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‘Precedent for Introducing Higher Fining Powers is Clear,’ says Baroness Stowell
May 15, 2024

The SRA has supposedly secured support in the House of Lords to increase its fining powers.

Baroness Stowell of Beeston, who chairs the Communications and Digital Select Committee, has stated in a letter addressed to lord chancellor Alex Chalk that there is scope for legislating to widen the areas where the Solicitors Regulation Authority could have unlimited powers. Following the evidence from the SRA on strategic litigation against public participation, Baroness Stowell of Beeston highlighted the inconsistency in punishing breaches relating to economic crime and for firms engaging in abusive and problematic litigation. Unlimited fining powers were given to the SRA not long ago by the Economic Crime and Corporate Transparency Act for misconduct relating to financial crime. Stowell wrote that ongoing legislation concerning the restriction of SLAPPs should also have the same ability to issue unlimited fines.

“At present, the regulator can fine traditional law firms up to £25,000 for wrongdoing related to SLAPPs,” stated Baroness Stowell. “This sum is very small given the overall turnover of these firms. During the course of our work, we have been told that this does not provide an effective deterrent. The precedent for introducing higher fining powers is clear. The SRA already has powers to fine alternative business structures (other types of firms carrying out legal work) and those working in them £250m and £50m respectively. The logic of having a fining limit 10,000 times lower for traditional law firms eludes us.”

Stowell also stated the restrictions on unlimited fining powers were “problematic” due to the fact they don’t capture SLAPPs. The bill, she added, “offers a rare and valuable opportunity to enable the regulator to impose fines that actually deter wrongdoing and stop law firms from profiting from SLAPP cases”. The committee has also heard repeated concerns of law firms engaging in private intelligence firms or PR firms to “survey, intimidate or smear defendants”.

Stowell also suggested that the SRA’s powers of investigation should be amended to allow for looking into the actions of third parties who might be engaged in this sort of activity. She stated, “This would help prevent law firms from simply outsourcing activities that breach the SRA’s professional standards.”

The Strategic Litigation Against Public Participation Bill will soon move to the report stage in the House of Commons due to passing both the committee stage and second reading. To read the full Law Society Gazette article, click the link below:

 Calls grow in parliament to extend SRA’s unlimited fining powers

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