City of London Law Society says proposals are ‘arbitrary’ and ‘flawed’
A body representing City solicitors has criticised new proposals by the regulator to significantly increase its fining powers, calling them “arbitrary” and “not fit for purpose”.
The City of London Law Society stated that while it does not oppose a scheme allowing solicitors and law firms to face “substantial fines”, it believes the approach taken by the Solicitors Regulation Authority (SRA) is “flawed”.
The plans will introduce two new fining bands, likely reserved for serious misconduct involving economic crime, with the power to impose unlimited financial penalties on the worst offending law firms and solicitors.
Penalties for firms under Band E can range from 6% to 10% of their annual domestic turnover, increasing to a minimum of 11% under Band F. Meanwhile, solicitors will face fines ranging from 113% to 145% of their annual gross income under Band E, with a starting point of 146% under Band F.
In a detailed response to the plans, the CLLS accused the SRA of failing to properly consider the likely impact of fines on firms and individuals, making it difficult to understand how the SRA believes its scheme aligns with its own obligations.
The group also argued that the scheme is inconsistent with established common law principles governing the regulation and discipline of solicitors as applied by the Solicitors Disciplinary Tribunal. It also claimed that the SRA failed to explain why its scheme deviates from these principles or whether these issues were considered and deliberately rejected.
Iain Miller, chair of the CLLS professional rules and regulatory committee which drew up the submission, said:
“The more we went into the SRA paper, the more confused it became. It looks as if the SRA has offered a policy without thinking through its ramifications, without a clear grasp of the essentials, and without any proper consideration of the underlying law. We urge the SRA to reconsider its proposals.”