Hot topic: SDT sending a message with record fine?

All records were broken recently when the Solicitors Disciplinary Tribunal fined a solicitor an eye-watering £305,000 for taking unfair advantage of…

All records were broken recently when the Solicitors Disciplinary Tribunal (SDT) fined a solicitor an eye-watering £305,000 for taking unfair advantage of his client.

We discussed the implications of the decision with Joanne Smith, solicitor in Compli, as part of the '60 seconds with...' feature for this week's newsletter:

Do you think this means record fines are going to become the norm?

I think what is interesting about this case is that the fine levied by the tribunal took into consideration the “gain” made by the defendant (effectively cancelling it out) which sets an interesting precedent. In future will the precise financial gain made by offending solicitors be used as a basis of the penalty calculation? Such certainty would send a strong message to the profession and provide for some interesting maths. One thing is for sure, early advice and support from specialist consultants in our Compli team is vital if the SRA start knocking on your door and asking difficult questions.

Where will this £305,000 ultimately end up?

Fines paid to the tribunal ultimately end up in the piggy bank of the Crown. This is in marked contrast to fines levied by the SRA which is able to take the money and plough it back into the profession. When you think about the SRAs powers to fine an ABS you are looking at a potentially huge revenue stream for the regulator that, if spent wisely, could benefit the solicitor brand.

When you say “benefit the solicitor brand” do you think throwing more money at the SRA would stop it needing to issue apologies like the one it issued to Local Authorities over the time taken to deal with ABS applications? 

I don’t think that there is a single public sector body that wouldn’t like a bit more gold coinage but it’s not the miracle solution. The SRA admitted that the challenge with Local Authorities (and this goes for ABSs generally) was that it had not anticipated the issues that would arise or the complex structures that would apply for ABS status with layers upon layers of corporate ownership. Admittedly more hands on deck to deal with the volume of applications would no doubt help but at the end of the day the SRA need to employ staff that understand the ins and outs of the industry or it will never be able to keep up.  Our experience of dealing with ABS applications on behalf of clients has been largely positive but we’ve run out of fingers (and this is quite a big team) to count the number of times we’ve been asked to resend documents or information – and this is before we get to the juicy technical stuff."

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