Welcome to the Regulation & Compliance Office’s fortnightly roundup, where we look at all the latest stories to keep you ahead and informed in the world of law and compliance.
The RACO roundup is just another way in which we keep the solicitors and other law professionals we work with in the know, so we can ascertain that you are never missing the vital developments occurring in your profession.
Below, you will find the most recent headlines selected by our compliance experts, followed by a Security Section, where we will also give you an overview of the latest scams currently impacting solicitors and their clients.
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NEW AML RULES FOR LAW FIRMS, GOVERNMENT PLEDGES
As part of its newly published industrial strategy, the Government has pledged to bring forward a package of changes to money laundering regulations by the end of this year, it was revealed this week.
The revised regulations, which will be introduced by the Treasury, will be “clearer and more proportionate” and form part of plans to accelerate the professional services sector. The recently published industrial strategy also identified the legal sector both as one of the UK’s most thriving areas of growth and one that needs to modernise desperately.
Recently, the profession as a whole has been subject to the crusade of steepening financial sanctions, which the Law Gazette has been publicly referring to as the “blitz of money laundering regulations” (more here). Regulations have tightened considerably over the last decade, leaving dozens of firms with fines of up to five figures.
According to the Government’s new strategy, MLRs remain a crucial instrument in safeguarding against money laundering and terrorist financing risks in the professional services sector. The strategy, however, also notes that regulations must be proportionate to the risks involved and that AML checks are often perceived as a burden by many law firms.
There are currently no details concerning what the supposed regulation changes will be, only that the Treasury will soon reveal further changes that will improve them and increase their effectiveness. The Government’s strategy also discusses the prospect of “embracing digital technology to streamline checks and processes for firms and clients”.
Regulatory Updates for Law Firms
According to the Government, some regulators “are not consistently aligned” with its ambitions concerning economic growth, and it has further pledged to “explore measures” that will ensure occupational regulators have a clear set of streamlined duties. These proposed measures aim to steer the focus toward “investment and growth” by providing clear processes and published timelines for growth-related decisions while holding regulators accountable for their performance.
The Government acknowledges that the legal sector is one of the fastest adopters of the latest technological advances, particularly in AI, praising the law tech sector in particular, which boasts over 350 companies and attracted £5.5bn of investment in 2023.
In 2024 alone, it contributed £42.6 billion to the economy and posted a trade surplus of £7.4 billion. Regardless, growth in the legal sector still faces considerable obstacles, including a mounting need for technology and AI upskilling to keep pace with advancements.
“Modernising court infrastructure to include digital tools, such as AI and advanced case management systems, can enhance the operation of courts and secure the UK’s leadership in specialist areas.”
“SMEs in particular struggle with technology adoption and capital for R&D investment. Market access abroad is challenged by business mobility restrictions and practice barriers. Investment in the physical state of courts and addressing court backlogs is important for investor confidence and business efficiency.”
Speaking on the reforms, Richard Atkinson, president of the Law Society, stated: “We support a regulatory approach that values the expertise and integrity of the legal sector while ensuring the AML obligations are streamlined, coherent and fair.”
Atkinson added, “Legal professionals are committed to fighting financial crime, but compliance measures must be proportionate, targeted and risk-based to be effective without stifling access to justice or placing undue strain and financial cost on firms and practitioners.”
Read full article here.
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SRA Disciplinary Defence: What Solicitors Must Know About Public Outcomes
What to Expect When Facing SRA Investigations and Disciplinary Proceedings
No solicitor or firm wants to be the subject of an enquiry from the Solicitors Regulation Authority (SRA) or face a hearing before the Solicitors Disciplinary Tribunal (SDT). However, with increasing scrutiny from the regulators, these situations are becoming more common.
When they do arise, an enquiry or investigation can present significant challenges for law firms and individuals and result in serious consequences, both professionally and personally.
Whether the matter begins with an internal investigation, has been initiated by the SRA, or has already been referred to the SDT, at the Regulation and Compliance Office (RACO), we will be ready to support any firm or individual, no matter at what stage of the process we are instructed.
Our aim is always to provide calm, clear and practical support, but our services are designed to help prevent these matters from reaching that point in the first place.
In a follow-up to our previous article, ‘Navigating SRA Enquiries and Investigations’, we look at the recent increase in SRA investigations and SDT cases, as well as the SRA’s preference for publication over privacy.
The SRA Does Not Like to Do Things in Secret
One of the key aspects of a decision following an investigation or tribunal is the amount of information the SRA and SDT choose to publish. If you or your firm is under investigation or facing a tribunal, it might not remain a private matter.
The SRA publishes disciplinary decisions as a matter of routine, and the most recently published regulatory decisions are available on the SRA website at https://www.sra.org.uk/consumers/solicitor-check/recent-decisions/. The SDT, meanwhile, will also publish its latest judgments and recent cases, providing detailed reasons and findings on facts surrounding the case: https://solicitorstribunal.org.uk/judgments/.
The rationale for publishing is not to punish or humiliate but to provide transparency, uphold public confidence, and protect the profession’s reputation. This approach is supported by the courts, as highlighted by a recent case. A solicitor who was struck off requested that their identity be withheld, but the Court of Appeal dismissed this request. Transparency, the court said, remains essential to maintaining trust in the profession. You can read the full story in the Law Gazette here: Struck-off solicitor’s anonymity attempts in appeal are dismissed.
Over the last few months, the industry has seen an increase in anonymity applications, particularly in serious misconduct cases being handled by the SRA and SDT. While a decision to grant anonymity is considered in some cases, it would only be in exceptional circumstances. Read more about this in Legal Futures here: Sexual misconduct cases “lead to rise in SDT anonymity requests”.
The SRA confirms that there are several factors that determine whether it will publish a decision, including:
- Why the decision was made.
- The type of decision.
- If it is in the public interest to publish it.
To read more about the regulator’s approach to publishing its decisions, see: guidance on publishing regulatory and disciplinary decisions.
Support and Defence from Experts Who Understand the Pressure
At RACO, our regulatory defence and disciplinary support consultants understand what is at stake personally and professionally if you or your firm is facing an investigation by the SRA.
We have a proven track record of delivering honest, pragmatic advice and building strategies that ensure any breach is managed correctly and the engagement with the SRA is controlled and measured. Whilst we cannot guarantee an outcome, we can help to prepare the case, the firm, and the individual for any sanctions that may follow.
We provide tailored services that deal with the following:
- SRA Enquiries
- Self-Reporting – including for the SRA, ICO, CLC, CILEX
- Solicitor Disciplinary Tribunal Support
- Regulatory Settlement Agreements
- Agreed Outcomes – Statements and Judgments
Regardless of the reason for engagement with the regulator, RACO has helped support multiple law firms and individuals in addressing and overcoming issues.
Conclusion – Prevention is Better Than Cure
While we are there to provide guidance and support when things go wrong, much of our work is focused on helping firms avoid issues in the first place.
At RACO, our compliance experts support hundreds of firms with ongoing compliance. That includes anti-money laundering (AML) processes, audits, risk assessments, staff training and systems reviews.
Our approach helps firms stay ahead of their regulatory obligations, reducing the risk of receiving unwanted attention from the SRA. Learn more about our full suite of compliance products, outsourced compliance management, and law firm consultancy services:
- Regulatory Compliance and Risk Management Services for Law Firms
- Due Diligence & Risk Assessment Services for Law Firms – Outsourced solution for Client Due Diligence and Risk Assessment
- Law Firm Management Consultancy
If The SRA Has Contacted You, Talk to Us
Whether you are at the beginning of an internal investigation, responding to an investigation initiated by the SRA, or dealing with a matter that has already been referred to the SDT, RACO is available to support any firm or individual.
The appointment of an independent party often results in quicker resolutions. At RACO, our regulatory defence specialists are ready to assist at any stage of the process.
If you have already been notified of an investigation, please contact us today on our emergency line at 0203 947 3690, and we can offer immediate guidance and support on the next steps.
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A WARNING TO CONVEYANCING FIRMS
In the same week that the government acknowledged the regulations should be changed, a total of three conveyancing firms were fined by the Solicitors Regulation Authority for AML breaches.
A firm based in South Yorkshire was fined £23,549 for failing to meet the requirements of the MLRs 2017, placing them alongside dozens of firms who have also recently been fined five-figure sums.
Commenting on the investigation, the SRA released a statement claiming to have reviewed six of the firm’s live client files, finding that none of them contained client and matter risk assessments (CMRAs).
The SRA wrote: “It appears that no risk assessment took place at the start of each matter (or monitoring throughout), to show the file handler had considered the risks of both the client and matter and therefore documented the correct level of customer due diligence.”
“In an email from the firm dated 20 December 2024, it was explained that some of the fee earners were not in the habit of completing a CMRA in every instance and that the firm had failed to detect this shortcoming.”
SRA AML CLAMPDOWN ON LAW FIRMS
Despite bringing itself into compliance by training its staff accordingly and confirming that all files contained a client and matter risk assessment, the SRA stated that the nature of the misconduct at a firm that undertakes the majority of its work in conveyancing was concerning.
It also fined a Greenwich-based firm:
- £9,179 – and a central London-based recognised sole practitioner,
- £9,656 for AML breaches.
The firm based in Greenwich is now understood to have failed to have in place
- a firm-wide risk assessment between 2017 and 2021,
- policies, controls and procedures between 2017 and 2021,
- non-compliant PCPs between 2021 and 2024,
- inadequate client and matter risk assessments between 2021 and 2024,
- customer due diligence/enhanced customer due diligence on individual matters.
The central London-based firm, on the other hand, failed to have a firm-wide risk assessment in place from 2017 to 2022.
Read full article here.
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S C A M A L E R T S
Commercial tenancy agreement and letter falsely claiming to be sent from ‘Nishanthan Chandan Solicitors’
The SRA has reported that a commercial lease agreement and a letter falsely claiming to be from ‘Nishanthan Chandan Solicitors’ have been sent to an energy company.
The commercial lease agreement contains a ‘stamp’ that includes the name and SRA number of a genuine solicitor and provides the email address ‘Nishanthansolicitors.co.uk’. The letter accompanying the agreement misused the postal address of a genuine firm of solicitors.
The documents were sent to the recipient by email. The email was sent from the email address’ ‘info@nishanthansolicitors.co.uk’ and provided a website address of ‘www.nishanthansolicitors.co.uk’.
Please note that the SRA does not authorise or regulate a firm of solicitors called ‘Nishanthan Chandan Solicitors’. Therefore, any business or transaction through the above email addresses and the website address is not undertaken by a firm or solicitor authorised and regulated by the SRA.
Please note also that the SRA does authorise and regulate a genuine solicitor called Nishanthan Chandan with the SRA number: 825507. The genuine Nishanthan Chandan has confirmed that he has no connection to the above matter.
The SRA also authorises and regulates a genuine firm of solicitors called TTS Legal Ltd. Its postal address is 1 – 4 The Parade, Monarch Way, Ilford, Essex, IG2 7HT. The genuine firm of TTS Legal Ltd has confirmed that it also has no connection to the above matter.
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Facebook job advertisement posts misusing the name of CMS Cameron McKenna Nabarro Olswang LLP
The SRA has reported via its website that false job advertisement posts have been made on Facebook, misusing the trading name of a genuine firm of solicitors and impersonating an individual who works at one of their member firms.
The SRA reported that a third party is making false job advertisements on Facebook under the names of ‘Sarah Erwin’ and/or ‘Patti Britton’. It has been advised that these individuals offer to put prospective applicants in touch with Amanda Lietz from CMS Cameron McKenna Nabarro Olswang member firm ‘CMS Legal Services EEIG’ who are not regulated by the SRA.
We understand that CMS Cameron McKenna Nabarro Olswang LLP’s logo and photos are also being appropriated from its legitimate website and sent to prospective applicants on Facebook, claiming to be a company registered in California and regulated by the Solicitors Regulatory Authority.
Please note that any business or transaction through CMSFIRM4@outlook.com is not undertaken by a firm or individual authorised and regulated by the SRA. The SRA authorises and regulates a genuine firm of solicitors, CMS Cameron McKenna Nabarro Olswang LLP. Emails from the genuine firm use the domain ‘@cms-cmno.com’.
The genuine firm has confirmed that neither they nor Amanda Lietz has any connection to the job advertisement posts referred to above.
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Document misusing the name and logo of Mortimer Clarke Solicitors Ltd
The SRA has reported via its website that a document titled ‘Client intake form’ has been sent to a member of the public from an individual called ‘Graham Steve’ claiming to be a solicitor at the genuine firm.
Please note that the SRA does not authorise or regulate an individual named ‘Graham Steve’.
Any business or transaction through ‘Graham Steve’ is not undertaken by a firm or a solicitor authorised by the SRA. The SRA does, however, authorise and regulate a genuine firm of solicitors called Mortimer Clarke Solicitors Ltd.
Mortimer Clarke Solicitors Ltd has confirmed that it does not have any genuine and intended connection to the document referred to in the above alert. Mortimer Clarke Solicitors Ltd has also confirmed that it does not employ a staff member called ‘Graham Steve’.
BEEN CONTACTED?
Here’s What to Do…
When a firm’s or an individual’s identity has been copied or cloned, due diligence is necessary. If you receive correspondence you believe to be suspicious, you should conduct your own due diligence by checking the authenticity of the correspondence by contacting the law firm directly by reliable and established means.
You can also contact the SRA directly to find out if individuals or firms are regulated and authorised by the SRA and verify an individual’s or firm’s practising details. Other verification methods, such as checking public records (e.g. telephone directories and company records), may be required in other circumstances.
Compliance Support for Law Firms
We at RACO are always at hand to provide tailored guidance to help you make the most informed and beneficial decisions. We help you understand the recurrent regulatory shifts and work with you to provide solutions. With our team of professional specialists and our renowned legal expertise, we can work with your firm to ensure you are never left unprepared in the wake of legal changes or cyber threats.
For more information on how we can help, call our consultants on 0203 985 8550 or email us at info@regulationandcomplianceoffice.co.uk
