Welcome back to COLP Insider. Lots to cover this month — and a date for your diary. We’re hosting a free webinar with Gary Horswell (Ntegrity) on Wednesday 1 October at 12pm: a practical debrief on the 2025 PII renewal season and what firms should do now to secure better terms next time. Please register if you haven’t already — it’ll be a useful session with time for Q&A.
In this edition, Sophie Cisler takes on the big topic of solicitors’ ethics — timely, uncomfortable in places, and well worth ten minutes of your day. We also look at the government’s proposed tweaks to the Money Laundering Regulations, the SRA’s discussion paper on high-volume consumer claims (the direction of travel is getting clearer), and the updated SRA EDI guidance.
There are also new Law Society practice notes on residual client balances and price and service transparency, plus our usual Disciplinary Watch.
As ever, if something here prompts a question, hit reply — we’re happy to help. And do share the webinar link with your team.
Have a great weekend, almost there.
Jon and the team
Solicitors’ ethics: Houston, we have a problem
We need to change the conversation around ethics, says Sophie Cisler. This article asks hard questions: when does “common practice” become misconduct? When do blurred lines of behaviour become serious ethics breaches? And do ethical lapses make a solicitor a bad person?
If you think ethics is just about obvious wrongs, this will challenge you. Humans are imperfect – and some of us might have gone off course without realising.
Read the full piece for a fresh view on what ethics looks like in practice — and what we must do to get it right.
Solicitors’ PII market update: Lessons from the 2025 insurance renewals
What did the 2025 PII renewal season really teach us? Premiums looked softer for some firms, but insurers are sharpening their focus on risk, compliance culture and financial stability. Some firms sailed through, others hit unexpected hurdles. In this interview with Gary Horswell, we look at what you’ll want to know before your next renewal.
Proposed amendments to the Money Laundering Regulations
Coming soon: Changes to the MLRs. The government’s draft amendments to the Money Laundering Regulations are finally here — but are they as disruptive as rumours suggested? The much anticipated simplifications around client due diligence look modest at best, whilst stricter rules for pooled client accounts has the potential to cause serious complications.
News and Guidance
SRA discussion paper on high volume consumer claims: Direction of travel becomes clearer
This latest discussion paper confirms the SRA will tighten the screws on high-volume consumer claims work, after a year of intense supervision (76 live investigations; five interventions; 500+ declarations demanded).
The paper crystallises five problem areas: client transparency at sign-up, third-party funding risks, ATE insurance suitability, keeping regulation in step with the market, and system-wide fixes with other regulators.
We can expect the SRA to require firmer client information rules at onboarding. The SRA signals prescribed, accessible disclosures (standard wording/checklists) covering prospects, costs, deductions, funding/ATE, liabilities on loss and who gets what from any recovery.
It also trails a fresh warning notice on the term “no win, no fee”, which it says can mislead consumers.
On third-party litigation funding, the SRA endorses the Civil Justice Council’s call for a statutory regime but won’t wait passively: expect additional guidance and warnings, plus data-gathering on funder relationships and firms’ financial health to manage gearing and stability risks in portfolio-funded models.
For ATE insurance, we can expect updated SRA advice by the end of the year, and they are considering specified requirements (borrowing from the PII template) to protect clients. The aim is consistent cover that actually responds when claims fail.
The paper also floats enhanced authorisation and ongoing oversight for firms active in this sector, covering firm governance and key personnel, plus changes to mass file-transfer protections when leveraged firms exit quickly. Cross-regulator coordination (eg, with the FCA on motor finance claims) will continue to feature. Formal consultation on specific rule changes is pencilled for 2026.
Firms in this sector should make plans to get ahead of this. Reviewing marketing messages and onboarding disclosures; funding arrangements; ATE selection/explanations; and stress-testing financial resilience – these will all help ensure you’re aligned when the SRA moves from discussion to detailed proposals.
Feedback on the discussion paper closes on 14 November 2025, with roundtables and a webinar this autumn.
Tax adviser registration scheme: Law Society pushes back
The Law Society is calling on HMRC to exclude solicitors from a new tax adviser registration scheme that’s set to begin in April 2026, warning that as drafted it could impose an undue burden and catch lawyers who aren’t really acting as tax advisers.
- The proposed definitions of “tax adviser” and “interaction with HMRC” are very broad — possibly capturing conveyancers handling SDLT returns or lawyers drafting contracts that include indemnities or warranties, even when no tax advice is given.
- Small and medium law firms could be disproportionately affected, potentially having to cease certain tax-adjacent work or take costly steps just to stay compliant.
- The Law Society is also uneasy about HMRC’s wide discretionary powers to refuse, suspend or cancel registration, including on grounds of professional standards, without clear checks.
- There are worries that requirements like having an “in order” personal tax position for senior staff (even those not involved in tax work) will be intrusive and unfair.
We all need to keep a careful eye on this. If this goes ahead as is, you may need to assess whether any part of your practice could fall under the new rules — even if you don’t consider yourselves “tax advisers.”
The changes might affect process, risk assessment, compliance costs, and perhaps even business structure.
SRA updates equality, diversity and inclusion guidance
The SRA has refreshed its guidance on Principle 6 (encouraging equality, diversity and inclusion). It clarifies expectations on workplace culture (treating colleagues fairly; zero tolerance of bullying/harassment), fair recruitment and progression, reasonable adjustments for disabled staff and clients, and inclusive service delivery.
It also underlines firms’ duties to collect, report and (where possible) publish workforce diversity data every two years, and reminds firms that failure to report can attract fixed financial penalties. The guidance includes some practical actions in an annex: have an EDI policy endorsed by senior leadership, monitor and analyse diversity data across the employee lifecycle, set targets, and review policies for unintended barriers.
There are worked examples, plus a reminder to report conduct you reasonably believe could amount to a serious breach, including EDI-related misconduct.
Residual client balances – new practice note
This fresh guidance recaps your duties to return client money “promptly” once there’s no proper reason to hold it, sets out proportionate tracing steps, and explains when you can donate balances of £500 or less to charity without SRA approval (subject to strict record-keeping).
It also covers applying to the SRA for larger sums, maintaining a central register/receipts, and links this to Accounts Rules reporting. Watch for possible rule changes following the SRA’s client money consultation, including more prescriptive timelines.
We can review your residual balance risk
Price and service transparency – updated practice note
An updated guide to complying with the SRA Transparency Rules: who must publish, which services are in scope, and exactly what has to be on your website (price basis incl. VAT/disbursements, what’s included, key stages/timescales, and team experience), alongside regulatory and complaints information and the SRA digital badge.
It stresses clear, prominent, regularly reviewed content and gives practical tips on ranges vs fixed fees, online quote tools, and accessibility. Useful context for any firm refreshing pricing pages ahead of the autumn.
Contact us for a website review
Compliance corner: replacing a COFA at short notice
Q: Our COFA has gone on long-term sick with no notice. What’s the process to replace them, which forms do we use, and how long does it take?
A: A firm must have a COFA (and COLP) in place at all times. The COFA is particularly important because they are responsible for ensuring the firm is compliant with the Accounts Rules.
The SRA does allow a temporary emergency route where there was genuinely no notice. The application must be submitted within 7 days of the COFA/COLP leaving. This is reserved for true emergencies; it cannot be used to sidestep the full authorisation process.
Temporary emergency approval (no notice situations)
- Use the SRA’s temporary emergency route to approve an interim COFA – it could be the same person who will become the long-term COFA.
- You’ll need to explain why there was no notice, who the proposed interim is, and how you’ll manage risks meanwhile.
- This route is discretionary and time-limited. If the temporary approval is granted, the SRA will give you a deadline to submit the full COFA application.
Deemed approval (small firms only)
- If your last full-year turnover was under £600k and the candidate meets the criteria in Rule 13.5 of the Authorisation of Firms Rules, you may be able to use the deemed approval route.
- That route is notification-only (no pre-approval), but you must still tell the SRA promptly and keep records showing the candidate’s suitability.
Full authorisation (not eligible for temporary emergency or deemed approval)
- Submit an FA2 form for the new COFA via mySRA. This applies in all other cases (and will follow after a temporary approval).
- If the individual is regulated elsewhere, obtain a Certificate of Good Standing from their regulator before submitting the FA2 – otherwise it will be rejected.
- If the individual is not already approved as a BOOM under the Money Laundering Regulations, they must apply via form FA10b (with DBS checks). That BOOM step is separate from the COFA approval.
Timing
- Temporary emergency approval: can be quick if your request is clear and complete (often a few days).
- Deemed approval: notification is immediate, but keep evidence on file.
- Full FA2 approval: timing varies with SRA workload and the completeness of your application; build in several weeks.
- BOOM (FA10b) with DBS: usually processed at the same time as the compliance officer approval.
Mind the “gap”
Firms often worry about a technical gap between outgoing and incoming compliance officers. In our experience, the SRA does not take action where a firm is demonstrably acting in good faith – promptly notifying, seeking emergency approval where appropriate, and progressing FA2/FA10b without delay.
Common pitfalls to avoid
- Trying to use the emergency route where there was notice – this will be pushed back to full FA2 and will cause delay.
- Forgetting the BOOM angle (FA10b + DBS) for a new compliance officer who isn’t already approved – this is a breach of the Money Laundering Regulations.
- Delays caused by external certificates of good standing – request these immediately.
- Failing to document interim controls over client account and breach reporting.
Changing COLP or COFA? We can help.
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
Next free webinar: Solicitors’ PII market update
Join us on Wednesday 1 October 2025 at 12pm for a practical debrief on this year’s PII market. We’ll be in conversation with Gary Horswell (Ntegrity) to unpack what insurers focused on, why some firms sailed through while others didn’t, and what to do now to secure better terms next time. Expect clear takeaways and time for Q&A.
Register now (places limited)
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 joined Harriet Holmes of Thirdfort to break down the key updates and share practical steps to keep your compliance framework up to date.
Disciplinary Watch
Heath & Blenkinsop — £4,282 fine (AML controls)
Regulatory settlement following an SRA investigation into anti-money laundering systems and controls. Useful reminder that “smaller” penalties still come with publication and costs.
Riyad Awada — non-lawyer barred from the profession
A section 43 order means Mr Awada cannot work for SRA-regulated firms without permission, following his conviction in the UAE for drug smuggling.
Davies Blunden & Evans — £18,906 fine (AML risk assessment breaches)
Following a review by the SRA’s AML Proactive Supervision team, the firm agreed a fine for weaknesses around AML risk assessment and related compliance. Another data point in the regulator’s continuing focus on FWRA quality and implementation.
Aldridge Brownlee Solicitors LLP — £24,183 fine (source-of-funds failures)
Notable for its narrow scope: the penalty was based on four files where the firm failed to establish adequate source of funds. The case underlines how even a small sample of defective files can trigger a sizeable fine when the SRA sees systemic risk. SoF discipline really matters.
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!
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What we do – contact us for further information about our services
- Outsourced COLP and COFA support
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- Compliance audits
- New firm and ABS applications
- Independent AML audits (Regulation 21)
- Training (online, remote, on demand)
- AML and GDPR workshops
- PII reviews
- Remote file reviews
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SRA regulation through declaration: A necessary nudge or a nasty trap?
The SRA is taking the “exceptional step” of forcing claims firms to certify compliance. In this post, we examine what that really means, the pitfalls, and what the use of this regulatory tool means for the rest of the profession.
An apology is the best way to handle a complaint
An apology done right can save time, money, and reputation. This piece by Sophie Cisler shows the wording, timing and tone that work.
The “Michelin Guide” to matter risk assessments: A fine-dining framework for spotting risk in every course of a matter
From amuse-bouche to dessert: Sophie Cisler’s “Michelin Guide” turns matter risk assessments into a fine-dining framework you can actually use at every stage.
