Norris: SRA striving for transparency and predictability
The Solicitors Regulation Authority (SRA) risks acting “unfairly and arbitrarily” if it refers almost all cases relating to sexual misconduct to the Solicitors Disciplinary Tribunal (SDT), a leading regulatory lawyer has warned.
Julie Norris, partner at City firm Kingsley Napley, said some sexual misconduct cases were serious and “some are not”, and the SRA needed to retain a “really good measure of discretion” over whether to refer them to the tribunal.
Earlier this year, the SRA decided that fines would only in future be appropriate for cases of sexual misconduct, discrimination and harassment in exceptional circumstances.
In a consultation on the detail issued in August, said this proviso might include cases where the complaint has arisen due to “inappropriate or insensitive behaviour” but the SRA was satisfied there was no ongoing risk.
“This is likely to reflect a one-off incident or remark that is poorly judged but not ill-motivated,” it said.
Speaking on a Kingsley Napley webinar on the consultation, Ms Norris said the exceptions were “really narrowly cast”.
Fines might be suitable where a law firm’s systems or processes relating to sexual misconduct, discrimination or harassment were at fault, but any “serious failures at leadership level” would have to go to the SDT.
Ms Norris said she could “well understand” that the SRA was “striving” for transparency and predictability, “which we all are desperate for”.
However, she said: “In doing so, one wonders the extent to which there is a risk, in failing to look at the facts of each matter, that the SRA might be acting unfairly and arbitrarily by having to comply with almost mandatory referrals”.
Ms Norris went on: “Some sexual misconduct cases are serious and some are not. There needs to be retained by the SRA a really good measure of discretion.”
Earlier in the session, fellow partner Iain Miller warned that the SRA was proposing big increases in fines, with those for individual solicitors linked to income rather than the seriousness of the offence, and the turnover multiplier for firms increased from 2.5% to 5%.
Mr Miller said the SRA “does not think it is fining at the same level as other regulators… we are going to see much bigger fines”.
He said the biggest fine imposed on a law firm so far was £500,000, but he would not be surprised “if the £1m barrier is breached”.
Mr Miller warned that the impact of the fine increases would hit traditional law firms as well as alternative business structures.
At the moment, the SRA can fine the latter up to £250m and individuals working at them up to £50m, compared to just £25,000 for traditional law firms and their staff, a figure only increased in June from £2,000.
However, under the plans, the SRA would apply the same income-based approach to solicitors whatever type of firm employed them. This meant high-earning individuals at traditional firms were more likely to be referred to the SDT, so they could be fined the appropriate amount.
In the case of an agreed outcome between the solicitor and SRA, the fine would be calculated in the same way, and cases transferred to the SDT to approve the fine if it was more than £25,000.
“The consultation is very much directed at reducing discretion in individual cases to increase consistency,” Mr Miller said. “With relatively little discretion there is a risk of outcomes which are quite difficult and arbitrary.”
He added that the SRA has “entirely discounted” the reputational risk to law firms of its decisions, which featured in the legal press and were picked up by the mainstream press.
“This has a huge impact and the SRA should take more account of that.” He added: “It’s a rather bleak future, and firms are going to have to cope with it.”
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