Proportionality of the SRA’s extra powers in combatting economic crime must be considered
Ahead of the Economic Crime and Corporate Transparency Bill’s second reading in parliament, 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.
“We welcome the second Economic Crime Bill’s intention of stopping money laundering in the UK and we also believe the Companies House reforms will help to improve transparency over UK company structures and strengthen the business environment,” said Law Society president Lubna Shuja.
“We support the UK government’s ongoing commitment to tackling economic crime, preventing the misuse and abuse of limited partnerships and corporate structures, and increasing the integrity of the registers maintained by the Registrars of Companies.
“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.
“We do have a concern, however, over the government’s proposal to allow the SRA the ability to impose limitless financial penalties for economic crime disciplinary matters.
“The SRA’s fining powers have been substantially increased in relation to traditional firms and individuals from £2,000 to £25,000.
“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.
“We are concerned about the impact of the proposed additional powers on our members and we urge the government to carefully consider the proportionality of additional regulation.
“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."
Notes to editors
Read the Economic Crime and Corporate Transparency Bill 2022
About the Law Society
The Law Society is the independent professional body that works globally to support and represent solicitors, promoting the highest professional standards, the public interest and the rule of law.
Press office contact: Naomi Jeffreys | 020 8049 3928