Watermans
Spencer House, 2 Spencer Avenue, Palmers Green, London , N13 4TR
Recognised body
326619

Decision - Agreement

Outcome: Regulatory settlement agreement

Outcome date: 8 December 2025

Published date: 6 January 2026

Firm details

No detail provided:

Outcome details

This outcome was reached by agreement.

Decision details

Agreed outcome

Watermans (the Firm), a recognised body, authorised and regulated by the Solicitors Regulation Authority (SRA), agrees to the following outcome to the investigation:

• it is fined £4,584
• to the publication of this agreement
• it will pay the costs of the investigation of £600.

Summary of Facts

We carried out an investigation into the firm following an inspection by our AML Proactive Supervision Team.

Our desk-based review identified areas of concern in relation to the firm’s compliance with the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017 (MLRs 2017), the SRA Principles 2011, the SRA Code of Conduct 2011, the SRA Principles [2019] and the SRA Code of Conduct for Firms [2019].

Policies, Controls and Procedures (PCPs)

Between 26 June 2017 and 2 September 2025, the firm failed to maintain compliant policies, controls, and procedures (PCPs) to mitigate and effectively manage the risks of money laundering and terrorist financing, identified in any risk assessment (FWRA), pursuant to Regulation 19(1)(a) of the MLRs 2017, and regularly review and update them pursuant to Regulation 19(1)(b) of the MLRs 2017.

Client and Matter Risk Assessnent (CMRA)

A review of specific client files selected during the Desk based review (DBR) found that, five of out of six files did not contain a Client and Matter Risk Assessment (CMRA), as required by Regulation 28 of the MLRs 2017 and, therefore, the firm was unable to demonstrate that the extent of the measures it had taken to satisfy the requirements of Regulation 28 was appropriate, as required by Regulation 28(16) and it failed to adequately risk assess as part of its CMRA, pursuant to Regulation 28(12)(a)(ii) and Regulation 28(13) of the MLRs 2017.

Admissions

The firm admits, and the SRA accepts, that by failing to comply with the MLRs 2017 that:

To the extent the conduct took place before 24 November 2019 the firm has breached:

Principle 6 of the SRA Principles 2011 – which states you must behave in a way that maintains the trust the public places in you and in the provisions of legal services.

Principle 8 of the SRA Principles 2011 – which states you must run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial risk management principles.

And the firm failed to achieve:

Outcome 7.2 of the SRA Code of Conduct 2011 – which states you have effective systems and controls in place to achieve and comply with all the principles, rules and outcomes and other requirements of the handbook, where applicable.

Outcome 7.3 of the SRA Code of Conduct 2011, which states you must achieve these Outcomes: you identify, monitor and manage risks to compliance with all the Principles, rules and outcomes and other requirements of the Handbook, if applicable to you, and take steps to address issues identified.

Outcome 7.5 of the SRA Code of Conduct 2011 – which states you comply with legislation applicable to your business, including anti-money laundering and data protection legislation.

To the extent the conduct took place from 25 November 2019 onwards, it breached:

Principle 2 of the SRA Principles 2019 – which states you act in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.

Paragraph 2.1(a) of the SRA Code of Conduct for Firms 2019 – which states you have effective governance structures, arrangements, systems, and controls in place that ensure you comply with all the SRA's regulatory arrangements, as well as with other regulatory and legislative requirements, which apply to you.

Paragraph 3.1 of the SRA Code of Conduct for Firms 2019 – which states that you keep up to date with and follow the law and regulation governing the way you work.

Why a fine is an appropriate outcome

The conduct showed a disregard for statutory and regulatory obligations and had the potential to cause harm, by facilitating dubious transactions that could have led to money laundering (and/or terrorist financing). This could have been avoided had the firm had compliant PCPs in place and carried out and documented CMRAs on five of the six files reviewed.

It was incumbent on the firm to meet the requirements set out in the MLRs 2017. The firm failed to do so. The public would expect a firm of solicitors to comply with its legal and regulatory obligations, to protect against these risks as a bare minimum.

The SRA considers that a fine is the appropriate outcome because:

The agreed outcome is a proportionate outcome in the public interest because it creates a credible deterrent to others and the issuing of such a sanction signifies the risk to the public, and the legal sector, that arises when solicitors do not comply with anti-money laundering legislation and their professional regulatory rules.

There has been no evidence of harm to consumers or third parties and there is a low risk of repetition.

The firm has assisted the SRA throughout the investigation and has shown remorse for its actions.

The firm did not financially benefit from the misconduct

Rule 4.1 of the Regulatory and Disciplinary Procedure Rules states that a financial penalty may be appropriate to maintain professional standards and uphold public confidence in the solicitors' profession and in legal services provided by authorised persons. There is nothing within this Agreement which conflicts with Rule 4.1 of the Regulatory and Disciplinary Rules and on that basis, a financial penalty is appropriate

Amount of the fine

The amount of the fine has been calculated in line with the SRA’s published guidance on its approach to setting an appropriate financial penalty (the Guidance).

Having regard to the Guidance, the SRA, we, and the firm agree the nature of conduct in this matter as more serious (score of three). This is because the firm should have been aware of its obligation to have in place compliant PCPs. In addition, the majority of the firm’s work falls within scope of the MLRs 2017, therefore the firm should have been familiar with the obligations imposed by the regulations and should have implemented strict adherence.

In addition, a review of six sample files, together with confirmation from the firm that it was required to assess thirty-two live in-scope files without a documented CMRA, identified significant shortcomings in its risk management processes. The firm also confirmed that, twenty-two of these files were classified as medium risk yet had no CMRA recorded. This evidences that the firm did not undertake CMRAs in accordance with regulatory requirements until prompted by our review. It is our view that the firm remained in breach of Regulation 28, and the conduct continued after it was known to be improper and formed a pattern of misconduct.

Consequently, the firm has failed to meet the requirements of the regulations for a period over eight years. Although, the firm now have compliant documents in place, which are in use, the firm was left vulnerable for a period the SRA considers amounting to a serious breach.

The impact of harm or risk of harm score is assessed as being medium (score of four). This is because although there is no evidence of actual harm, the absence of compliant PCPs (until September 2025), coupled with the firm’s failure to document CMRAs on five out of the six files reviewed and furthermore across its thirty-two live in-scope client files retrospectively, represents serious vulnerability.

Given the nature of its work, where a significant proportion of in-scope matters involve high-risk conveyancing, the lack of effective risk assessment and control measures would have exposed the firm to an elevated risk of money laundering and terrorist financing. This suggests the firm had the potential to cause moderate impact by this conduct.

The ‘nature’ of the conduct and the ‘impact of harm or risk of harm’ added together give a score of five. This places the penalty in Band “C,” as directed by the Guidance, which indicates a broad penalty bracket of between 1.6% and 3.2% of the firm’s annual domestic turnover.

Based on the evidence the firm has provided of its annual domestic turnover; this results in a basic penalty of £5,092.

The SRA considers that the basic penalty should be reduced to £4,584. This reflects the firm’s transparency and cooperation with the AML Proactive Supervision team and AML Investigations team, along with admitting and remedying the breaches.

The firm does not appear to have made any financial gain or received any other benefit as a result of its conduct. Therefore, no adjustment is necessary, and the financial penalty is £4,584.

Publication

Rule 9.2 of the SRA Regulatory and Disciplinary Procedure Rules states that any decision under Rule 3.1 or 3.2, including a Financial Penalty, shall be published unless the particular circumstances outweigh the public interest in publication.

The SRA considers it appropriate that this agreement is published as there are no circumstances that outweigh the public interest in publication, and it is in the interest of transparency in the regulatory and disciplinary process.

Acting in a way which is inconsistent with this agreement

The firm agrees that it will not deny the admissions made in this agreement or act in any way which is inconsistent with it.

If the firm denies the admissions, or acts in a way which is inconsistent with this agreement, the conduct which is subject to this agreement may be considered further by the SRA. That may result in a disciplinary outcome or a referral to the Solicitors Disciplinary Tribunal on the original facts and allegations.

Acting in a way which is inconsistent with this agreement may also constitute a separate breach of Principles 2 and 5 of the Principles and paragraph 3.2 of the Code of Conduct for Firms.

Costs

The firm agrees to pay the costs of the SRA's investigation in the sum of £600. Such costs are due within 28 days of a statement of costs due being issued by the SRA.