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David Vascott

News, Features and Opinion Editor, Solicitors Journal

LSB to review regulators' enforcement toolkit

LSB to review regulators' enforcement toolkit


The Legal Service Board will look at how regulators can better tackle serious and wilful misconduct in the legal services industry - including through the introduction of higher fines.

The Legal Services Board announced the review on 4 August. In a press release it said:

The Legal Services Board (LSB) has today announced plans to review the enforcement and investigative tools available to the legal services regulators, including the Solicitors Regulation Authority (SRA). This could include increasing financial penalties available to regulators, as well as enabling regulators to proactively gather information and share intelligence to help them detect and address misconduct. This is in response to the LSB’s long-held view that existing penalties may be insufficient to deter wilful and serious misconduct in some areas.

The LSB already has work underway to review regulators’ disciplinary and enforcement processes, following weaknesses identified through its annual regulatory performance assessments. The LSB will assess the progress made by regulators in addressing these weaknesses as it considers the case for strengthening the enforcement tools available to them.

Under section 69 of the Legal Services Act, the LSB has the power to recommend to the Lord Chancellor changes to the functions of legal services regulators, including in relation to the level of financial penalty that can be applied when misconduct has been identified and established. The LSB’s review is being carried out with a view to framing, subject to statutory process and consultation, an appropriate recommendation.

LSB chair Alan Kershaw said:

“The public rightly expects that lawyers in England and Wales will uphold the highest professional standards and ethical conduct.

“For some time, we have been concerned that a lack of effective fining powers among some regulators, particularly the Solicitors Regulation Authority, may hamper their ability to tackle wilful and serious misconduct. We are anxious to ensure that regulators have the most effective tools available to identify and deal with such misconduct.

“At the same time, the LSB needs to have confidence that first class enforcement powers are accompanied by first class enforcement processes that are fair, transparent and timely.

“We will address these issues to help build public trust and confidence in legal services – an objective we hope everyone will get behind.”

In May last year, the LSB wrote to the deputy prime minister concerning economic crime setting out its support for the Government to significantly increase the SRA’s fining powers. The government is pursuing legislation that will significantly increase the level of financial penalty the SRA can impose in relation to economic crime, but the maximum penalty it can impose in relation to matters of misconduct beyond economic crime remains at £25,000.