Alternative business structures (ABS) that step out of line could face a maximum fine £100m higher than previously expected, after the Legal Services Board decided to increase the maximum penalty for errant ABS to £250m.

Responding to a consultation on the issue, the LSB said it considered carefully the SRA’s submission that, in setting a maximum fine, the LSB should take into account the firms that profited from the miners’ compensation scheme.

The SRA cited a Gazette article in its submission, which named the five firms that earned the most from miners’ lung disease claims, and revealed that £1bn in total was paid to 500 law firms for those cases.

The LSB said that its proposed maximum fine of £50m for individuals will remain.

Chancery Lane argued that ABS should face unlimited penalties, in line with the sanctions available to the Solicitors Disciplinary Tribunal.

However, the LSB said that fixed maximum penalties provided clarity and meant that licensing authorities would not have to spend considerable time and effort calculating fines based on an entity’s turnover.

The LSB rejected an argument by the Institute of Legal Executives Professional Standards that the maximum £50m fine for individuals was too high.

LSB chairman David Edmonds has asked justice secretary Kenneth Clarke to approve the measures.

The Law Society, the SRA, the Institute of Trade Mark Attorneys, the Institute of Legal Executives Professional Standards, and the Master of Faculties all responded to the short consultation.