SRA fines overhaul “of grave concern” to solicitors

Sexual misconduct: Birmingham Law Society opposes policy on fines

There is “much” in how the Solicitors Regulation Authority (SRA) will implement changes to its fines regime which “should be of grave concern to the profession and is likely to lead to unfairness and arbitrary treatment”, Birmingham Law Society (BLS) has warned.

This included the policy that fines would only in future be appropriate for cases of sexual misconduct, discrimination and harassment in exceptional circumstances.

The SRA can now fine solicitors at traditional law firms £25,000, rather than £2,000 – it could already fine alternative business structures (ABSs) and those working in them up to £250m and £50m respectively.

Other changes planned by the SRA include taking into account the turnover of firms and income of individuals when setting fines and introducing fixed penalties for lower-level breaches.

Responding to the SRA consultation on how it will implement these policies, BLS – the country’s largest local law society, with 5,000 members – said it was “firmly against” the SRA “singling out” cases relating to sexual misconduct, discrimination and harassment as inappropriate for fines, unless there were exceptional circumstances.

“The SRA is pre-judging the sanction before it has considered the facts of the case and the mitigation which seems to us to be the height of unfairness.

“Each case should be determined upon the evidence and an appropriate sanction imposed based upon the facts of each individual case. Cases should not be dealt with upon the basis of political and media opinion.”

BLS described as “perhaps the most concerning of all the proposals in this consultation” a plan to pilot personal impact statements for such cases.

The society said the statement “could contain vitriol and venom”. The response went on: “It could be completely untrue. It would not under the proposal be disclosed to the respondent. It could not therefore be challenged. It is a proposal of the utmost unfairness to the respondent.”

Describing as “unfair” the plan to double the upper limit for fines on law firms to 5% of turnover, BLS said: “A fine imposed upon a successful firm might under these proposals be too high for the seriousness of the breach.

“Similarly, the level of fine imposed upon an unsuccessful firm might be too low for the seriousness of the breach”.

The society was equally opposed to the proposed huge increase in the upper limit on fines for individual solicitors, from £50,000 to £805,000 (those at traditional firms would have to be referred to the Solicitors Disciplinary Tribunal to levy fines at this level).

It objected to the ‘Robin Hood’ principle of increasing fines on wealthy solicitors while reducing them for the less wealthy for the same offence. “Each fine should be appropriate for each offence and not be pre-judged. Affordability is a completely different test to the level of appropriate financial penalty.”

BLS particularly objected to basing fines on gross income, abandoning the current system where solicitors supply a statement of means to the SRA.

The society said the proposal that SRA adjudicators should have sole discretion over whether to hold a hearing was “unfair”, and the proposal that they should interview parties and witnesses as “even more troubling”.

Respondents should be able to request that cases be transferred to the tribunal ab initio so they could be “considered by an independent tribunal as opposed to dealt with in-house by the SRA”.

Jayne Willetts, chair of the BLS consultation committee, said the society welcomed the SRA’s acceptance that “higher fining powers bring with them the need for greater accountability” and acknowledgment that its adjudication function needed to be functionally separate and independent from the investigation process.

“However, this important objective appears to have been overlooked in the proposals for adjudicators to interview witnesses in the absence of the respondent and/or to unilaterally order public hearings.

“There is much in this paper which should be of grave concern to the profession and is likely to lead to unfairness and arbitrary treatment.”

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