SRA fines firms over transparency requirements

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The Solicitors Regulation Authority (SRA) has fined eight law firms for breaching transparency rules and one firm for failing to publish diversity data. The fines follow changes to regulations that allow the SRA to enforce tougher sanctions for certain low-level breaches without a full disciplinary process.

Penalty notices have been supplied for a range of matters, including failures to:

• publish diversity data in the required time frame;
• publish service information on websites; and
• complete anti-money laundering paperwork.

On 19 December 2023, HG Legal Ltd were the first firm fined for not supplying diversity data. This follows three fines given out in November to firms that didn’t comply with SRA transparency rules, a sanction now imposed on five other firms as of January.

As part of the reforms, firms are initially fined a fixed-penalty notice £750 for a first breach and then £1,500 for a subsequent breach of the same category within three years. The SRA hopes that fines will help to increase compliance and allow the regulator to “deal with non-complex breaches of […] rules more swiftly”, according to Chief Executive Paul Philip. He added that “the threat of fixed penalties is proving effective in bringing firms into compliance” and that “collecting diversity data helps everyone”.

Philip said: “A diverse, inclusive legal sector that represents the communities it serves is a strong legal sector. Firms’ diversity data not only helps us understand the progress the sector is making, but enables firms to benchmark themselves against others. Providing that data is not difficult to do, but it is a regulatory requirement.”

The regulator denies targeting smaller firms with less capacity to deal with low-level compliance issues. Philip also emphasised that firms are given “plenty of opportunity” to comply to regulations before a fine is issued. He explains that the transparency rules are in place to “help people compare law firms’ services and make informed choices. Those firms that are publishing the correct information rightly expect that we will take action against those who don’t”.