SRA consultation on penalties

The Solicitors Regulation Authority (SRA) has launched a consultation asking for feedback on the fines it can levy against firms and individuals that have breached the Code of Conduct.

The proposals look to make the fining criteria more consistent and transparent.

If approved, the policy would adopt a three-step approach to determining the level of a financial penalty:

1. The seriousness of the conduct

2. Mitigating factors

3. Whether the penalty will remove profit arising from the conduct

Seriousness will be decided by looking at both the nature of the conduct and the harm caused to clients or others.

Decision makers would be guided in individual cases to ‘penalty brackets’ within which to levy a fine.

There is a £2,000 limit on the SRA’s fining powers in respect of ‘traditional’ law firms and those working in them, so the guidance would currently be most relevant to ABSs and those working in them.

The consultation also proposes that discounts of up to 40 per cent could be applied in warranted by the mitigating factors.

David Middleton, SRA Executive Director for Legal & Enforcement, said: "The effective and proportionate use of regulatory powers plays an important role in protecting the interests of consumers and the integrity of the legal system.

“Financial penalties provide a flexible method of deterring inappropriate conduct by those directed to pay them but also by sending a deterrent message others.

"The guidance would sit underneath the existing framework in the SRA Disciplinary Procedure Rules for determining when a fine is appropriate and what sum should be levied.

“We’re keen to receive stakeholder views on our thinking here and on the new ideas discussed in the consultation."

The consultation can be seen at www.sra.org.uk/consultations. It runs for 12 weeks until 19 April.

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