[1]Fenhalls: More regulation will do nothing to address the problem
The Law Society and Bar Council have expressed concern about new economic crime provisions put forward by the government that target the legal profession.
The Law Society is unhappy with the plan laid out [2] in the Economic Crime and Corporate Transparency Bill to remove the £25,000 cap on fines the Solicitors Regulation Authority (SRA) can impose in cases of economic crime.
The Bar Council, meanwhile, spoke out against the bill adding a new regulatory objective to the Legal Services Act 2007, requiring regulators to promote the prevention and detection of economic crime.
The Law Society opposed the recent increase in the SRA’s general fining power from £2,000 to £25,000 – having supported a more modest rise [3] to £5,000 to £7,500.
President I Stephanie Boyce said: “We are concerned about what the proposed additional powers could mean for our members and how effective they will be in combating economic crime.
“We strongly urge the government to consider carefully the proportionality of any further regulation, given that there has been little evidence of the effectiveness or otherwise of the most recent changes to the SRA’s fining powers.
“The proposed unlimited powers would potentially include many more serious or significant cases which currently go before the Solicitors Disciplinary Tribunal and we maintain that this should remain the case.”
The government said the new power would allow the SRA to set “credible fines, particularly for larger law firms” without the “time-consuming and resource intensive” process of sending cases to the Solicitors Disciplinary Tribunal.
The new statutory duty would ensure the frontline regulations to have consistent interpretations of the extent of their duties relating to economic crime, it went on.
But the Bar Council said it “may be incompatible with barristers’ duties and risk confusing the role of lawyers”.
It would require the Bar Standards Board and Legal Services Board to create a “new workstream” at additional cost which may have to be passed onto clients.
“The Bar Council opposes the inclusion of the regulatory objective as it is not the role of legal professionals to prevent or detect crime.
“Although the intention is that the objective does not affect the right to access legal advice and representation, it is unclear how it would be compatible with the role of lawyers in advising or representing their clients…
“The broad-brush approach of a new regulatory objective is unlikely to have an impact on tackling economic crime.”
Bar Council chair Mark Fenhalls KC added: “Tackling economic crime is essential but creating more regulation will do nothing to address the problem.
“The legal professions are already subject to targeted anti-money laundering legislation and a new regulatory objective may not be compatible with our role in representing clients. At worst it sends the wrong message to the general public about the role of lawyers.”