action”.

In answer to a query from board chairman Charles Plant about whether fines could be levied, Ms Barrass said “a capacity to do more automatic administrative fining”, such as you would experience if you did not submit your tax return on time, was “at the top of our shopping list for secondary legislation change”.

Ms Barrass continued that the SRA executive would use the experience of non-compliance with the COLP and COFA rules to “mount a case with the Legal Services Board to give us those powers”. The LSB and the Ministry of Justice were already aware of the SRA’s desire for greater powers, she reported.

Also at the meeting, disappointment was expressed at the small proportion of solicitors who responded to a questionnaire on education and training, presented as part of the ongoing Legal Education and Training Review. Of the total submitted, 29.7% of the responses came from barristers, 27.9% solicitors and 15.9% chartered legal executives.

Lay board member Dr Susan Bews said: “It is an appalling response from solicitors and a very interested response from barristers. What are we not doing with our profession to get them interested that the Bar have done?”

Ms Barrass suggested the figures might be explained by the fact barristers and chartered legal executives were “relatively small groups” compared to solicitors and were therefore “easier to organise and get messages out to”. It was also possible solicitors would contribute to the debate only after “firm regulatory proposals” were on the table after January 2013.

As expected, the board approved a whistleblowing statement setting out the SRA’s approach to receiving information about serious regulatory failure or risk, and a consultation on introducing a leniency scheme.

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