The Solicitors Regulation Authority (SRA) should “reconsider” plans to let itself begin serving fines equivalent to five per cent of a law firm’s annual revenues, the Law Society has said.
The Law Society said fines matching five per cent of a law firm’s annual revenues would be “excessive and unjustified” as it urged the SRA to reconsider its proposals.
The solicitors watchdog first set out plans to increase its fining powers in November 2021, in line with proposals that saw the SRA up its maximum fines from £2,000 to £25,000 in May this year.
The SRA now plans to further increase its fining powers by letting it serve law firms with fines equal to five per cent of their annual turnovers.
The regulator has claimed increasing maximum fines will let it resolve cases more quickly, by letting it avoid sending cases to the Solicitors Disciplinary Tribunal (SDT), which has the power to impose unlimited fines.
The UK government has previously noted that 90 per cent of fines handed out by the SDT amount to sums of less than £25,000, in arguing the reforms will let the SRA focus on “more significant” problems.
The Law Society has however been highly critical of the SRA’s plans in warning the plans could undermine the independence of the judgement process, in blurring the lines between investigators and adjudicators by placing all roles in the hands of the watchdog itself.
“There needs to be a clearer functional separation of the roles of investigators and adjudicators to maintain the confidence of the profession and the public,” Law Society president Lubna Shuja said.
“Adjudicators, as SRA employees, have access to the regulator’s records and can see a solicitor’s past regulatory history,” Shuja continued. “This could prejudice their views and could lead to an unfair decision.”
The SRA has previously proposed introducing explicit rules setting out that all fines imposed by the watchdog must be handed down by functionally separate adjudicators.