Company ‘extremely concerned’ over proposed unlimited SRA fines | New
Proposals to give the lawyers regulator the power to impose unlimited fines and impose new obligations on lawyers in relation to money laundering should be reconsidered, representatives of lawyers and lawyers said this week.
The Economic Crimes Act and the Corporate Transparency Bill, unveiled last week, include a arrangement to give the SRA new powers to crack down on behavior linked to money laundering. The bill would amend the Solicitors Act 1974 to abolish the current misdemeanor penalty limit for economic crime. This would potentially mean the SRA could ask the Legal Services Board to increase the current fine cap by £25,000. The lawyers regulator has not yet said whether it would make such a request.
While welcoming the legislation’s measures to improve corporate transparency and ultimately reduce money laundering, the Law Society said it was “extremely concerned” by the proposal to allow the SRA to impose unlimited fines.
Company chairman I. Stephanie Boyce said: ‘The SRA’s fine powers have just been significantly increased in relation to traditional businesses and individuals from £2,000 to £25,000. £. We are concerned about what the proposed additional powers might mean for our members and how effective they will be in fighting economic crime.
“We urge the government to carefully consider the proportionality of any new regulations, given that there has been little evidence of whether or not the most recent changes to the SRA’s fine powers are effective.”
The Bar Council also expressed concern over the Bill’s proposal to add a regulatory purpose to the Legal Services Act in relation to promoting the prevention and detection of economic crime. It would create more work for businesses on top of their existing regulatory obligations, he 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 focus would be compatible with the role of lawyers in advising or representing client.
Bar chairman Mark Fenhalls KC said: ‘Tackling economic crime is essential, but creating more regulation will do nothing to solve the problem.’ The legal professions are already subject to targeted anti-money laundering legislation and a new regulatory focus may not be compatible with our role of representing clients.
“At worst, it sends the wrong message to the general public about the role of lawyers.”