Law Society raises concerns over SRA’s additional powers to combat economic crime

Law Society urges government to consider the “proportionality of additional regulation”

The Law Society of England and Wales has raised concerns at how effective the Solicitors Regulation Authority’s (SRA) additional powers will be in combatting economic crime.

Lubna Shuja, president of the Law Society, welcomed the second Economic Crime Bill’s intention of stopping money laundering in the UK and stated the Law Society also believes the Companies House reforms will “help to improve transparency over UK company structures” and “strengthen the business environment.

Shuja also emphasised the Law Society’s support to the UK government in its fight to tackle economic crime. She added:

“We propose amendments to the Bill to provide greater clarity to the proposed legislation, which would assist companies and investment vehicles to operate smoothly in the UK.

Shuja did however raise concerns within the Law Society over the government’s proposal to allow the SRA the ability to “impose limitless financial penalties for economic crime disciplinary matters.”

The Ministry of Justice announced on the 20^{th of} July, 2022 that the SRA’s fining powers have been increased in relation to traditional firms and individuals from £2,000 to £25,000. Shuja claimed:

“There appears to have been little evidence that a parallel increase in the Financial Conduct Authority fining powers – or the large fines they have applied – have aided the fight against financial crime.

Therefore, we do not have confidence that increased fining powers for the SRA would have a significant enough impact on the fight against economic crime to warrant the additional burden of regulation.”

Shuja raised her concerns the impact of these additional powers will have on Law Society members and urged the government to consider the “proportionality of additional regulation”. She concluded:

“The proposed unlimited powers would be likely to cover more serious or significant cases which currently go before the Solicitors Disciplinary Tribunal (SDT) and we maintain that this should remain the case.”