Willetts: Independence concerns
More solicitors have attacked the Solicitors Regulation Authority’s (SRA) plans for new fining guidance, rejecting its “Robin Hood” approach of calculating fines based on income.
“A fine is like any other sanction. It must fit the seriousness of the breach,” said Birmingham Law Society’s (BLS) professional regulation committee in its response to the regulator’s consultation.
We reported yesterday how the City of London Law Society lambasted the proposals too.
BLS said the SRA had provided no data or evidence to back up its argument that increased fining bands and minimum fines would be a “credible” deterrent and in the public interest.
“The vast majority (over 90%) of individuals and firms upon whom a sanction is imposed either by the SRA or the Solicitors Disciplinary Tribunal have always been ‘first-time offenders’. The reliance therefore by the SRA upon increased powers being a credible deterrent does not bear close scrutiny.
“Most firms and individuals are determined to comply with the rules. It is damage to reputation and the stress and anxiety associated with SRA investigations that are sufficient deterrents, not higher fines.”
It also accused the SRA of not considering the impact of higher fines on small firms, legal aid firms, sole practitioners and those from Black, Asian or minority ethnic groups.
“Would higher fining levels signal the end of smaller firms and individuals who are prepared to work in the lower paid but vital sections of the legal services market? These are important considerations for the SRA.”
The response described as “wholly unfair” the use of gross turnover for firms and gross income for individuals for the calculation of fines as they bore “no relation whatsoever to the financial position of the firm or of the individual concerned”.
BLS’s main criticism was reserved for what it said was the lack of independence in the decision-making process. “It is said that the SRA acts as investigator, prosecutor and judge within the same organisation. It has fused these three functions which can offend the rules of natural justice.”
While adjudicators separate from the investigators would make the final decision, SRA investigators would recommend a sanction. BLS said this should end. “In that way, there is a separation between the investigation/prosecution function and the quasi-judicial decision on sanction.”
Similarly, “we vehemently oppose the introduction of minimum fines – especially at the levels proposed – which are at eye-watering levels”.
It explained: “The SRA is trying to short circuit any consideration of the facts of the case. Fines at these levels may be appropriate for some cases for others not. The adjudicators should consider each case on its facts.”
The response argued too for a separate framework for economic crime – as under new powers the SRA can levy unlimited fines for this – “otherwise there will be a temptation for investigation officers to increase fines for non-economic crime related conduct”.
Committee chair Jayne Willetts said: “We remain concerned by this ‘Robin Hood’ type approach where fines are calculated according to the financial worth of the firm or individual.
“A fine is like any other sanction. It must fit the seriousness of the breach. Financial worth is relevant to the ability to pay not to the size of the fine.”
On the lack of independence, she added: “It cannot be just for the SRA to approve fines of up to £500,000 without some semblance of independence.”
While excluding SRA investigation officers from making recommendations as to sanction could help, “surely serious breaches should always be referred to the Solicitors Disciplinary Tribunal where independence and professional expertise are available as well as the power to impose unlimited fines”.
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