The Structural problems at the Solicitors Regulation Authority

By Matthew Parish

Executive Chairman, Ukraine Development Trust

In England and Wales the Solicitors Regulation Authority (the SRA) sits in an awkward constitutional position. It is not a government department, yet she exercises public power. It is funded not by general taxation, but by compulsory levies on the very profession it regulates. It is expected to protect consumers, support the rule of law and maintain confidence in legal services, while also acting as investigator, prosecutor and, increasingly, a policy actor in areas that Parliament did not originally frame as the core of solicitor regulation. That combination of functions can work, but only if the regulator’s mandate is tightly defined, its standards are clear, its costs are proportionate, and its accountability is more than rhetorical.

The present calls for reform reflect a growing sense that these conditions are not being met.

The drift from rules to overarching powers

A recurring complaint is not simply that the SRA has become tougher, but that it has become broader. Critics argue that it has developed an appetite for overarching powers that were not clearly anticipated by legislation, achieved less through explicit parliamentary design than through the accretion of guidance, warning notices, thematic “expectations”, and an expansive reading of principles such as “integrity”. The SRA’s own guidance makes plain that “integrity” is wider than dishonesty, capturing conduct that may be neither fraudulent nor criminal, but still deemed professionally unacceptable. 

For solicitors the practical consequence is uncertainty. When a standard is elastic, it becomes difficult to advise on compliance ex ante, yet easy to allege breach ex post. A rule-based regime tells you what you must do. A principles regime tells you what you ought to have done, after the fact, through the lens of an outcome that may already have become politically or socially salient.

This concern sharpens when the regulator steps into contested territory: speech, reputation management, strategic litigation, anti-money laundering, or the boundaries of “without prejudice” communications. In such areas the difference between zealous representation and professional misconduct is often a matter of degree and context. When the SRA’s interpretive line is unclear, the legal profession will experience regulation not as consumer protection, but as chill.

The cost problem — and who ultimately pays

Even a perfectly calibrated regulator can price itself out of legitimacy if it is too expensive. The SRA’s business plan for 2025–26 states an overall funding requirement of £168.4 million, financed partly by an increased SRA portion of the individual practising certificate fee and partly by charges on regulated firms based on turnover.  Its Board paper on practising fees for 2025–26 sets out the structure of the practising certificate renewal fee and related contributions. 

Whatever the internal accounting, the economic reality is simple: these are compulsory costs imposed on a profession that must recover overheads through billing. The “regulator’s budget” is not an abstract line item. It is a component of the price of legal services. When practising fees rise or compliance burdens multiply, the costs are passed from solicitor to client, and disproportionately so: smaller firms and legal aid practices may feel a regulatory pound more keenly than City partnerships with deep administrative capacity.

The legitimacy question is therefore inseparable from the value question. If the SRA’s expanding remit and enforcement style are producing clearer standards, better consumer outcomes and fewer major firm collapses, the argument for cost may be sustainable. If not, the profession will see herself as a compulsory subscription to a service of doubtful utility.

That scepticism has been intensified by the succession of high-profile firm failures and client-account scandals in recent years — events that, in the public mind, should be the regulator’s core competence. Consultation material on the SRA’s budget has recorded pointed comments from respondents contending that the regulator has failed to prevent firm collapses on an unprecedented scale, while still requiring the profession to carry the financial burden. 

Enforcement, deference, and the tribunal problem

A second front in the reform debate concerns the relationship between the SRA and the Solicitors Disciplinary Tribunal (the SDT). Formally, the SDT is independent: the SRA prosecutes, the tribunal decides. The SRA’s own public materials emphasise that a decision to prosecute is not a finding of non-compliance and that the tribunal determines whether allegations are proved to the necessary standard. 

Yet in practice many solicitors perceive a structural tilt. The regulator has investigatory resources, information advantages, and the ability to select cases that are strategically useful to its policy objectives. The individual respondent often faces existential financial risk — not just sanctions, but costs. In disciplinary proceedings, costs can become a second penalty, one that can dwarf the fine and make “fighting on principle” a luxury available only to the very well funded.

Recent litigation has injected new urgency into this discussion. In the Hurst matter — involving an Osborne Clarke partner and communications connected to public commentary on a politician’s tax affairs — the High Court overturned the SDT’s decision and the finding of professional misconduct, while commentary in the legal press framed the result as a significant judicial rebuke. The SDT has since issued a public statement indicating that it accepts the High Court’s findings and is reviewing the judge’s observations. Reports also highlight the scale of costs at stake, including the SDT’s original costs award and subsequent costs consequences. 

Two reform themes follow.

First, if a tribunal is repeatedly corrected for inadequate reasoning or misdirection in cases brought by the regulator, confidence in the disciplinary system suffers — both public confidence and practitioner confidence. A system that appears to begin from a presumption that the regulator’s narrative is correct becomes, in effect, a ratifying chamber rather than an adjudicative safeguard.

Secondly, the costs regime becomes an instrument of regulatory power in its own right. A solicitor who may ultimately win on appeal can still be financially ruined by the process. That risk encourages settlement, agreed outcomes and admissions — not necessarily because the allegations are well founded, but because the gamble is intolerable.

When critics speak of “deference” to allegations, this is often what they mean: not that the SDT always finds against respondents, but that the procedural and economic structure makes the regulator’s allegation itself a form of punishment.

Vague standards and the integrity trap

The phrase “lack of integrity” has become a focal point because it is both potent and slippery. It can capture serious ethical failure, but it can also become a label for conduct that is unpopular, politically sensitive, or retrospectively judged unwise. The SRA’s own guidance concedes that integrity is broader than dishonesty.  That breadth is precisely what makes the principle dangerous as a disciplinary tool.

A well-designed regulatory regime distinguishes between:

• Clear prohibitions that protect clients and the courts (misuse of client money, dishonesty, obstruction of justice)

• Competence standards that are capable of objective assessment

• Professional judgement issues where context is everything and where the sanction should be proportionate and predictable

When a broad principle substitutes for a clear rule, the solicitor is asked to navigate not a map but a mood. That is especially fraught in high-profile matters touching freedom of expression and reputation control. The SRA has issued warning notices and thematic work on strategic lawsuits against public participation (SLAPPs). Few would dispute the public interest in curbing abusive litigation tactics. But if the boundary between robust pre-action correspondence and misconduct is defined too expansively, regulation risks becoming an indirect speech code — administered not by Parliament and courts, but by a professional regulator whose incentives are shaped by reputational pressures and media cycles.

Unlimited fining powers and the anxiety of scale

The argument about “powers not anticipated by legislation” is not merely rhetorical. The SRA has explicitly linked its penalty framework to the Economic Crime and Corporate Transparency Act, granting unlimited fining powers in cases of economic crime and has consulted on updating its approach to financial penalties in that context. In parallel professional bodies have raised concerns about the design and proportionality of the fining scheme proposed in consultations. 

Here the reform question is not whether economic crime should be taken seriously — it should — but whether the concentration of punitive power inside a body funded by the regulated community creates perverse incentives. A regulator under budget pressure may be tempted to see enforcement as a revenue-adjacent activity, even if formally separated from fee-setting. Moreover the threat of very large penalties can drive defensive lawyering: a culture of over-reporting, over-checking and refusing marginal clients, which may reduce risk but also reduce access to legal services for those who most need representation.

Politics, populism, and the regulator as target

Once a regulator is perceived as costly, expansive and vague, it becomes a natural target for political attack — particularly from movements that treat “regulators” as a class problem. The legal trade press has already reported the SRA being placed on a political “hit list” in domestic debate about quangos and reform. Even where such rhetoric is opportunistic, it feeds a wider point: the SRA’s legitimacy ultimately rests upon a bargain with the profession and the public. If she looks like a self-authorising institution, that bargain frays.

The Law Society itself has publicly urged the SRA to focus on its core role — setting standards, acting on risk, taking action in response to non-compliance and protecting consumers — a message that signals tension within the regulatory settlement. 

What reform might actually look like

Calls for “reform” can be a slogan. The hard question is which reforms improve consumer protection without turning the regulator into either a toothless trade body or an unaccountable prosecutor.

A credible programme would likely include five elements.

1. Statutory clarity about remit — Parliament should define the boundary between core regulatory functions and policy activism, with tighter constraints on the use of guidance and warning notices as quasi-law.

   
   

2. A clearer hierarchy of standards — broad principles should be anchored to illustrative rules and safe harbours, so that solicitors can predict outcomes and clients can understand expectations.

   
   

3. Costs discipline and budget transparency — the SRA’s funding requirement and fee trajectory may be justifiable, but it must demonstrate that increases correspond to measurable improvements in consumer protection, not merely to the expansion of internal machinery. 

   
   

4. Tribunal resilience — the SDT must be visibly independent, analytically rigorous and willing to reject weak cases early. Post-Hurst introspection (the early 2026 case where the SDT was condemned for ambiguous condemnation of solicitors' correspondence) is welcome, but it must lead to procedural safeguards that prevent reputational punishment by allegation. 

   
   

5. Separation of functions — stronger internal firewalls between investigation, prosecution, policy and communications would reduce the risk that the regulator’s public messaging shapes disciplinary outcomes or creates pressure for symbolic cases.

None of this requires the SRA to be timid. A confident regulator is not one who prosecutes more — it is one who prosecutes better, more predictably, and with a sense of constitutional restraint.

The deeper point — legitimacy is not optional

In wartime Ukraine, where this author lives, one learns quickly that institutions do not survive on paper alone. They survive on trust earned through restraint, competence, and a visible sense of serving something larger than themselves. England’s legal system has long claimed that the independence of the profession is one of the public’s protections against arbitrary power. A regulator who appears arbitrary, or who becomes indistinguishable from a prosecutorial authority with self-generated norms, weakens that claim.

Reforming the SRA is therefore not a niche solicitor grievance. It is a question about the architecture of legality: how a society delegates coercive authority, how it prices justice, and how it keeps those who regulate the rule of law within the rule of law.