Regulatory Pulse - 18 December 2025

The Last Few Weeks

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The SRA suffered two defeats before the Tribunal in unrelated SLAPPs cases. On 8 December 2025, a partner at Hamlins LLP was cleared of allegations that he misled another solicitor as to the strength of his client's case. Four days later, the SDT summarily dismisseda SLAPP allegation against a partner at Carter-Ruck, holding that the SRA's case was "based on hindsight rather than evidence of professional misconduct".

In separate proceedings, Carter-Ruck has launched a High Court challenge to the SRA's ability to compel firms to disclose privileged material. This could be a big deal: the law in this area is filled with uncertainty and if the decision goes against the SRA it may profoundly affect how it conducts investigations. We will be watching this one closely.

A Government consultation on the FCA's proposed takeover of AML supervision of the legal sector will remain open until 24 December 2025. The proposals have overtaken the SRA's plan to start imposing unlimited fines in exercise of a power granted by the Economic Crime and Corporate Transparency Act 2023. Pending transfer of the enforcement role to the FCA, larger firms suspected of AML breaches are likely to be referred to the Tribunal.

For the time being, the SRA remains the frontline AML regulator for the legal profession, and has kept up a brisk rate of sanctions (of smaller firms) for AML breaches: 7 fines totalling £65,857 in the two weeks leading up to this edition.  

The Chartered Institute of Legal Executives has been granted permission to appeal the Mazur decision which brought into question the lawfulness of business models many firms operate on and which introduced uncertainty around the role of CILEx (and other non-authorised legal staff) in the conduct of litigation. CILEx's position on appeal is likely to focus on the argument that non-authorised staff have been conducting litigation (under the supervision of their authorised firm or a qualified solicitor) as a matter of custom for "decades, if not centuries".

The Law Society has been given permission to be joined as a respondent and will also make submissions.

In the meantime, and as no appeal decision can be expected for at least a year, CILEx reports that 600 executives have lodged applications for litigation rights in order to regularise their ability to conduct litigation. These applications follow the LSB's approval for CILEx to grant stand-alone litigation rights which had previously been coupled with advocacy rights.

The SRA has also published updated guidance on the effect of the decision, which can be accessed here. Whilst the SRA promises to treat historic mistakes 'sympathetically', it warns that "if you are conducting a reserved activity without authorisation and have not addressed the implications of the judgment and our guidance, you can expect us to use all appropriate investigative and enforcement powers to identify and address this misconduct."

The SRA published the results of a thematic review into the COLP and COFA role, in which it identified concerns including that the compliance officer roles are often undervalued within firms. The regulator indicated that in the longer term, it will undertake a more fundamental review of the effectiveness of the compliance officer regime.

The SRA is also consulting on new proposals regarding client money, including requiring firms to submit all accountants' reports to the regulator and make annual declarations of compliance. The consultation will remain open until 20 February 2026.

In another AI-horror story, wasted costs were ordered against a firm which cited fictitious authorities generated by AI software in an application to amend a claim. The court followed the earlier decision in Ayinde v London Borough of Haringey, which provided that a referral to the regulator will ordinarily follow the citing of fictitious authorities. However, the judge stopped short of a referral to the SRA, on the basis that the "the failure in this case was in substance a failure of management at the firm more than the failure of [the] individual solicitor".

Two former directors and senior managers of SSB Group were made subject to disqualification orders under s.99 Legal Services Act 2007. The SRA is currently subject to enforcement action by the Legal Services Board following an independent review which identified numerous failings by the regulator before the collapse of the ill-fated high-volume claims specialist.

Other recent SRA decisions include:

• section 43 orders arising out of a drink-driving conviction and a litigation consultant accepting a cash payment from a client which he failed to deposit in the client account nor return on request;
• a rebuke for failing to properly supervise staff members given to an immigration solicitor who submitted duplicate asylum statements in two separate cases and instructed a trainee to prepare and submit a judicial review application for a client's asylum matter which was deemed by the Upper Tribunal to be "poorly prepared and lacked any merits".
• A rebuke for a solicitor who instructed a trainee to backdate a deed, under the genuine but mistaken belief that it was proper and acceptable to do so.

The SDT published reasoned judgments in cases including:

• The dismissal of all allegations against the former managing partner of an international firm. The SRA had alleged that the partner breached Principles 2 (public trust and confidence) and 5 (integrity) of the SRA principles in connection with allegedly sexually-motivated conduct.
• A suspended period of suspension (with conditions) for a solicitor who was found to have acted with "manifest incompetence" in connection with conveyancing transactions and his management and ownership of a firm.
• A fine for a solicitor who failed to spot money laundering red flags whilst acting in a unsecured loan transactions. The red flags included the solicitors for one of the borrowers changing mid-transaction without explanation and, being asked to send the loan money to companies and individuals who were not the borrower rather than a solicitor's client account as stipulated in the facility agreement. The SDT commented that these transactions "bore hallmarks of fraud and/or money laundering".
• A decision on an Agreed Outcome to strike off a solicitor for financing his mortgage with criminal proceeds from his brother's drug dealing. The decision followed the solicitor's conviction for conspiracy to commit fraud by false representations after he had obtained a residential mortgage from Santander to purchase a property for which he represented he would be the sole owner. In reality, the property was partially funded by his brother who was living at the property and contributing to the mortgage payments.
• A decisionto remove conditions from a former US firm associate's practising certificate after a one-year suspension for possession of cocaine. The SDT in removing the conditions commented it was "impressed by [his] genuine remorse" and that the solicitor had "fully acknowledged his past conduct and taken the time to reflect upon it."

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We would love to hear your questions, comments and suggestions for future topics. Obviously we can't comment on ongoing cases, and the views expressed in RPC Pulse are not to be relied upon as legal advice.