20 Old Bailey, London
, EC4M 7AN
Decision - Agreement
Outcome: Regulatory settlement agreement
Outcome date: 6 March 2020
Published date: 16 March 2020
Firm or organisation at date of publication and at time of matters giving rise to outcome
Name: Withers LLP
Address(es): 20 Old Bailey, London, EC4M 7AN
Firm ID: 352314
This outcome was reached by SRA decision.
1. Agreed outcome
1.1 Withers LLP ("the firm"), a recognised body authorised and regulated by the Solicitors Regulation Authority (SRA), agrees to the following outcomes to the investigation of its conduct in relation to the provision of anti-money laundering training to relevant employees:
- it is rebuked, pursuant to Rule 3.1(a) of the SRA Regulatory and Disciplinary Procedure Rules,
- to the publication of this agreement, pursuant to Rule 9.2 of the SRA Regulatory and Disciplinary Procedure Rules, and
- it will pay the costs of the investigation of £1,350, pursuant to Rule 10.1 and Schedule 1 of the SRA Regulatory and Disciplinary Procedure Rules.
2. Summary of Facts
2.1 At the relevant time, between June 2017 and October 2019, the firm failed to take appropriate measures to ensure that its relevant employees were regularly given training in how to recognise and deal with transactions and other activities or situations which may be related to money laundering or terrorist financing as required by regulation 24(1)(a)(ii) of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ("MLRs 2017").
2.2 This regulatory settlement agreement concerns the extent, and timeliness, of the firm's actions in taking appropriate measures to train all of its "relevant persons" pursuant to reg. 24(1)(a)(ii), and during the period from 26 June 2017 to 30 October 2019.
2.3 The firm was first asked by the SRA in November 2018 whether relevant employees had received training on the MLRs 2017. There was regular engagement between the SRA and the firm thereafter, concerning the issue of the firm's compliance with reg.24(1)(a)(ii). The firm told the SRA that its AML training programme was being reviewed and applicable training would be completed. By the end of 2018 the firm had provided training to approximately two-thirds of the individuals it considers are "relevant employees". The training of the remaining one-third was completed by early October 2019.
2.4 The SRA sent the firm a letter, dated 28 October 2019, raising formal allegations, and pursuant to the SRA Disciplinary Procedure Rules 2011 (the relevant rules in force at that time).
2.5 The firm responded on 2 December 2019 and confirmed that its relevant employees had been made aware of the MLRs 2017, as part of a wider review of their global anti-money laundering policies, controls and procedures but the delivery of training to them had taken longer than anticipated.
2.6 Assurances have been given by the firm, which the SRA accepts, that training has now been completed for all relevant employees on the MLRs 2017.
3.1 The firm admits, and the SRA accepts, that its failure to train all relevant employees between 26 June 2017 and 30 October 2019 amounted to non-compliance with its legal obligations under reg.24(1)(a)(ii) MLRs 2017.
3.2 The firm further admits, and the SRA accepts, that the above failure also amounts to a breach of the following parts of the SRA Handbook:
- in breach of Principle 6 of the SRA Principles 2011, the firm failed to "…behave in a way that maintains the trust the public places in [it] and in the provision of legal services".
- in breach of Principle 7 of the SRA Principles 2011, the firm failed to "comply with [its] legal and regulatory obligations…";
- the firm failed to achieve Outcome 7.5 of the SRA Code of Conduct 2011 ("you comply with legislation applicable to your business, including anti-money laundering and data protection legislation"); and
- the firm failed to achieve Outcome 7.6 of the SRA Code of Conduct 2011 ("you train individuals working in the firm to maintain a level of competence appropriate to their work and level of responsibility").
4. Why the agreed outcome is appropriate
4.1 The SRA considers, and the firm accepts, that a rebuke is appropriate and proportionate following reference to the SRA Enforcement Strategy because:
- there was a breach of statutory obligations (the MLRs 2017 came into force on 26 June 2017), which once highlighted to the firm in November 2018 was not remedied in a timely fashion
- the firm’s conduct was non-compliant because all of its relevant employees need to be aware of the relevant anti-money laundering legislation, especially when considering the nature of the work the firm undertakes and its client base,
- the agreed outcome is a proportionate outcome in the public interest because it creates a credible deterrent to other firms and the issuing of such a sanction signifies the risk to the public, and the legal sector, that arises when employees of a firm may not be adequately trained to detect and prevent money laundering and terrorist financing, and
- there has been no evidence of lasting harm to consumers or third parties, the breach has been remedied and there is a low risk of repetition.
4.2 In deciding that a rebuke is proportionate, the SRA has taken into account the early admissions made by the firm, following the letter it was sent raising formal allegations, and the following mitigation which it has put forward:
- notwithstanding the absence of regular training, the firm did take some other steps to make relevant employees aware of the relevant anti-money laundering legislation, and
- training has now been delivered to all relevant employees.
4.3 Rule 9.2 of the SRA Regulatory and Disciplinary Procedure Rules states that any decision under Rule 3.1 or 3.2, including a rebuke, 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 interests of transparency in the regulatory and disciplinary process to do so.
5. Acting in a way which is inconsistent with this agreement
5.1 The firm agrees that it will not act in any way which is inconsistent with this agreement, such as by denying responsibility for the conduct referred to above. That may result in a further disciplinary sanction. Acting in a way which is inconsistent with this agreement may also constitute a separate breach of Principles 1, 2 and 5 of the SRA Principles contained within the SRA Standards and Regulations 2019 (such SRA Principles having been in force since 25 November 2019).
6.1 The firm agrees to pay the costs of the SRA's investigation in this matter in the sum of £1,350. Such costs are due within 28 days of a statement of costs due being issued by the SRA.
The date of this agreement is 6 March 2020.