Factsheet: Scottish Government legal services measure
Updated 26 October 2023
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Economic Crime and Corporate Transparency Bill: The removal of the statutory cap on financial penalties for the Scottish Solicitors’ Discipline Tribunal in relation to economic crime matters.
Why is the government acting?
The UK regulator, the Office for Professional Body Anti-Money Laundering Supervision, has commented on the value of financial sanction available to the Scottish Solicitors’ Discipline Tribunal (SSDT) in respect of disciplinary matters relating to Scottish solicitors. Currently the SSDT may impose a maximum financial penalty of £10,000, as set out in the Solicitors (Scotland) Act 1980 (the 1980 Act). [footnote 1] To provide a comparison, the Solicitors Disciplinary Tribunal in England and Wales may impose an unlimited financial penalty. [footnote 2]
The crisis in Ukraine has put the legal services sector and regulatory regime in the spotlight, owing to the role the sector plays in upholding the sanctions regime. The legal services sector was assessed in HMT’s National Risk Assessment of money laundering and terrorist financing (2020) as at high risk of abuse for money laundering purposes, [footnote 3] and of risks such as fraud or breaches of sanctions legislation. The Scottish Government wants to ensure that legal services regulators have the powers they need to tackle economic crime.
What is the government going to do?
The government is removing the maximum financial penalty that the SSDT can direct a solicitor to pay for disciplinary matters relating to economic crime.
This change does not affect the SSDT’s current powers to impose non-monetary penalties, such as issuing a censure [footnote 4] or ordering that a solicitor be struck off. In terms the 1980 Act, [footnote 5] the Lord President of the Court of Session is required to approve the SSDT’s rules and procedure. The focused scope of this measure and the Court of Session’s oversight represent an appropriate safeguard that will guarantee the proportionate application of this power by the SSDT. In addition, any solicitors directed to pay a penalty will continue to have a right of appeal to the Court of Session.
Who will this apply to?
The removal of the statutory limit of financial penalties in relation to economic crime applies to the SSDT’s powers.
This will impact solicitors in Scotland.
When will this come into effect?
Implementation will proceed following Royal Assent of the bill.
Once the change comes into effect the SSDT will issue guidance on levels of financial penalty it can set, which will require Lord President’s approval.