The Solicitors Regulations Authority (SRA) has spent much of 2025 levying increasingly sizeable fines on law firms that have failed to comply with their regulatory responsibilities under the Money Laundering Regulations.
In recent weeks we have seen fines of £120,000, £80,000 and £64,000 for non-compliance over numerous years with the SRA’s Codes of Conduct and the Money Laundering Regulations: the vast majority of firms fined have held the CQS accreditation, with some also holding the Lexcel accreditation.
In most cases, the firms fined admitted fault, and the SRA acknowledged there was ‘no evidence’ of harm to consumers or third parties; the fines levied were considered to be a ‘credible deterrent to others.’
In a recent LinkedIn post responding to a law firm being fined £64,000, Brian Rogers, regulatory director at Access Legal, wrote:
“Based on figures I have used in previous posts (£300ph x 5 hours pw), this firm could have been better off by over £400,000 over the six years for ignoring its AML obligations and focusing on fee earning (as with previous firms, I am not saying this firm actively chose non-compliance over compliance).
“Even if the figures were £300ph x 1 hour pw, the firm would still have been £29,600 better off being non-compliant over the six years!
“As I have said before, I am not condoning non-compliance, but when you look at the above figures you can see why some firms may be tempted to choose the non-compliance road!”
Speaking to Today’s Conveyancer, Rogers added the SRA chief executive has said in the past that he did not want firms to see fines as a ‘cost of doing business’, and would act as appropriate should he do so.
“We have not yet seen any evidence to show that any firm has in fact ignored their regulatory obligations because they saw it as more profitable to be non-compliant – but when you look at the figures it can be seen why some may view it as a viable option.
“I used to say “If you think compliance is costly, try non-compliance”, but when you look at the fines and periods of non-compliance we have recently seen, some may think, “If you think compliance isn’t profitable, try non-compliance”, is more appropriate!
“Unlimited fines are on their way, and as the SRA’s CEO had already picked up on some firms potentially seeing fines as a cost of doing business, I suspect he will set them at a level that will deter firms from thinking non-compliance is more profitable than compliance?”
The SRA recently fined Nurul Miah, the former owner and manager of London-based law firm Kingly Solicitors over £4m for ‘serious’ and ‘intentional’ misconduct; an investigation revealing 310 improper transfers from client accounts to companies linked to Mr Miah, which it says were used for ‘inappropriate purposes’ such as loan repayments and to buy assets unrelated to the business.
Miah had already been declared bankrupt so the fines will never be paid says Rogers, but the regulator clearly wanted to send out a message to deter similar conduct in the future.
The SRA has for many years had the power to fine Alternative Business Structures (ABS) up to £250 million for the entity and £50 million for individuals, which is why there have been fines above the normal non-ABS fining limit of £25,000, a level set a few years ago.
When unlimited fines are eventually used by the SRA it will be interesting to see at what level these are set, but when you look at the ‘cost of doing business’ concern, they could be very high to deter such thinking concludes Rogers.
