The Solicitors Regulation Authority is still owed more than £21m in total unpaid costs from individuals or firms it has prosecuted, the Gazette has learned.
New figures, revealed following a freedom of information request, appear to show the regulator is struggling to recover the costs accrued from bringing people before Solicitors Disciplinary Tribunal hearings.
At the same time, the costs being spent on successfully prosecuting solicitors and firms are at an all-time high. In the 2017/18 year, ending 31 October 2018, the tribunal awarded the SRA £3.4m in costs. That was a 30% increase on the previous year and more than double the amount awarded in 2014/15.
There is a shortfall in each of the last three years between costs awarded and costs recovered – albeit these will relate to different cases. In 2017/18, the regulator clawed back £2.1m of the prosecuting costs it had incurred.
Lawyers are now questioning the proportionality of the SRA’s disciplinary approach – in particular the risk of ‘over-prosecuting’ cases and racking up costs it will never get back.
Regulatory solicitor Paul Bennett, who has represented a number of lawyers before the tribunal, said the SRA was ‘a little naïve’ in pursuing each and every potential breach and overcomplicating misconduct proceedings.
‘As someone who has prosecuted for the Attorney General panel in the past I had reminders consistently to pursue the evidentially strongest elements using the minimum number of charges or allegations, he said. ‘This naturally leads to more admissions. The cultural defect of pursuing each and every possible allegation by the SRA lies at the heart of their costs recovery challenge.’
He urged the SRA board to set new parameters on the basis of a more proportionate charging policy and ensure the profession builds confidence in its regulator.
The outstanding £21.3m owed by prosecuted respondents refers only to cases where the tribunal has agreed to award costs. In some other cases, the amounts claimed are reduced by the SDT – leaving the unrecovered costs to be paid for indirectly by members of the profession.
Last week, during the hearing of former MP Fiona Onasanya, the tribunal chair Edward Nally expressed ‘anxiety’ about the SRA’s claimed £22,762, which was based on 40 hours’ preparation, and reduced it to £6,562.
A spokesperson for the SRA said the regulator has to take ‘effective action’ when solicitors and firms fail to maintain high professional standards.
He said: ‘It is important we are fair to all involved in our processes, and that those processes are thorough and robust. Investigation can therefore be costly. As part of our commitment to using the profession’s money efficiently, we try and recover those costs, either through the tribunal for cases it heard, or other courts where appropriate.’
He pointed out that in some cases the tribunal will defer repayments until an individual is able to afford them. Those appearing before the tribunal can also be offered extra support such as payment plans.
‘Engagement is important, and we will take a more robust approach with those who won’t engage with us, look to hide assets, or can pay but refuses to. We currently recover between £2m and £3m of debt every year.
‘As part of our wider work to provide value for money, we are continually looking at ways of keeping costs down.’