The SRA, sexual misconduct cases and the new financial penalty regime

The Solicitors Regulation Authority (SRA) recently made a statement about the applicability of its new financial sanctions regime to allegations of sexual misconduct.

What has been said?

That cases involving sexual misconduct, discrimination or harassment, financial penalties will only be considered in ‘exceptional circumstances’.

What has changed?

The short answer is very little. On 20 July 2022, following approval by the Ministry of Justice, the power of the SRA to issue financial penalties was increased from £2,000 to £25,000. The idea is that the SRA will have greater jurisdiction to deal with cases that otherwise would have been referred to the Solicitors Disciplinary Tribunal (SDT).

If a complaint is made about a solicitor or firm, the SRA will initially decide whether it needs to investigate. If it decides to investigate the case will be allocated to an investigator who will then assess whether there is evidence to warrant allegations being made that the solicitor or firm has breached the SRA Principles or the Code of Conduct. The respondent will then be asked to respond to those allegations in writing.

If the SRA then decides that the allegations are made out it has a range options of options available to it. These include a rebuke, a written warning, a financial penalty or referral of the case to the SDT.

Prior to 20 July 2022, cases would be referred to the SDT if the SRA considered its sanctioning powers to be insufficient, i.e. in cases where either it was necessary to impose a financial penalty greater than £2,000 or it considered suspension or striking off would be the appropriate sanction. It is important to remember that the SDT is entirely independent of the SRA.  Where a case is referred to the SDT, the SRA acts as a prosecutor.

Thus, the SRA can now deal with cases which it may otherwise have referred to the SDT as it considered the financial penalty it wished to impose was insufficient. It now intends to deal with those cases internally and is presently consulting on a tariff of penalties for certain types of misconduct and the means by which internal decisions will be made.

What about sexual misconduct cases?

The SRA appears to be excluding ‘sexual misconduct’ cases from its internal sanctioning jurisdiction save in ‘exceptional circumstances’. There are two fundamental problems with this seemingly blanket approach. Firstly, such cases can range in seriousness dramatically from a one-off ill-judged remark to much more serious harassment and even conduct which is in breach of the criminal law (e.g. a sexual assault). The second problem is that the SDT has tended to impose financial penalties in the few cases which have been decided before it (see for example SRA v Gary Senior and ors (2020) 11976-2019).

Thus, whilst attempts to expedite and streamline its disciplinary processes are welcome, it seems unhelpful and potentially unfair to determine in advance that a certain classification of cases will be subjected to a different qualitative decision-making process. It may be that as such cases often involve evidential conflict, the SRA considers it more appropriate to refer them to a Tribunal. Those cases that are referred to the SDT necessarily attract significant legal costs both incurred by the SRA and any Respondent who chooses to be represented. The scope for reclaiming costs against the SRA in failed prosecutions is limited (as detailed in our blog here).

Call us on 020 3504 3182 or email to find out how our specialist regulatory solicitors can help if you are facing SDT proceedings or an SRA investigation, or any other form of regulatory action.