The Solicitors Regulation Authority (SRA) has announced that it will be holding its own adjudication panel hearings, rather than sending some cases to the Solicitors Disciplinary Tribunal (SDT). This decision has been met with mixed reactions, with some lawyers praising the SRA for taking control of the disciplinary process, while others have expressed concerns about the fairness of the new system. It is referred to as a First Instance Decision (FID) and can be made in several ways – by agreement with the respondent (a regulatory settlement agreement) or by an adjudicator sitting on their own or with a panel. The panel may call the respondent for interview as part of considering the case, or they may decide to convene a hearing at which witnesses may be cross-examined.

The SRA has argued that holding its own hearings will allow it to be more responsive to complaints and to take action more quickly. It has also said that the new system will be more efficient and cost-effective. However, some lawyers have raised concerns about the lack of independence of the adjudication panel, which can be made up of SRA staff. They have also argued that the new system will not be as fair as the SDT, which is an independent tribunal. The SRA has said it will continue to refer cases to the SDT for more serious disciplinary matters. It remains to be seen how the new adjudication panel hearings will work in practice. However, the SRA's decision to hold its own hearings is a significant change to the way solicitors are disciplined in England and Wales.

Here are some of the key arguments for and against the SRA's decision:

Arguments in favour of the SRA's decision:

• The SRA will be able to take action more quickly and efficiently.
• The SRA will be able to be more responsive to complaints.
• The new system will be more cost-effective.

Arguments against the SRA's decision:

• The adjudication panel will not be independent.
• The new system will not be as fair as the SDT.
• The SRA may be more likely to take action against solicitors in order to protect its own reputation.

Income based fines?

The adjudication panel will have the power to make income-based fines. This means that the amount of the fine will be based on the income of the solicitor or firm. The SRA has said this will ensure that fines are more proportionate and will have a greater deterrent effect. The SRA has published guidance on how the adjudication panel will calculate income-based fines. The guidance states that the panel will consider the following factors:

• The solicitor's or firm's annual income
• The solicitor's or firm's assets
• The solicitor's or firm's ability to pay a fine
• The guidance also states that the panel will have discretion to depart from the guidance if it considers it appropriate to do so.

Here are some of the potential benefits of income-based fines:

• They will be more proportionate to the seriousness of the misconduct.
• They will have a greater deterrent effect.
• They will be more fair to solicitors and firms with lower incomes.

Here are some of the potential drawbacks of income-based fines:

• They may be seen as unfair to solicitors and firms with higher incomes.
• They may discourage solicitors and firms from taking on complex or high-risk work.
• They may lead to solicitors and firms becoming more risk-averse.

The SDT’s powers for context

The Solicitors Disciplinary Tribunal (SDT) is an independent tribunal that can hear cases against solicitors and firms who have breached the SRA's rules. The SDT has the power to impose unlimited fines on solicitors and firms who have been found guilty of misconduct. The SDT's power to impose unlimited fines was introduced in 2015. The change was made in response to concerns that the SRA's previous fining powers were too limited. The SRA's previous fining powers were capped at £50,000. This meant that the SRA was unable to impose fines that were large enough to deter very serious misconduct. The SDT's power to impose unlimited fines has been used in a number of cases. In one case, the SDT fined a solicitor £150,000 for dishonesty. In another case, the SDT fined a firm £250,000 for failing to adequately supervise its staff.

Here are some of the potential benefits of the SDT's power to impose unlimited fines:

• It deters serious misconduct by solicitors and firms.
• It ensures that fines are proportionate to the seriousness of the misconduct.
• It provides the SRA with the flexibility to respond to changing circumstances.

Here are some of the potential drawbacks of the SDT's power to impose unlimited fines:

• It may be seen as too harsh by some.
• It may discourage solicitors and firms from taking on complex or high-risk work.
• It may lead to solicitors and firms becoming more risk-averse.

Overall, the SDT's power to impose unlimited fines is a significant tool that can be used to protect the public and to uphold the standards of the legal profession.

What is the Law Society's position on the topic?

The Law Society is the professional body for solicitors in England and Wales. It has a number of concerns about the SRA's decision to hold its own adjudication panel hearings, rather than send cases to the Solicitors Disciplinary Tribunal (SDT). The Law Society is concerned that the adjudication panel will not be independent. The panel will likely be made up of SRA staff, who are ultimately answerable to the SRA's board. This could lead to the panel being seen as biased against solicitors. The Law Society is also concerned that the new system will not be as fair as the SDT. The SDT is an independent tribunal, which means that it is not influenced by the SRA. The SDT also has a number of procedural safeguards in place to protect the rights of solicitors, although the SRA have published guidance on how their FID’s may be subject to internal review or appeal to the SDT / High Court.

The Law Society has called on the SRA to reconsider its decision to hold its own adjudication panel hearings. It has also called on the SRA to publish more information about the new system, including the criteria that will be used to decide which cases are heard by the adjudication panel and which cases are sent to the SDT. The SRA has said it is committed to fairness and transparency. It has said that the adjudication panel will be independent and that it will continue to publish guidance on how the panel will operate. It remains to be seen how the new adjudication panel hearings will work in practice. Will the power be used as rarely as the SRA anticipate, or will it become the new normal?

Will there be an appeals process?

The guidance on appeals was published on the SRA website on 10 February 2023. The guidance sets out the criteria to be used to decide whether an appeal against a decision of the adjudication panel will be allowed. The criteria are:

• Whether there is a serious error of law. This means that the adjudication panel has made a mistake in the way that it has applied the law.
• Whether the decision of the adjudication panel is manifestly wrong. This means that the decision is so clearly wrong that no reasonable person could have reached it.
• Whether there has been a breach of natural justice. This means that the adjudication panel has not followed the rules of fairness in reaching its decision.
• If an appeal is allowed, the SDT will hear the appeal and make a fresh decision. The SDT is not bound by the decision of the adjudication panel.

The guidance also sets out the procedure for appealing a decision of the adjudication panel. The appeal must be made in writing within 28 days of the decision being made, although late appeals will be accepted in some circumstances. The appeal must be sent to the SRA's Appeals Unit. This process is distinct from a respondent’s request for an internal SRA review of an FID. The SRA are keen to point out that a review is not an opportunity to put the same submissions to a different officer in an attempt to extract a different result. A review needs to be based upon a material defect in the decision making process or the arrival of new evidence.

Nevertheless, internal determinations made without the respondent’s agreement are only as good as their appeal outcomes and it will be some time before the industry can take a meaningful view on how fair the process appears to be. It already has a flavour of the HMRC v tax payer relationship, so the SRA will need to be scrupulous in its deployment of what could be career ending decisions. 

The full SRA guidance 30th May 2023 is HERE.