Society ‘extremely concerned’ at proposals for unlimited SRA fines
Proposals to give the solicitors’ regulator powers to impose unlimited SRA fines and impose new money-laundering obligations on lawyers should be reconsidered, solicitor and barristers representatives said this week.
The Economic Crime Act and Corporate Transparency Bill, unveiled last week, includes a provision to hand the SRA new powers to clamp down on conduct related to money laundering. The bill would amend the Solicitors Act 1974 to abolish the current limit on the penalty for misconduct relating to economic crime. That would potentially mean that the SRA could apply to the Legal Services Board to increase the current fining limit of £25,000. The solicitors’ regulator has yet to say whether it would make any such application.
Whilst welcoming measures in the legislation to improve corporate transparency and ultimately reduce money laundering, the Law Society said it was ‘extremely concerned’ about the proposal to allow the SRA to impose limitless fines.
Society president I. Stephanie Boyce said:
“The SRA’s fining powers have only just been substantially increased in relation to traditional firms and individuals from £2,000 to £25,000. We are concerned about what the proposed additional powers could mean for our members and how effective they will be in combating economic crime.
“We strongly urge the government to consider carefully the proportionality of any further regulation, given that there has been little evidence of the effectiveness or otherwise of the most recent changes to the SRA’s fining powers.”
The Bar Council has also expressed its concerns at the bill’s proposal to add a regulatory objective to the Legal Services Act in relation to promoting the prevention and detection of economic crimes. This would create more work for firms on top of their existing regulatory duties, it said.
The Bar Council said it was not the role of legal professionals to prevent or detect crime, and it was unclear how the new objective would be compatible with the role of lawyers in advising or representing clients.
Bar chair Mark Fenhalls KC said:
“Tackling economic crime is essential but creating more regulation will do nothing to address the problem. The legal professions are already subject to targeted anti-money laundering legislation and a new regulatory objective may not be compatible with our role in representing clients.
“At worst it sends the wrong message to the general public about the role of lawyers.”
Kindly shared by The Law Society Gazette
Main article photo courtesy of Pixabay
