Hi and happy Friday!
This week’s COLP Insider has three new articles for you, each one tackling a different (but very familiar) compliance headache.
We start with mistakes. Most errors in practice are survivable. The danger is the moment someone tries to cover up the mistake. Nobody would condone dishonesty, but can we really dismiss these people as “bad apples”? Are there some more difficult questions we should be asking about what makes these people resort to career-ending actions?
In our second piece, where we’ve pulled out 12 observations from the SRA’s compliance officer thematic review. The sample size is smaller than you might expect, but the themes are very interesting, and we’re going to talk about it live in our free webinar on 25 February.
And then there’s the story of poor old Alison, a fictional COFA who does what many sensible people do: she relies on a polished reconciliation pack produced by finance-qualified colleagues. Until the reporting accountant arrives and it turns out the numbers don’t actually reconcile. It’s a reminder for anyone in a similar position to sign up the next month’s COFA Masterclass.
In the news, the SRA’s intervention into PM Law raises fresh questions about client money protection and the pressure on the Compensation Fund. We also flag the Legal Ombudsman’s latest data on rising complaints, push back on the MoJ’s “interest on client account” proposal, and the SRA’s new reporting form.
And in a bit of JBL news, from early March you should start seeing a new website, new courses, new content – we hope you like it.
‘Til next time!
Jon and the team.
P.S. As part of our ongoing rebrand, we are going to be having a look at the design of this newsletter. What would you like to see more of? Less of? How could it be more helpful?
Mistakes rarely end a career, but the cover-up will
A missed deadline. A forgotten hearing. A file that quietly slips to the bottom of the pile. None of that will be career-ending. But the moment someone tries to conceal the error, the mistake stops being a mistake and starts looking like dishonesty – and the SRA and SDT treat that as a striking off offence. This post explores why otherwise decent, diligent lawyers, often at the start of their career, sometimes make those poor decisions, and what firms can do to make it easier to hold your hands up early.
12 things we learned from the SRA Compliance Officer thematic review
The SRA’s compliance officer thematic review is one of those documents that looks modest, but is quietly important. That’s why we decided to do a webinar on this topic on 25 February.
In this post we have pulled out 12 findings that every firm should take away from the thematic review.
A tale of the COFA who trusted the numbers too much
In this fictional tale, new COFA Alison does everything that looks sensible on paper: she asks for a monthly client account reconciliation pack, reads the narrative, challenges the odd-looking item, and signs off because the numbers are coming from finance-qualified people in a “slick” system.
Then the reporting accountant arrives and the illusion collapses. A reconciliation that always “looked” right doesn’t actually reconcile. The report is qualified, the firm has to self-report, and Alison spends the next two years living in that horrible space between “this might be nothing” and “I might be in serious trouble”.
It’s a reminder that COFAs can delegate tasks, but not understanding. And lack of understanding is a risk personal risk.
Read the article and register for the COFA Masterclass
News and guidance
Has client money gone missing at collapsed firm PM Law?
The SRA has issued an update confirming it is investigating suspected fraud linked to the sudden closure of PM Law Ltd, including potential misappropriation of client money. The regulator says it was alerted on Monday 2 February 2026, launched an immediate investigation, and intervened into the firm on 4 February alongside its intervention agent, Gordons LLP, taking possession of files and money held by the firm. The SRA says it has shared information with law enforcement and is prioritising Compensation Fund applications where clients have urgent need (including emergency grants to enable completions), but will not comment further while the investigation is live.
We could be looking at another large scale failure with significant client losses. The already creaking Compensation Fund will be under yet further strain.
Legal Ombudsman’s (LeO) latest quarterly data reveals huge rise in complaints
The Legal Ombudsman has published its Quarter 3 (2025/26) complaints data, showing a sharp rise in demand. LeO received 3,496 new complaints in the quarter (up 37% on the same quarter last year) and says overall demand across the first three quarters of 2025/26 is up 29.8%; it now expects more than 14,000 complaints this financial year.
Are services getting worse across the profession, or are the barriers to complaint being lowered by AI?
MoJ “ILCA” proposal: interest on client account in the firing line
The Law Society has warned that the Ministry of Justice’s proposed “Interest on Lawyers’ Client Accounts” (ILCA) scheme could hit high street firms hard, drive up costs, and ultimately reduce access to justice. The MoJ consulted on diverting interest earned on law firms’ client accounts into a central fund for the MoJ budget (rather than being earmarked for access-to-justice projects).
The Law Society’s critique focuses on the practical and regulatory knock-ons: the proposal (as described) would take 75% of interest overall, while still leaving firms potentially responsible for paying some interest to some clients; it would also take 50% of interest from individual client accounts (which the Law Society says are often used to hold damages for seriously injured clients), and it raises concerns about added bureaucracy, potential confidentiality issues in sharing account information with an MoJ administrator, and awkward boundary questions if the scheme applies only to funds linked to reserved activities.
There is still time to have your say about the MoJ proposals by answering a few quick questions on this survey.
The SRA has launched a new reporting form for misconduct/self-reporting, replacing the previous form some firms may have saved and reused. The regulator says the updated form is designed to make reporting easier and to help people work out whether the SRA is the right organisation to contact in the first place.
The reporting form is the main way to initiate regulatory concerns, whether from members of the public, reports about other solicitors, or reporting breaches concerning your own firm. We have recently raised with the SRA that the regulator should consider alternative ways for firms to initiate a conversation about concerns – going straight to formal breach reporting could deter firms from seeking support earlier. For example, firms in financial difficulties but not yet “unstable”.
Law Society: LSB must keep tightening oversight to prevent consumer harm
The Law Society has urged the Legal Services Board (LSB) to continue strengthening its oversight of frontline regulators, arguing this is essential to prevent repeat “system shocks” that leave consumers exposed (with Axiom Ince and SSB cited as examples of the scale of potential harm – we probably need to throw PM Law into the mix too).
The statement lands against a broader backdrop of debate about what the LSB is for at all. Some in the profession question whether the oversight layer adds meaningful value (or simply cost and complexity), and there has been recent scrutiny of the LSB’s effectiveness and remit. The MoJ has announced a performance review of the LSB.
Compliance corner: Help – which SRA authorisation forms do we actually need?
Q: We are looking to acquire a small firm. I am utterly confused by which SRA authorisation forms to complete. Can you give me a simple way to think about it?
A: You are not alone. The confusion usually comes from the fact that there are three main overlapping issues: (1) changes to the firm’s authorisation (what type of entity it is, and what permissions it needs), (2) approvals/notifications for people and owners (who will control or manage the firm), and (3) the AML supervision piece (because Money Laundering Regulations supervision has its own reporting requirements).
Over the years, we have learned that if you keep those three boxes separate, the forms become much easier.
Firm authorisation: are we changing what the firm is?
FA1 – firm authorisation / conversion – This is the “big” application and takes the most time to process through the SRA (allow 3-6 months). Use this when the firm needs new authorisation, or you are converting its authorisation type (most commonly, recognised body to licensed body/ABS). In practical terms, the classic trigger is introducing non-lawyer/corporate ownership or non-lawyer “managers” (director/partner/LLP member) into the regulated entity. If you are keeping the target as a solicitor-only ownership/management structure on day one, you often avoid FA1 entirely.
People and ownership: who needs approval, and who just needs notifying?
This is the bit that catches most acquirers out. Your job is to list every post-completion manager, owner, and compliance officer (COLP/COFA), then decide whether each one needs full SRA approval or can be handled via a deemed approval notification route.
FA2 – individual approval (the “long route”) – Use FA2 when an individual needs SRA approval as a manager/owner/compliance officer and they are not eligible for deemed approval. This is the default route for non-lawyer managers/owners, and it is also the fallback for solicitors if deemed approval is not available (see Rule 13 Authorisation of Firms Rules for the deeming criteria).
FA3 – corporate owner/manager approval – Use FA3 when a corporate entity is becoming an owner or manager. Expect to provide a clear structure chart and a “look-through” analysis showing ultimate ownership and effective interests, not just the immediate shareholder.
FA4 – deemed approval notification (manager/owner changes) – Use FA4 where a solicitor (or other eligible authorised person) is becoming a manager/owner and can rely on the deemed approval route (so you are notifying the SRA, rather than asking for full approval).
FA6 – deemed approval notification (COLP/COFA appointments) – Use FA6 where a COLP/COFA appointment is eligible for deemed approval and the SRA route is the short form confirmation/notification. A key practical point: deemed approval for compliance officers is not always available (for example, it is never available where the firm’s turnover exceeds £600k).
Other forms that may be relevant in acquisitions
FA8 – financial services exemption / insurance distribution notifications – Use this if the firm will rely on the financial services exemption (Part XX of FSMA) and/or will carry on insurance distribution activity. This form essentially tells the SRA to update the FCA register, listing the firm as an Exempt Professional Firm. Treat it as a due diligence “spot check” item because if the firm should have been on the register but was not, it can prompt SRA enforcement later if missed.
FA9 – third-party managed account (TPMA) notifications – Use this if the firm uses a TPMA arrangement and needs to notify the SRA accordingly. Niche, but easy to miss unless you ask the right question during due diligence.
AML supervision: do we need FA10 or FA10B?
Separately from “authorisation of the firm” under the Legal Services Act framework, there is the SRA’s role as AML supervisor (where the firm is in scope of the Money Laundering Regulations).
FA10 – initial AML authorisation – Use this if the firm is not currently AML-authorised but will be carrying out in-scope services and therefore needs the SRA to supervise it for AML. Here you will tell the SRA about the firm’s in-scope services, its nominated officers and beneficial owners/officers/managers (BOOMs). Every BOOM needs a basic DBS check (or equivalent for international BOOMs).
FA10B – changes to AML authorisation – Use this where the firm is already AML-authorised and something is going to change post-acquisition: BOOMs, services in scope, or MLRO/MLCO details. In an acquisition, this is quite common because BOOMs and control positions can change even if the firm itself stays the same legal entity. Remember the practical admin: new BOOMs usually mean fresh basic DBS checks (and overseas equivalents where relevant), and they can only be maximum three months old, so there is a sequencing issue.
We are just becoming a successor practice
Often, the deal struck ends up with the acquired firm coming to an end, with the acquirer (or, more accurately, its insurer) taking the risk relating to the firm’s past claims liability. Most acquirers will only do this after extensive due diligence.
NA1 – notice of succession / turnover apportionment – If you transfer the practice into another authorised entity (or split/transfer part of it), you’ll generally need NA1 to notify the SRA about the succession and how turnover should be apportioned. It helps the SRA to keep track of where old files have been transferred.
Firm closure notification form (FCN) – tell the SRA the acquired firm is closing – Use the FCN to notify the SRA that the acquired firm is closing/ceasing to provide legal services and no longer needs to be authorised, including where the closure is happening because of an acquisition/merger with another authorised body. The FCN should be submitted no more than seven days before the intended closure date.
A simple way to sanity-check before you submit
Ask yourself five questions, in this order:
- Are we changing the firm’s fundamental structure or authorisation type (especially because of non-lawyer ownership/management)? If yes, think FA1.
- Who will be managers, owners, COLP and COFA on day one (and later, if staged)? Map each to FA2/FA3 (approval) or FA4/FA6 (deemed notification).
- Is the firm in scope of the Money Laundering Regulations and supervised by the SRA? If yes, decide FA10 vs FA10B.
- Are there any “extras” in the background (financial services exemption/insurance distribution, TPMA)? If yes, check FA8/FA9.
- Are we simply becoming a successor practice, with the acquired firm closing? If so, use the NA1 and FCN.
Need help with any SRA authorisations? We have over ten years’ experience in this area.
This is not legal advice. If you have a question you would like us to answer in this section, feel free to send it to info@jonathonbray.com
Free CPD
Registration now open: Free CPD webinar – SRA Compliance Officer Thematic Review
Wednesday 25 February | 12:00–1:00pm | Live on Zoom
In December, the SRA published its long-awaited thematic review into the effectiveness of COLPs and COFAs. It’s a quietly important document, not just about who holds the role, but how it works in practice.
In this free, one-hour live session, our team will unpack what the SRA was really testing for, what it found, and what it means for compliance officers in real firms..
We’ll cover:
- The headline findings from the SRA’s review
- What makes an effective COLP/COFA
- Common issues we see
There will be polls, scenarios, and live Q&A throughout. The session counts towards continuing competence and is suitable for COLPs, COFAs, partners, directors and anyone involved in firm-wide risk and governance.
Recording now available: Signing with confidence – mastering client account reconciliations for COFAs
We kicked off 2026 with our first webinar specifically for COFAs, focusing on one of the most critical controls in the SRA Accounts Rules.
Are you signing off your client account reconciliations with total confidence? It’s a COFA’s job to sign off on reconciliations, but knowing what to look for is where the challenge lies.
Sean and Liz (both ex-forensic investigators) covered the mechanics of a perfect reconciliation, common “horrors” and red flags to watch out for.
This was a not-to-be-missed session. So if you missed the session, here is your second chance.
Watch the recording here (passcode Passcode: c13kYgi%) – link expires in a few days.
Prefer in-person? We are running a COFA Masterclass on 25th March in London. Click here to book.
Alongside the training, we’re offering client account health-checks to stress-test your systems before the SRA (or your reporting accountant) does, and targeted projects to clear stubborn residual balances in a way that keeps both the regulator and clients happy. If your client account keeps you awake at night – or you’d like to make sure it doesn’t – we’d be very happy to talk.
Disciplinary Watch
Clayton Mott – AML fine of £7,464 after the SRA found the firm failed to maintain compliant AML policies, controls and procedures over a long period.
Stradbrooks Global Limited – FWRA failures. The firm agreed an £8,640 AML fine after the SRA concluded it did not have an adequate firm-wide risk assessment in place.
Burgh Thorpe Limited – no CMRAs on reviewed files. £12,798 AML fine where the SRA said that, in all six of the files it reviewed, the firm had not carried out client and matter risk assessments and had not followed its own AML policies, controls and procedures.
Castle Sanderson Limited – PCPs and CMRA failures. £10,462 AML fine following an SRA inspection which identified failures to keep AML PCPs under review and failures to complete client and matter risk assessments across multiple files (the SRA reference is to 34 files).
Oliver Arthur D’Sa – vulnerable client not protected. The solicitor agreed a regulatory settlement agreement and a £3,800 fine after the SRA found he failed to take proper account of a client’s needs and circumstances (including autism and later expert evidence raising capacity/fitness issues) and did not take steps to ask the court to set aside the client’s guilty plea; the convictions were later overturned on appeal.
Alexander David Edmund Hayes Gallagher – fabricated attendance note. The SDT struck the solicitor off after finding he dishonestly created an inaccurate attendance note to cover being late and missing a court hearing.
Malcolm John Colin Mackillop – misleading lender and insurers. Dishonesty strike off, including for misleading a lender bank about completion dates by altering a certificate of title after completion had already taken place, and for providing inaccurate/misleading information on a PII proposal form.
Rachel Wilson – theft from office account by legal cashier. The SRA made a section 43 order after Ms Wilson admitted taking around £200,000 from the firm’s office account over roughly four years, and she was convicted of fraud by abuse of position (also subject to a separate custodial sentence).
Aminata Pungi – theft from an individual’s personal account. The SRA made a section 43 order following the legal cashier’s conviction for fraud by abuse of position after unauthorised transfers from the personal bank account of an individual for whom she worked.
Hassan Ali – private-life conviction, profession impact. The SRA disqualified the paralegal from working in SRA-regulated firms following a conviction for perverting the course of justice, noting that although it arose in his private life it realistically touched on the profession and public confidence.
Samantha Loveridge – dishonesty to conceal mistakes. The SRA made a section 43 order after finding the conveyancing partner (not a solicitor) acted dishonestly by misleading third parties, the client and the firm in order to conceal mistakes on two client matters.
Jonathan James Christian More – misleading client communications. The SRA made a section 99 disqualification order (with a finding of dishonesty) after the firm reported concerns about emails to clients that contained false information, apparently intended to cover inaction on files.
Independent AML audits
What we do – contact us for further information about our services
- Outsourced COLP and COFA support
- COLP and COFA coaching
- Compliance audits
- NEW: Client account health checks
- NEW: Residual balance projects
- New firm and ABS applications
- Independent AML audits (Regulation 21)
- Training (online, remote, on demand)
- AML and GDPR workshops
- PII reviews
- Remote file reviews
- TPMAs
- Escrow accounts
- AML and sanctions searches
Older posts
Familiarity breeds complacency: what Peter Mandelson tells you about your law firm’s AML controls
Familiar faces feel safer. But that’s exactly where risk can creep in. Using the recent scrutiny around Peter Mandelson’s appointment as British ambassador to the US as a starting point, Sophie explores how over-familiarity can quietly erode AML discipline in law firms.
Conflicts of interest: the uncomfortable bit we all try to deal with quickly
Conflicts are one of those topics we all understand, right up until a tricky file lands on the desk. In a recent team discussion, we swapped notes on what really goes wrong in practice: own-interest risks that never get recorded, the knee-jerk rush to “consent and safeguards”, joint instructions that quietly store up trouble, and the subtle habit of starting from “we can act” and working backwards.
No win, no fee: what’s the SRA really worried about?
The SRA has published a new Warning Notice on “no win, no fee” marketing in high-volume consumer claims. In this post, we look at what the warning actually says, who it applies to, and why the regulator appears to have a particular unease with this ubiquitous phrase. We explore whether “no win, no fee” is genuinely misleading, or whether it remains useful shorthand that consumers understand, and ask whether pushing firms away from it risks distorting the market and discouraging more cautious, well-run firms from competing.
