The maximum fine the SRA can impose on traditional law firms will rise from £2,000 to £25,000 (for alternative business structures, it has powers to fine up to £50m for individuals and up to £250m for firms). A schedule of fixed penalties will be brought in for low-level breaches, with the aim of speeding up the process for less serious behaviour. The SRA will hold a consultation later this year before deciding the details of the fixed penalties.
Where sexual misconduct, discrimination or any form of harassment is concerned, however, solicitors will be suspended, struck off or sanctioned with restrictions on practice. Only in exceptional circumstances will financial penalties be considered.
Solicitors and firms will retain the right to appeal any outcome or penalty imposed at the Solicitors Disciplinary Tribunal (SDT).
The plans are based on feedback to the SRA’s public consultation, Financial Penalties, which closed in February. It received 7,500 responses with most broadly in favour of the principles outlined.
One key area of concern was the lack of alignment in approach between the SRA and SDT. This included feedback that the SDT regime provides more confidence due to greater transparency and independence.
The SRA said it would aim both for better alignment with the SDT and for greater transparency. It committed to working with the SDT to develop updated guidance on financial penalties and the fixed penalties scheme.
Anna Bradley, SRA chair, said: ‘The ability to take account of turnover or individual income in setting fines would allow different levels of fine to be issued to a low-earning junior solicitor compared to a senior equity partner for similar offences.
‘Increasing the SRA’s fining threshold to £25,000 would mean more disciplinary matters could be dealt with by the SRA directly without being referred to the SDT.’
However, I Stephanie Boyce, president of the Law Society, which had suggested increasing the threshold to £5,000 or £7,500, said the SRA was increasing ‘its fining powers by more than 1,000% without balancing these changes with appropriate safeguards.’
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