Castle Sanderson Limited must pay a financial penalty of 10462 pounds following a regulatory settlement agreement with the Solicitors Regulation Authority. The Leeds-based law firm, which provides a variety of legal services including conveyancing, wills, and probate, received this sanction after an investigation uncovered persistent gaps in its anti-money laundering framework. Regulatory officials determined that the firm failed to maintain adequate policies and neglected essential risk assessments for dozens of legal matters. This enforcement action serves as a public reminder that legal service providers must strictly adhere to statutory obligations to prevent financial crime.
Table of Contents
Financial Crime Compliance Requirements for Legal Practices
The investigation into Castle Sanderson Limited revealed significant lapses in the fundamental pillars of financial crime prevention within the legal sector. Between June 2017 and May 2025, the firm operated without regularly reviewing or updating its internal policies, controls, and procedures. These documents are essential for identifying and mitigating the specific threats a law firm faces regarding illicit fund movements. By failing to refresh these protocols in response to changing legislation and emerging threats, the firm remained vulnerable to exploitation by criminal elements seeking to legitimise wealth through property transactions.
The Solicitors Regulation Authority emphasized that the firm did not sufficiently address the risks identified in its firm-wide risk assessment. This document acts as the foundation for a robust compliance culture, yet the lack of ongoing maintenance meant the firm was effectively operating with outdated defenses. Such oversight is categorized as a serious breach because it signals a disregard for the statutory requirements designed to protect the integrity of the United Kingdom’s financial system. Compliance is not a one-time task but a continuous obligation that evolves alongside the techniques used by those attempting to hide the origins of illicit capital.
Missing Risk Assessments in High Risk Conveyancing Matters
Beyond the broad systemic failures, the regulatory body identified specific operational omissions involving client and matter risk assessments. During the file review process, inspectors discovered that in 34 separate instances, the firm failed to conduct the required evaluations of the clients and the specific legal matters involved. These assessments are mandatory under the 2017 regulations to ensure that practitioners understand who they are dealing with and the nature of the funds being utilized in a transaction. Without these individual checks, a firm cannot accurately determine the level of due diligence required for a particular case.
The risk was particularly acute given that the vast majority of the work performed by Castle Sanderson Limited involved conveyancing. Real estate is globally recognized as a high-risk sector for money laundering because it allows for the movement of large sums of money in single transactions. Criminals often target law firms to facilitate these deals, hoping the professional status of the solicitor will provide a veneer of legitimacy to the purchase. By neglecting to perform file-level risk assessments, the firm bypassed a critical gatekeeping function, leaving the legal sector exposed to the risk of facilitating the movement of criminal proceeds through the housing market.
Professional Standards and Regulatory Enforcement Actions
The disciplinary findings highlighted breaches of several core principles that govern the conduct of solicitors in England and Wales. Under the older 2011 regulatory framework and the updated 2019 standards, firms are required to act in a way that upholds public trust and maintains the reputation of the legal profession. The failure to implement effective governance structures and systems of control was deemed a violation of the requirement to run a business effectively and in accordance with sound risk management principles. The regulator noted that the public expects a baseline of compliance with laws intended to prevent terrorism and organized crime.
The determination of the fine amount involved an assessment of both the nature of the conduct and the potential for harm. The conduct was scored as more serious because the non-compliance persisted for almost a decade, despite numerous warning notices and guidance published by the regulator. While there was no evidence of actual money laundering occurring or direct loss to clients, the potential for harm was rated as medium. This rating reflects the inherent dangers of the conveyancing sector and the fact that the firm lacked the necessary documentation to prove it was properly scrutinizing the source of funds for its clients.
Remediation Efforts and Final Regulatory Sanctions
In reaching the settlement agreement, the regulator acknowledged several mitigating factors that led to a reduction in the final penalty. Castle Sanderson Limited cooperated fully with the proactive supervision and investigation teams once the issues were identified. The firm also took immediate steps to rectify the deficiencies by implementing new policies and rolling out comprehensive training for its staff. This training specifically focused on the documentation and scrutiny of source of funds checks, which is a vital component of modern anti-money laundering efforts.
The final financial penalty of 10462 pounds, plus 600 pounds in investigative costs, serves as a proportionate response intended to maintain professional standards. The regulator noted that the firm had already reviewed its live files to ensure that current matters are now being assessed correctly. By publishing the details of this agreement, the Solicitors Regulation Authority aims to create a credible deterrent for other firms that might be tempted to deprioritize compliance. The case concludes with a clear signal that even firms without a history of direct criminal involvement must maintain rigorous administrative and operational standards to stay within the law.
Key Points
- Castle Sanderson Limited was ordered to pay a 10462 pound fine for failing to comply with anti-money laundering regulations between 2017 and 2025.
- The firm failed to conduct mandatory client and matter risk assessments on 34 files, which is a critical requirement for high-risk conveyancing work.
- Regulatory investigators found that the firm did not regularly update its policies and controls to manage the risks of financial crime and terrorist financing.
- The settlement reflects the firm’s early admission of the breaches and its subsequent efforts to train staff and update its compliance documentation.
Related Links
- Money Laundering Terrorist Financing Information on the Payer Regulations 2017
- Solicitors Regulation Authority Enforcement Strategy and Sanctions
- Legal Sector Affinity Group Anti-Money Laundering Guidance
Other FinCrime Central Articles About SRA’s Crackdowns
- Small Firm Alert as SRA Issues Fine to Independent Lawyer For AML Failures
- Uk Law Firm Mackarness and Lunt Fined By the SRA for Long-Term AML Failures
- Amphlett Lissimore Faces £114k SRA Fine for Anti-Money Laundering Failures
Source: SRA
Some of FinCrime Central’s articles may have been enriched or edited with the help of AI tools. It may contain unintentional errors.
Want to promote your brand, or need some help selecting the right solution or the right advisory firm? Email us at info@fincrimecentral.com; we probably have the right contact for you.
