SRA: Fining powers are sufficient, says Nally
The president of the Solicitors Disciplinary Tribunal has outlined his opposition to the Solicitors Regulation Authority’s (SRA) campaign for greater powers to fine errant solicitors.
Ed Nally said it would be akin to allowing the police to dispose of prosecutions without bothering the courts.
The SRA has been lobbying vigorously to increase the current £2,000 limit on the fines it can hand out without needing to refer solicitors and firms to the tribunal.
The figure contrasts starkly with the powers it has to fine alternative business structures (ABSs) and those working within them, which are set at £250m and £50m respectively by the Legal Services Act 2007.
In the final part of his interview with Legal Futures (see here and here for the previous two), Mr Nally described the SRA’s fining powers as “a regulatory mechanism for lower-end and trivial breaches which nobody wants to clutter up the tribunal”.
The tribunal was focused on “the heavier end of regulatory enforcement” and he argued it was not appropriate to give the SRA sole responsibility for those.
“If you draw a parallel with the criminal law… it would seem to be quite convenient if the police could apply fining powers and dispose of cases without cluttering up the courts, but I’m not sure that constitutionally very wise.
“There are sufficient tools that the regulatory locker for the SRA to dispose of serious conduct breaches here at the tribunal, and that’s the correct and safer thing….
“A mechanism which says investigation, enforcement, adjudication and financial penalty all sit in the one regulatory body feels instinctively uncomfortable for me.”
Mr Nally added that he was unaware of any suggestion that the tribunal not imposing “appropriately high or significant financial penalties where those are deserved”.
It was, he argued, better for the SRA to promote the use of agreed outcomes – which compromise prosecutions but have first to be approved by the tribunal.
“I think that I think professional confidence is enhanced by that,” he said.
There have been a handful of cases where the tribunal has rejected agreed outcomes for not being strong enough – indeed, the largest fine issued against a law firm to date, £500,000 for US practice Locke Lord, came after the tribunal considered the previously agreed figure of £250,000 to be insufficient.
Mr Nally also said that, given the vast majority of law firms were traditional practices, rather than ABSs, the argument that they should be brought into line with ABSs was not a strong one.
He addressed as well the relationship between dishonesty and lack of integrity, after a High Court judge returned to the issue recently following the Court of Appeal overturning his decision that they were synonymous.
Mr Nally said the tribunal was “becoming quite used” to interpreting whether an action lacked integrity but fell short of being dishonest.
As an example, he said it showed a lack of integrity to break the professional rule prohibiting a solicitor from acting for both sides in a piece of litigation, but it was not a crime or dishonest. “It’s a self-imposed ordinance on the profession.”
He said overseeing the tribunal was “a genuine and real privilege” and suggested that “we punch above our weight in terms of our impact on the regulated community in a positive way”.
Mr Nally added: “[People] may not agree with our individual decisions but I think in terms of our approach to things and the way in which we dispose of cases that are often very difficult and sensitive, I don’t think we’re criticised too often.”
Ed Nally is speaking at the Legal Futures Regulation and Compliance Conference on 6 June. Click here for details and tickets.
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