BURROWS

Decision - Fined

Outcome: Fine

Outcome date: 30 January 2024

Published date: 5 March 2024

Firm details

Firm or organisation at date of publication and at time of matters giving rise to outcome

Name: Burrows

Address(es): 298-300 Preston Road, Harrow, HA3 0QB

Firm ID: 44514

Outcome details

This outcome was reached by SRA decision.

Decision details

Who does this disciplinary decision relate to?

Burrows (the firm), is a recognised body, with its head office at 298-300 Preston Road, Harrow, HA3 0QB.

Summary of Decision

The firm was fined £12,989.68 for failing to have in place or to maintain relevant documentation to prevent activities relating to money laundering and terrorist financing as required by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs 2017).

Reasons/basis

Facts of the misconduct

In March 2022 the SRA's Anti-Money Laundering (AML) Proactive Team undertook an inspection at the firm to assess its compliance against the MLRs 2017. This identified various areas of concern surrounding the firm's compliance with requirements for a documented and compliant firm wide risk assessment (FWRA), policies, controls and procedures (PCPs) and client/matter risk assessments.

These concerns led to a referral to the SRA's AML investigation team. The firm was provided with guidance to help it come into compliance in July 2022. The firm implemented a compliant firm wide risk assessment (FWRA) in September 2022 and compliant policies, controls and procedures (PCPs) in April 2023.

It was found that:

Allegation 1

1. Between 26 June 2017 and on or around March 2022, the firm failed to have in place a documented assessment of the risks of money laundering and terrorist financing to which its business was subject (a firm-wide risk assessment (FWRA) pursuant to Regulation 18 of the MLRs 2017); and/or
2. Between on or around March 2022 and 26 September 2022, the firm failed to have in place an adequate FWRA pursuant to Regulation 18 of the MLRs 2017; and/or
3. Between 26 June 2017 and on or around April 2023, the firm failed to have in place fully compliant policies, controls and procedures (PCPs) as required by Regulation 19 of the MLRs 2017; and/or
4. Between 26 June 2017 and on or around April 2023, the firm failed to regularly review and update its PCPs, as well as have measures in place to monitor and manage compliance with those, as required by Regulation 19(1)(b) and Regulation 19(3)(e) of the MLRs 2017.

In doing so, to the extent the conduct took place up to 25 November 2019, the firm

1. breached Principles 6 and 8 of the SRA Principles 2011, and
2. failed to achieve Outcome 7.5 of the SRA Code of Conduct 2011

and to the extent the conduct took place after 25 November 2019

1. breached Principle 2 of the SRA Principles 2019, and
2. breached Paragraph 2.1(a) SRA Code of Conduct for Firms (2019).

Allegation 2

On five sampled files, the firm failed to carry out client and matter risk assessments, as required by Regulations 28(12)(a)(ii) and 28(13) of the MLRs 2017.

In doing so, the firm:

1. breached Principle 2 of the SRA Principles 2019, and
2. breached Paragraph 2.1(a) of the SRA Code of Conduct for Firms (2019).

Decision on sanction

The firm was directed to pay a financial penalty of £12,989.68 and ordered to pay costs of £1,350.

This was because the firm's conduct was serious by reference to the following factors in the SRA Enforcement Strategy:

1. Its conduct was a breach of its regulatory obligations which persisted for longer than was reasonable. It demonstrated a pattern of non-compliance.
2. For a significant period of time the firm failed to have proper regard to the SRA's guidance and warning notices which explained what was required, the risks that failure to comply with AML requirements posed, and the regulatory consequences of failing to comply.
3. The firm was responsible for its own conduct which was serious and had the potential to cause harm to the public interest and to public confidence in the legal profession. This risk was heightened given the high proportion of the firm's work that was 'in scope' of the MLRs 2017.

In view of the above, the firm's conduct was placed in conduct band C which has a financial penalty of 1.6% to 3.2% of annual domestic turnover. In light of these factors, the firm's conduct was placed in the mid-range of this band at C3 (2.4% of annual domestic turnover).

The following mitigating factors were considered:

1. The firm co-operated with the SRA.
2. The firm had remedied the breaches.
3. There was no evidence that actual harm had materialised.

SRA Principles 2011

Principle 6

You must behave in a way that maintains the trust the public places in you and in the provision of legal services.

Principle 8

You must run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles.

SRA Code of Conduct 2011

Outcome 7.5

You comply with legislation applicable to your business, including anti-money laundering and data protection legislation.

SRA Principles 2019

Principle 2

You act in a way that upholds public trust and confidence in the solicitors' profession and in legal services provided by authorised persons.

SRA Code of Conduct for Firms (2019)

Paragraph 2.1(a)

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.