The troubling first use of the SRA’s new fining power

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Guest post by Andrew Pavlovic, a partner at London firm CM Murray

Pavlovic: Profession needs to understand background to decisions

The Solicitors Regulation Authority (SRA) has used its increased fining powers for the first time, fining a solicitor £15,000 for failing to properly manage the affairs of three clients who were the subject of Court of Protection deputyship orders.

Supporters of the new regime will argue that this is exactly the sort of case the new regime was designed for, saving the time and additional cost associated with an application to the Solicitors Disciplinary Tribunal (SDT) for approval of an agreed outcome.

The SRA’s costs of £1,725 (which the solicitor has been ordered to pay) would inevitably have been more had that application been required.

However, some may consider that the additional cost involved in the SDT approving the outcome was a price worth paying to ensure that the SRA was making rational, reasoned and consistent decisions which were subject to scrutiny.

Whilst a dissatisfied respondent does have the option of appealing an SRA fine to the SDT, this may be commercially unattractive given the costs regime and the additional publicity that such a challenge would generate.

With regard to timescales, the conduct which has been sanctioned is stated in the decision to have taken place between 2014 and 2019. This is not uncommon, and reflects the fact that, in most cases, the delays that respondents and legal representatives are concerned about are delays which take place in the SRA’s own investigation, rather than the additional ‘delay’ caused by applying to the SDT for approval of an agreed outcome.

The SRA states on its website that it aims to complete 93% of investigations within 12 months; however, at its recent compliance officer conference, SRA chair Anna Bradley acknowledged that some cases still take longer than they should at the investigation and enforcement stage.

When the SRA consulted on increasing its fining powers, one of the concerns raised was a potential lack of transparency, with regulatory settlement agreements tending not to contain the same level of detail as the ‘Statement of agreed facts and outcome’ that is appended to SDT judgments in cases where the allegations are not contested.

Although it is too early to reach any firm conclusions, those concerns have certainly not been assuaged by this particular decision, which consists of one simple paragraph, setting out in very broad terms the nature of the allegations and the SRA principles which the solicitor was found to have infringed.

Crucially there is (1) no underlying detail as to the facts of the case; (2) no explanation as to the SRA’s assessment of the seriousness of the conduct; and (3) no explanation as to why a fine was considered to be the appropriate outcome in this case, and why the public should be reassured that the conduct would not be repeated, taking into account (among other things) any mitigating factors.

It would be unwise to draw too many conclusions from one case. The SRA’s guidance on publishing regulatory and disciplinary decisions makes clear that there may be exceptional reasons for publishing abbreviated decisions, for example where publication of the detail may prejudice on-going investigations or could risk damage to the respondent solicitor’s health.

It remains to be seen whether this is one of those instances, or if this is a new approach to the level of detail which will be published in its decisions going forward.

If the publication of this decision does signal a new approach, then this would be concerning. From a practitioner’s perspective, there is very little in the decision that can be gleaned or practically applied to other cases.

The profession does not have enough information to understand how the figure of £15,000 was arrived at in comparison to the severity of the conduct, and consumers have no information to reassure them that the solicitor does not prevent an on-going regulatory risk.

With the prospect of potentially unlimited SRA fines on the horizon for cases of economic crime, the need for accountability and transparency in SRA decision making is greater than ever.

The SRA recently closed a consultation on its publication of regulatory decisions, in which it asked for views as to the level of detail contained in its written agreements and outcomes. The responses from the profession seemed to indicate, in my view rightly, that more information should be provided, not less.

Whilst the SRA noted that including too much detail may make decisions inaccessible to the public, it is hard to see that public confidence in the profession is assisted by the publishing of abbreviated and unreasoned decisions.