Treasury fails to collect millions in solicitor misconduct fines

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Oct 03, 2017
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A freedom of information request has shown that £2.6 million was owed to the Treasury in April

Chris Harris for The Times

The Treasury is missing out on millions of pounds in uncollected fines levied against solicitors guilty of serious misconduct.

The amount owed in unpaid fines from the Solicitors Disciplinary Tribunal (SDT) was £2.6 million at the end of the 2016/17 financial year, a freedom of information request has shown.

Last year the tribunal ordered fines against 51 solicitors, with the amounts ranging from £1,000 to £40,000, although this year a £250,000 fine was levied against the international firm White & Case.

However the tribunal itself has no statutory role to play in fine enforcement, with that responsibility handled solely by the Treasury.

The response to the freedom of information request, which was made by the [ital] Law Society Gazette, revealed that almost £2 million was levied in total from solicitors between April 2012 and March 2017.

However, the amounts collected varies significantly from year to year: in 2015/16 the Treasury collected just £182,000, while it was £523,000 in 2016/17.

My understanding is that the FCA keep their fines so why are solicitors different?

In the past five years the government has collected £1.4 million, still well short of the £2.6 million outstanding.

A Treasury spokesman said that the total amount of outstanding fines could vary as a result of factors such as the number of fines imposed by the tribunal or the number of solicitors who repay their fines in instalments.

He added: “There will always be an outstanding total amount due at any one time but we work to ensure all fines are paid back in full where possible.

“We take legal advice on investigation and other actions when solicitors declare they are unable to pay or default against agreed payment plans. This might include applications to court to recover money, including actions for bankruptcy.”

The Solicitors Regulation Authority has argued for greater fining powers — it can only fine up to £2,000 before the matter is sent to the tribunal — but is understood to have little enthusiasm for taking tribunal fines in-house.

Iain Miller, regulatory partner at the London firm Kingsley Napley, said that it was time to ask why fines were not used to fund the regulatory system. “The justification currently is that the power to fine is a prerogative power and therefore any benefit accrues to the Crown. My understanding is that the FCA keep their fines so why are solicitors different?” he said.

A Law Society spokesperson said: “The Solicitors Disciplinary Tribunal has an important role to play dealing with allegations of professional misconduct and is working effectively.

“As with every profession, any solicitor whose actions violate the code of conduct or break the law is held to account. Enforcement of fines imposed by the SDT is a matter for the Treasury.”

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