Dentons challenge to AML ruling reaches Court of Appeal

International firm Dentons’ fight over historical alleged breaches of money laundering rules reached the Court of Appeal today. 

The Solicitors Disciplinary Tribunal originally dismissed charges that Dentons had breached money laundering regulations through its retention of a client, inherited following a merger, from 2013 to 2017. The firm denied all allegations. However the Solicitors Regulation Authority successfully appealed the SDT’s decision. The High Court ruled last year that, although the SDT found the firm’s breach was ‘inadvertent and committed in good faith’ this 'did not justify' the dismissal of the allegation. The High Court also found the SRA was entitled to ‘reasonable costs’ of the first tribunal hearing.

Dentons appealed. In its written submissions it argues that the ‘considerations of seriousness, culpability and reprehensibility’ are … inherent in the SRA’s conduct rules, and that the tribunal is entitled to take them into account.’

Richard Coleman KC, for Dentons, reminded the court the appeal was ‘concerned with conduct rules’. He said: ‘It is inherent in professional conduct rules relating to solicitors that they are concerned with any serious and reprehensible conduct [which has] long been a position in common law.’

The purpose of protecting the public and maintaining public confidence in the profession ‘is not served by treating every breach of rule or regulation, whether serious or not, as a matter of misconduct’, Coleman added.

‘So far as money laundering regulations specifically are concerned, the SRA’s own guidance states in terms only serious breaches need to be reported to the SRA. In other words, only serious breaches may be subject to regulatory action.’

It was ‘entirely right and appropriate’ that the SDT had discretion ‘and exercised that discretion to dismiss the allegation’ and to find it was a ‘less than serious rule breach’, Coleman added.

Dentons also argues that the High Court judge ‘was not entitled to remit any question in relation to principle 6 or 8 to the tribunal’ and challenge the judge’s decision to set aside the SDT’s order in relation to costs, ‘which was that there had been no order as to costs and ordered the firm to pay the SRA’s costs’ in relation to the SDT proceedings. Coleman told the court that whatever view is taken on the point of law, the ‘appropriate response would simply be to declare there had been a breach of principle 7 and outcome 7.5 but not to remit the case for further consideration’.

The hearing, which is listed for two days before Lord Justice Bean, vice president of the Court of Appeal civil division, Lord Justice Jeremy Baker and Lord Justice Zacaroli, continues.