City lawyers have warned that moves to strengthen the powers of the Solicitors Regulation Authority are a ‘retrograde step’.
The City of London Law Society has this week supported a ‘moderate increase’ in the regulator’s fining powers to an upper limit of £10,000, up from the current £2,000 threshold.
But the organisation warned that giving the SRA scope over more serious disciplinary matters, rather than passing them on to the Solicitors Disciplinary Tribunal, risks handing too much authority to the frontline regulator.
The caveat that solicitors will have the right of appeal to the SDT is also not enough to justify the limit increasing substantially, it argues.
Responding to the SRA consultation, CLLS chief executive David Hobart, said: ‘We consider a system whereby the regulator is put in the position of being policeman and judge and jury in serious disciplinary matters would be a retrograde step, notwithstanding any internal segregation of these conflicting functions within the SRA.
‘Nor do we see the right of appeal to the SDT as an adequate safeguard. Many firms and individuals faced with an adverse decision from the SRA would find the prospect of appealing, and thus challenging the regulator with whom they would have to continue to work at the end of the process, daunting and perhaps prohibitive.’
The SRA has mooted an increase in fining powers to as much as £100,000, but the CLLS said it preferred the SDT to remain as a ‘default disciplinary body’ for serious matters.
The CLLS also want the remit of the SDT to extend to alternative business structures, which are presently subject to SRA fines up to £250m.
The society, which represents around 15,000 City lawyers, said bringing ABS under the scope of the SDT would ‘at a stroke’ address any perceived inconsistency or unfairness in the current regime.
The society also expressed concerns about due process in regulatory settlement agreements and the prospect of agreed higher fines. It believes this could lead to firms or individuals feeling pressurised into settling their matter rather than going on to the SDT, and introduce inconsistencies into the disciplinary process.