Transparency rule failures lead SRA to issue first fixed penalties


Philip: Threat of penalties bringing firms into compliance

Three law firms that failed to comply with the transparency rules have become the first to receive fixed £750 fines under the Solicitors Regulation Authority’s (SRA) new regime.

A second offence within three years will lead to a £1,500 fine.

Hertfordshire sole practitioner Williams Hortor Law and Mediation and Leicester firm Crystal Law were fined for not publishing mandatory details about costs and/or services, as was south London firm Ola Leslie Solicitors, which also did not publish mandatory details about its complaints procedure.

The failures included not explaining key stages and likely timescales relating to services, not publishing details on experience and qualifications of those working on some, or all, of the service areas covered by the rules, and not including information on disbursement costs and VAT in published prices.

The enforcement push follows SRA research last month that found nearly six in 10 law firms failing to publish the full cost and service information required by the transparency rules, nearly five years on from their implementation.

The SRA said it had other live cases which may result in further fixed penalties. “Firms are sent notices of potential fines, with the opportunity to put the issue right,” it said. “In many cases, the threat of penalties is resulting in firms becoming compliant.”

The fixed penalties form part of the SRA’s new fining powers introduced last year and are published on the SRA website. They are being piloted with a small number of lower-level breaches breaches by firms.

In addition to the transparency rules, they can be handed out for failing to provide information or documentation requested or required by the SRA, such as firm diversity data or a declaration of compliance with anti-money laundering requirements, and failing to ensure approval of role holders like compliance officers.

The SRA said last month that it would consult in 2024 on fixed penalties for minor anti-money laundering system and control failings, although the figures could be higher.

Chief executive Paul Philip said: “Compliance is clearly not optional. Our transparency rules are there to benefit the public, helping people compare law firms’ services and make informed choices. All those firms that are publishing the correct information rightly expect that we will take action against those who don’t.

“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. It also appears that the threat of fixed penalties is proving effective in bringing firms into compliance.”

Andrew Donovan, managing director of Compliance Office, said that while he could see the benefit of fixed penalties in “simple and clear cases of failing to engage with well-established rules”, the precise manner in which law firms must publish costs information covering a variety of different scenarios “is not always simple”.

“I have seen at least once example in the past of the SRA finding fault with its own template wording. Those templates were subsequently updated which corrected the problem but there can realistically remain some uncertainty on finer points of detail.

“We’ve seen the SRA criticise firms for linking to the SRA homepage on their website rather than the SRA’s preferred page for this purpose, even though no specific web page is mandated under the rules.”

He said it was positive that the SRA was allowing firms an opportunity to address the issues identified. “I would strongly encourage those firms to seize that opportunity because these fines are a serious matter and are published.”




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog


Will solicitors finally be fans of transparency now?

Since the introduction of the SRA’s transparency rules in December 2018, I have been an advocate for law firms going further then the regulatory essentials.


A two-point plan to halve the size of the SRA

I have joked for many years that you could halve the size (and therefore cost) of the Solicitors Regulation Authority overnight by banning both client account and sole practitioners.


Key cyber and data security questions to ask a legal IT provider

One of the growing priorities that law firms face when considering a legal technology provider is cyber and data security, such as their responsibilities and cyber incident management.


Loading animation