Hello again,
It’s been a busy fortnight in compliance land. This week’s edition is packed with the usual practical insight and regulatory updates – from navigating the tricky line between privilege and reporting, to testing your BCP without causing panic (or actual fires).
We’re also flagging a significant court case for claimant firms and asking what the new SRA CEO might bring to the table.
If you haven’t already, register for our upcoming AML webinar in conjunction with Thirdfort (registration link in the Free CPD section below). Places are limited and it’s shaping up to be a lively session.
We’re also running a live “Compliance Officers Anonymous” session and would welcome any burning questions we can talk about.
And if this newsletter is helpful, please do forward it to your colleagues or peers. The more the merrier.
Until next time….
Stuck between a rock and a SAR(d) place? Balancing privilege and suspicious activity reporting
Are you confident you know when legal professional privilege applies, and when you should be filing a suspicious activity report? This blog explores the grey area at the heart of AML compliance.
How to test your Business Continuity Plan without causing chaos (or setting the building on fire!)
You’ve got a BCP… but will it actually work when the pressure’s on? Here’s a practical guide to testing your plan without giving the team a heart attack.
News and Guidance
Law Society’s ‘21st Century Justice’ report
This major policy report sets out a vision for a justice system that is accessible, efficient, and fit for modern society. Key themes include increased digitalisation, early intervention, and resolving cases outside court. But it doesn’t shy away from calling out the chronic underfunding of legal aid.
BSB Chair’s parting shot: LSB is “failing”
In a no-holds-barred farewell speech, outgoing BSB Chair Kathryn Stone accused the Legal Services Board of failing to provide effective oversight of legal regulators.
“Where the current arrangements are failing in my view lies in the relationship between the oversight regulator, the Legal Services Board, and the front-line regulators, like the Bar Standards Board. That failure is manifest in the assessments the Legal Services Board has recently made of the regulatory effectiveness of the two biggest front-line regulators which oversee around 95% of the legal professionals in England and Wales. Legal services are a great UK success story marked by high levels of professional and ethical competence. Those services are manifestly not for the most part poorly regulated and it is deeply unhelpful to the reputation of a successful industry to say that they are.
So how has this come about? I think the answer lies in the difficulty which an oversight regulator necessarily has in exercising its functions at one remove from the front-line. The board and executive of the oversight regulator are no more experienced than the boards and executives they are overseeing. Oversight gives responsibility, but it does not, in itself, give sharper insight into, or greater care for, the public interest. Still less does it give a better understanding of the challenges of front-line regulation.”
New SRA CEO appointed
Sarah Rapson has been named the new Chief Executive of the SRA, taking over from Paul Philip. With a background in regulation, including senior roles at the Home Office and the FCA, Rapson brings serious policy chops to the role.
Claimant firm in the dock
In a case that will worry (some) firms handling high volumes of financial mis-selling claims, a bank is suing a law firm over allegedly poor quality claims. Details of the Claimant’s case against the law firm, made public during an unsuccessful application to strike out the claim, make it clear that quality control in this area is under the spotlight by the banks.
Government strategy puts legal sector centre stage
The new Industrial Strategy highlights legal services as one of the UK’s “pioneering” growth sectors. With global demand for trusted legal frameworks on the rise, the government sees a big opportunity for UK firms to lead the way.
“…the emergence of new technologies and proliferation of international rules will continue to push innovators to the UK and its trusted legal framework to agree contracts and settle disputes, creating new opportunities for our gold-standard legal practices…”
Compliance corner: Do we need to tell the insurers?
Q: We have made a mistake and the client is £8k out of pocket. We have resolved this amicably and will make good the loss. Do I need to tell my insurer if I’m not intending to claim on the policy?
A: Yes. Even though you are making good the £8k yourself, the incident is still a circumstance under a PI policy. Log it with your broker/insurer now; it costs nothing, keeps you within your policy terms, and protects the firm if the situation changes later.
If you have already reimbursed the client, it might seem unnecessary to involve your professional-indemnity insurer. However, most PI policies operate on a “claims-made” basis: the insurer is obliged to respond only to claims – or to any circumstances that might reasonably turn into a claim – that you report during the life of the policy. The wording almost always makes timely notification a contractual condition, even when you do not expect to claim on the cover.
Silence can backfire. An apparently amicable settlement may unravel if the client later uncovers more loss, adds interest or costs, or brings the matter to a regulator. Should that happen after renewal, an insurer might decline cover on the grounds that the issue was known but never disclosed. By notifying now, you preserve your rights under the policy while staying on the right side of both the contract and your professional body’s rules.
Notifying is straightforward: send your broker or insurer a brief written summary of what happened, the amount involved, and confirmation that you have compensated the client, making clear that you are not currently seeking indemnity. Doing so does not automatically raise your premium or trigger a payout; it simply keeps the file open should the situation change.
Bear in mind that your renewal form may well have a question about anything which should have been notified but has been dealt with “privately”.
Remember not to be afraid of making notifications. To the insurer it can be seen as good, pro-active risk management and making sure that you pick up issues and deal with them promptly at a lower level, before they escalate.
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
2025 LSAG update: What’s changed and what law firms need to do
Are you prepared for the latest changes to the LSAG guidance?
With the updated AML guidance now in effect, legal professionals need to understand what’s changed and how it affects their responsibilities.
Jonathon Bray will join Harriet Holmes of Thirdfort to break down the key updates and share practical steps to keep your compliance framework up to date.
Date: Thursday 10 July 2025
Time: 11am
Location: Online
Compliance Officers Anonymous – registration open
Feeling isolated with your compliance worries? We’re running a safe, confidential session to share dilemmas and get practical guidance from our panel.
Date: Wednesday 9 July 2025
Time: 12pm
Location: Zoom
Bring your anonymous questions on compliance, AML, ethics, culture, governance…or anything else that’s keeping you up at night. Submit in advance to sam@jonathonbray.com or use the live chat.
Recording: Getting AI right – a practical guide
Our latest webinar tackled the fast-moving topic of AI in legal practice, with a focus on practical risk management. We explored regulatory duties around transparency, lawfulness and supervision – and asked whether the current framework is fit for purpose in an AI-driven world.
The session covered not just usage risks, but also how firms should procure and deploy AI systems responsibly. The panel shared examples of real-world adoption, stressed the need for governance and competence, and highlighted risks such as hallucinated outputs and client communication failures.
Watch the recording (Passcode: O1t.!FC1) – free for 14 days
Disciplinary Watch
AML fines – common themes
A slew of AML enforcement actions reported recently, with fines ranging from £4.8k to over £63k. Common failures? Poor client/matter risk assessments, inadequate firm-wide risk assessments, and weak or unimplemented policies. Personal accountability for compliance roles is also coming into sharper focus.
T G Baynes Solicitors – £63,869
Lawson West Solicitors Limited – £36,494
Gill Asker LLP – £25,000
Keogh Caisley Limited – £24,743
HSR Law Limited – £23,549
Cruickshank Limited – £16,984
Russells – £9,656
Brown & Co. Solicitors – £9,179
A.S.K. Legal LLP – £6,768
Amory Glass & Co – £6,049
Ashbournes Solicitors Ltd – £4,804
Clive Farndon – £7,619 (as COLP/MLRO/MLCO – fined for causing the firm to breach the MLRs)
Fraudulent claims: Alykhaan Nourani
Suspended sentence for solicitor who submitted fake pothole damage claims.
Other notable outcomes:
Joanne Jones – rebuke for breach of confidentiality
Craig Baylis – fined for using the client account as a banking facility
Michelle Chapman – rebuked for taking confidential documents on departure from firm
Steptoe International (UK) LLP – rebuked for Russia sanctions breach
Gemma Stanton – post-completion assistant struck off for falsifying client signatures on TR1 forms
Training your team: Anti-money laundering
The SRA expects that all ‘relevant employees’ practicing within the scope of the Money Laundering Regulations (MLRs) must receive robust anti-money laundering (AML) training. Now is the time to ensure your firm is compliant. Failure to meet these obligations can result in significant fines and regulatory action.
Our comprehensive AML training is designed to equip your team with the knowledge and practical skills needed to identify, prevent, and report suspicious activities, safeguarding your firm from risk. Ensure your firm stays ahead of regulatory requirements and avoids potential pitfalls by enrolling your team today.
Formats available: Online | In person | On-demand
Don’t miss out—request a free quote today!
Safeguard your practice: Independent AML Audit
What we do – contact us for further information about our services
- Outsourced COLP and COFA support
- Compliance audits
- New firm and ABS applications
- Independent AML audits (Regulation 21)
- Training (online, remote, on demand)
- AML and GDPR workshops
- PII cost reduction
- Remote file reviews
- TPMAs
- Escrow accounts
- AML and sanctions searches
9 things we learned about Lawtech and AI from our latest webinar
From hallucinations to hidden usage, our expert panel broke down the real compliance risks of AI – and what firms can do about them. Whether it’s procurement, supervision or client communication, this webinar was packed with practical tips.
The seven stages of AML compliance (when the audit doesn’t go to plan)
Every law firm goes through a process when faced with the fallout of a critical AML audit — from initial disbelief to meaningful change. Sophie Cisler’s latest blog explores this emotional and practical journey, offering reassurance and a path to recovery.
One hat too many? Why it makes sense to rotate Compliance Officers
Are you the COLP, COFA and MLRO? You’re not alone — over 2,400 firms operate that way. But with Axiom Ince still ringing in our ears, is it time to rethink?
In this new blog, Samantha Bray explores:
- Why overloading compliance roles is a governance risk
- What the SRA might change next
- Simple steps you can take to protect your firm now
