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SRA report reveals money laundering and #MeToo cases driving increases in workload

Money laundering and workplace harassment cases are increasingly occupying the workload of the profession’s regulator, according to data from the Solicitors Regulation Authority (SRA).

The report released today (25 July) reveals the breakdown of cases the SRA has worked on and its enforcement activity between November 2017 and October 2018. The report suggests money laundering; dubious investment schemes; and workplace harassment – as well as the related misuse of non-disclosure agreements (NDAs) – are increasingly pervasive within the profession.

The SRA received 218 reports of money laundering in the first nine months of 2018, compared to 152 reports in the same period for 2017, marking a 43% increase in cases. Similarly, between autumn 2017 and autumn 2018 there were 19 cases of dubious investment schemes, with low interest rates driving the increase. However, it remains unclear if the spike in money laundering cases is due to the increased scrutiny of bodies such as the Treasury or National Crime Agency – or self-reporting from solicitors themselves.

One such case ended in City law firm Locke Lord being taken to the Solicitors Disciplinary Tribunal (SDT) and receiving a £500,000 fine. However, the case raised questions as to whether the SRA is sufficiently robust, with the regulator’s initial £250,000 fine being deemed too lenient by the SDT, which doubled it. Despite sometimes being considered too soft, the SRA did manage to successfully appeal seven SDT decisions in the period, with nine appeals submitted by the SRA in total.

‘I’m not surprised the SRA has a high success rate with appeals,’ one professional regulation partner told Legal Business. ‘The SRA is an active user of the SDT and they have shrewd advisers, whereas solicitors sometimes don’t understand the SDT environment.’

The SRA also disclosed the amount of workplace harassment cases it received between 2017 and 2018, with 70 such complaints being reported to the regulator. Of those 70, the report suggests 13 are related to the potential misuse of NDAs. The overall number of cases including NDAs was not disclosed.

In March of last year, the SRA took action to combat the misuse of NDAs by publishing a warning notice, aiming to stamp out the threat of litigation as a means of stopping people from disclosing misconduct.