Three more firms hit with AML fines by SRA, as changes loom

Three conveyancing firms have been fined by the Solicitors Regulation Authority over anti-money laundering breaches - in the same week as the government acknowledged these regulations should be changed. 

South Yorkshire firm HSR Law was fined £23,549 for failing to meet the requirements of the MLRs 2017, becoming one of dozens of firms who have been fined five-figure sums as the SRA has sought to enforce these regulations.

The SRA said it reviewed six live client files at HSR and found none of them contained ‘client and matter risk assessments’ (CMRAs).

‘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’, the SRA said.

‘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.’

Although the firm has since brought itself into compliance by confirming all files contain a client and matter risk assessment and staff had been re-trained on its CMRA process, the SRA said the nature of the misconduct at a firm which undertakes the majority of its work in conveyancing was ‘more serious’.

It also fined Greenwich firm Brown & Co. Solicitors £9,179 and Russells, a central London-based recognised sole practitioner, £9,656 for AML breaches.

Brown & Co failed to have in place a firm-wide risk assessment between June 2017 and October 2021, no policies, controls and procedures (PCP) between June 2017 and October 2021, non-compliant PCPs between October 2021 and December 2024, inadequate client and matter risk assessments between October 2021 and December 2024, and customer due diligence/enhanced customer due diligence failings on individual matters. It has taken steps to rectify its failures.

Russells had failed to have a firm-wide risk assessment in place from June 2017 to December 2022. But the SRA said it had been transparent and co-operated with its investigation, along with admitting and remedying the breaches.

The Treasury announced this week it is to introduce ‘clearer and more proportionate’ MLR after a government paper acknowledged AML checks are seen as a ‘major burden’ to law firms.