The SRA is increasingly focusing its oversight on small firms, as evidenced by a recent 1,596£ fine issued to a Newcastle-based practice for significant money laundering record-keeping failures. This enforcement action against Caisson Turner Legal Services highlights a broader regulatory shift where the size of a firm no longer offers a shield against proactive supervision. The regulator’s investigation uncovered an eight-year gap in compliance, specifically regarding the documentation of risk assessments required under the Money Laundering Regulations 2017. By reaching this regulatory settlement in February 2026, the firm has also agreed to pay investigative costs totaling 600 pounds.

The breakdown of anti-money laundering failures

The core of the case against Caisson Turner Legal Services involves a persistent failure to comply with Regulation 28 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. Between June 2017 and July 2025, the firm neglected to maintain records of its client and matter risk assessments. In the legal sector, these assessments are not merely administrative hurdles; they are the primary defense against the entry of illicit funds into the financial system. Without a written record of why a client was deemed low or high risk, a firm cannot prove it has exercised due diligence or that its internal controls are appropriate for the specific nature of its work.

During a review by the proactive supervision team, investigators looked at a sample of files and discovered that five out of six lacked any documented risk assessment prior to the commencement of legal work. This timing is a critical legal requirement; the assessment must guide the firm’s actions from the outset of the business relationship. The firm only corrected this systemic issue in July 2025 by adopting the standard template provided by the regulator. This delay meant that for nearly a decade, the practice operated without the necessary safeguards to identify potentially dubious transactions or activities linked to terrorist financing.

Why the SRA targets small firms in current enforcement

There is a documented trend where the SRA targets small firms to eliminate perceived “weak links” in the national anti-money laundering framework. While large international firms often have dedicated compliance departments, smaller practices and sole practitioners must manage these obligations alongside their primary legal duties. The regulator has made it clear that the risk of money laundering does not diminish simply because a firm is small or based outside of a major financial hub like London. In fact, criminal entities may specifically target smaller firms, betting on less rigorous oversight or a more personal, less formal relationship with the solicitor.

The investigation into the Newcastle firm was triggered by a desk-based review, a method that allows the regulator to scrutinize firms of all sizes without the need for an on-site visit. This suggests that the use of data and proactive reporting is making it easier for regulators to identify non-compliance in the small-firm sector. The findings in this case showed a disregard for statutory obligations that had the potential to cause significant public harm. The regulator noted that the public expects any solicitor, regardless of the size of their practice, to act as a gatekeeper against financial crime.

Impact on professional standards and public trust

A central theme in this disciplinary action is the protection of the reputation of the legal profession. By failing to maintain records for over eight years, the firm was found to have breached the SRA Principles of both 2011 and 2019. Specifically, the conduct was seen as a failure to behave in a way that maintains public trust and a failure to run a business in accordance with sound financial risk management principles. For legal professionals, compliance with money laundering legislation is not an optional extra; it is a fundamental requirement of their license to practice law.

The penalty of 1596 pounds was calculated based on the firm’s turnover and the “more serious” nature of the conduct. Although the actual impact was deemed low because there was no evidence of specific money laundering occurring, the “recklessness” of the oversight led to a higher nature score. The SRA uses these fines to create a credible deterrent, signaling to the rest of the sector that even technical breaches—such as failing to keep records—will lead to financial penalties and public disclosure. The requirement to publish these settlement agreements ensures that a firm’s compliance history is transparent to clients, insurers, and other stakeholders.

Conclusion and future compliance requirements

The conclusion of this case marks a turning point for the firm, which has now updated its systems to ensure all files in scope of the regulations include a completed risk assessment. For the wider legal community, the takeaway is clear: the regulator is no longer focusing solely on the “big fish.” Every authorised firm must ensure that its governance structures and internal controls are robust enough to meet the 2017 regulations and the SRA Code of Conduct for Firms. The cost of non-compliance—both in terms of the fine and the 600 pounds in investigative costs—is a heavy price for a small business to pay.

Moving forward, firms must prioritize the documentation of their decision-making processes. It is no longer sufficient to “know” a client is low risk; that assessment must be recorded, dated, and stored in a manner that can be produced during an audit. As the regulator continues its proactive supervision cycles, smaller firms should conduct their own internal reviews to identify gaps before the SRA does. Adhering to these rules is not just about avoiding a fine; it is about ensuring that the legal profession remains a trusted and secure component of the global financial system.

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Key Points

• The firm was fined 1596 pounds for failing to record client risk assessments over an eight-year period from 2017 to 2025.
• SRA investigators found that 83 percent of files reviewed lacked the mandatory documentation required by the 2017 money laundering regulations.
• The regulator emphasized that the SRA targets small firms to ensure the entire legal sector is protected from being used for financial crime.
• The fine was reduced to 1596 pounds after the firm cooperated with the investigation and implemented a new risk assessment template.
• In addition to the fine, the firm must pay 600 pounds in costs and allow the full details of the settlement to be published online.

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Related Links

• SRA Regulatory and Disciplinary Procedure Rules
• The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
• SRA Guidance on Client and Matter Risk Assessments
• FATF Recommendations on the Legal Sector
• Law Society Anti-Money Laundering Resources

Other FinCrime Central Articles About SRA’s Relentless Actions

• Amphlett Lissimore Faces £114k SRA Fine for Anti-Money Laundering Failures
• SRA Crackdown Sees Huggins Lewis Foskett Pay £78,000 Over AML Failures
• UK Law Firm Mackarness and Lunt Fined By the SRA for Long-Term AML Failures

Source: SRA

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