The Solicitors Regulation Authority has backtracked on plans to boost the maximum fine it can impose on 'traditional' law firms by a factor of up to 50 in favour of a more modest rise.
It is seeking Ministry of Justice approval to increase the maximum from £2,000 to £10,000, in the face of strong opposition from - among others - The Law Society and Solicitors Disciplinary Tribunal to its suggestion that the limit should be as high as £100,000.
Back in 2010 the SRA proposed that it should have the same level of fining powers for traditional law firms as it does for alternative business structures - up to £250m for firms and £50m for individuals.
This was ruled out by the MoJ, but in a consultation published in January 2014 the regulator sought views on new limits of £10,000, £50,000 and £100,000 for 'traditional' firms.
In an update posted on its website, the regulator discloses that it now favours the lower of these limits, which it says most respondents to the consultation support.
'We believe that even a conservative increase in the level from the current £2,000 to £10,000 would have a positive impact on our ability to improve the speed and efficiency of the imposition of financial penalties as well as substantially reducing the costs borne by both parties,' it says.
'It is further evident that any such increase would further impact the number of cases dealt with by the SDT at first instance.'
In 2012, 87% of the fines imposed by the SDT were for £10,000 or less.
The SRA adds: 'Having carefully reviewed the responses to the consultation, we consider that it would now be appropriate for us to submit a business case to the MoJ seeking an increase in our current fining powers for traditional law firms from £2,000 to £10,000.
'We have given due consideration to the majority of respondents' views… best summarised by the City of London Law Society: "A moderate increase in fining powers to £10,000 is appropriate and represents an equitable balance between the saving of costs and the maintenance of an independent, fair disciplinary process."'
In its annual report published earlier this week, the SDT reiterated its opposition to a potential increase in the SRA's fining powers to £100,000, warning that this 'could realistically result in a perception by the public and legal services providers that the SRA is acting as investigator, prosecutor, jury and sentencing judge'.