SRA issues first fixed penalty fine for compliance officer rule breach

SRA: Firms given chance to comply

A law firm in the North-East has become the first to receive a fixed penalty fine for not updating the Solicitors Regulation Authority (SRA) on information about a compliance officer.

It follows the first £750 fines handed out to firms for failing to comply with the transparency rules and the first for a law firm’s failure to submit its workforce diversity data within the deadline.

Firms must promptly notify the SRA if they become aware of any material changes to information previously provided, by them or on their behalf, about their compliance officers.

Hathaways Law in Gateshead failed to do this in relation to its compliance officer for finance & administration, in breach of paragraph 3.8(a) of the Code of Conduct for Firms.

“The firm failed to remedy this breach after being given notice and reasonable time in which to do so,” the SRA said in a notice published yesterday.

Under the fixed penalty regime, a second breach within three years triggers a £1,500 fine.

The SRA this week trumpeted the new system, which applies to a small number of lower-level breaches of its rules. It published on the Solicitors Register details of £750 fines issued to eight more firms for not complying with the transparency rules, and four more for diversity data failures.

The SRA stressed that it first sent firms notices of potential fines, with the opportunity to put the issue right. “In many cases, the threat of penalties is resulting in firms becoming compliant,” it said.

Chief executive Paul Philip said: “We brought in fixed penalties so we could deal with non-complex breaches of our rules more swiftly. That saves everyone time, cost and stress.

“We are here to promote the public interest and it’s essential firms comply with our transparency rules. They help people compare law firms’ services and make informed choices. Those firms that are publishing the correct information rightly expect that we will take action against those who don’t.

“Similarly, collecting diversity data helps everyone… Firms’ diversity data not only helps us understand the progress the sector is making, but enables firms to benchmark themselves against others. Providing that data is not difficult to do, but it is a regulatory requirement.”

The other area where the SRA can issue fixed penalties is a failure to respond to requests to complete mandatory anti-money laundering data. This has seen “a resultant increase in compliance”, it said.

The regulator is set to consult this year on fixed penalties for minor anti-money laundering system and control failings, although the amount of the fine could be higher.

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