Increased SRA Fines and Recent Disciplinary decisions to be Aware of

Andy Donovan, Managing Director and Founder of Compliance Office

SRA increased fining powers by more than 10x

The SRA has been granted approval from the government to increase regulatory fines from £2,000 to £25,000. The SRA also plans to introduce a new system of fixed penalties for lower-level breaches, with the goal to reduce the number of cases passed on to the Solicitors Disciplinary Tribunal. The Law Society expressed its concern over the up to 1150% increase in fine limits, as the consultation response agreed to a suggested increase to only £5,000 to £7,000. The MoJ has however agreed with the increase.

What’s been happening in the disciplinary decision world?

Fines, dismissals, mitigating circumstances…

A former city partner was rebuked by the SRA last month for failing to have sufficient regard for the well-being of a female trainee solicitor and causing her to experience discomfort and distress when a work-related drinks event ended in a visit to a strip club. The trainee’s discomfort at being in the strip club was compounded by the partner placing his hand around her waist on two occasions. She felt unable to challenge his unwanted behaviour because of his seniority and the presence of clients.

A former Ashfords trainee solicitor has been fined £2,000 for slapping and grabbing a colleague’s behind on a night out after a work’s Christmas meal (among other unwanted actions). From the write up it looks as though the firm did a good job here on two fronts:

They sent a reminder to everyone about the standards expected of them on nights
Dismissed the individual following an investigation.

As firms grow, the probability that at some point someone will do something unwise will grow too, but it’s likely that the SRA will look at not just the behaviour itself but also how the risk was managed and responded to. In this case, the SRA seems to have been able to focus its attention purely on the individual in question, without major repercussions for the whole organisation.

In another case, a solicitor offered to settle a number of complaints received from a client, but the letter offering to settle the complaints contained a condition that the client would not pursue a complaint to any regulatory body. The solicitor in question has been rebuked by the regulator for failing to cooperate with the SRA and other regulators in their investigations of concerns in relation to legal services. Any effort to amicably resolve a complaint must never limit the right to take matters further.

In March 2020, a junior solicitor was struck off after leaving confidential documents on a train and then being dishonest to her employer about their whereabouts. After a lengthy two-year process, the SRA have applied to withdraw the allegations completely with no order as to costs and the solicitor is now allowed to continue to practise with conditions on her practising certificate.

Theft

A law firm had to report a former employee (legal secretary) to the SRA after she was convicted for stealing a client’s collection of war medals and jewellery held by her employer for safekeeping. The SRA has issued a control order preventing her from working in the profession without their permission.

Client money, ‘chaotic’ finances and failing to carry out role as a COLP

A control order was also given to an employee of a law firm who was found by the SRA to be dishonest after he accepted a cash payment from a client and did not pay this cash into the client account. He then lied to the SRA and claimed he had not received the cash payment.

Two equity partners have been fined by the Tribunal for failing to notify the SRA that £327,000 from a property sale had been paid into the wrong account. This all happened whilst the firm was under investigation by the SRA for other issues. The firm acted for a couple in the sale of a property and received two emails from different addresses, asking for funds to be paid into different bank accounts. Payment was arranged to the second emailer, and when the client informed them that the money had not been received, the payment was recalled. The partners said to the Tribunal that the SRA was not notified because the money had been recalled. This issue was one of several rule breaches admitted by the partners about how the firm’s accounts were dealt with.

A solicitor and ‘COLP’ has been fined £18,000 for several breaches of the SRA Principles and Code of Conduct including failing to investigate and identify an own interest conflict, failing to inform clients of the commission received by a connected business and failing to carry out her role as ‘COLP’.

If you are concerned about what and when you should report to the SRA or you need support in carrying out your COLP & COFA duties we can help and guide you. We provide support in analysing potential rule breaches and can offer regular compliance support and COLP & COFA training.

Undermining justice whilst carrying out jury service

A solicitor who “undermined justice” whilst carrying out jury service has been jailed. The solicitor carried out her own online research into the case and shared what she had learned with other jurors, despite being told not to at the beginning of the trial. This led to the trial having to be abandoned at a cost of £30,000.

SRA and AML training and compliance solutions from VinciWorks and Compliance Office

VinciWorks has recently partnered with Compliance Office, the leading SRA consultancy firm, to offer you a full range of compliance training, software, and consultancy services.

Founded by Andy Donovan, a former SRA legal policy advisor, Compliance Office’s team of consultants draws on years of experience and a proprietary set of tools and templates to help law firms with all of their compliance needs. The merger enables VinciWorks to provide an end-to-end AML package including a CDD client onboarding tool, AML training and compliance consulting, as well as an all-in-one SRA solution that includes training, compliance software, and consultancy.

Our combined services and software include: