Hello again,
This week’s COLP Insider has a bit of everything: AI going badly wrong in court, a new SRA steer on ending retainers, the regulator trying to work out which AI complaints are really for it, and the SRA starting the search for a new Chair after what can fairly be described as a difficult chapter.
We also look at another batch of Legal Ombudsman public interest decisions, the latest tweak to the Law Society’s freelance solicitors practice note, and some uncomfortable reminders about workload, wellbeing and the pressure on legal professionals.
Compliance Corner answers a real-life AML question about rent deposits in commercial lease work. It’s a good one, because although the money is not being used to buy an asset, it is still moving through client account as part of a legal transaction.
And a quick plug before you scroll on: our next free webinar is on Wednesday 3 June at 12pm. This one is about SRA authorisations – new firms, ABSs, changing COLPs, COFAs, MLROs and MLCOs, ownership changes, EOTs, BOOM issues and how to avoid applications slowing down.
Register for the SRA authorisation webinar
Have a great weekend
Jon and the team
The Pinsent Masons AI case: supervision, shortcuts and professional responsibility
The recent Pinsent Masons judgment is a stark reminder that AI left to its own devices is a major compliance issue. A junior lawyer used AI to research a point of insolvency law, the output included invented statutory wording, and the error found its way into correspondence with the court. The court’s criticism did not stop with the junior lawyer: supervision, verification and candour all came under scrutiny.
The breakup clause: ending a retainer without creating a bigger problem
The SRA’s new guidance on terminating retainers is a useful reminder that ending a client relationship is not just a contractual issue. Firms need a good reason, reasonable notice and a proper record of the decision. The article looks at non-payment, difficult clients, abusive behaviour, conflicts, imminent hearings and the practical steps firms should take before telling a client they can no longer act.
The SRA and the profession: united we stand against AI complaints?
Eye-watering practising fee increases are on the cards – partly due to the volume of complaints being handled by the SRA. AI is likely to generate more complaints across the legal sector, but not every complaint about a law firm belongs with the SRA. This piece looks at the regulator’s challenge: separating serious professional issues from service complaints, tactical grievances and AI-assisted noise.
The music has stopped. Now the SRA is looking for a new chair
The SRA has begun the search for a new Board Chair, with Anna Bradley due to stand down after eight years. The official announcement is polite enough, but the profession’s mood is rather less forgiving. After Axiom Ince, SSB, PM Law, rising regulatory costs and the continuing debate about client money, the next Chair will inherit a regulator under real pressure to rebuild trust.
This is not just a change of personnel. It is a test of whether the SRA can listen better, spot risk earlier, act faster and show a bit more humility when things go wrong.
News and guidance
Legal Ombudsman publishes another batch of public interest decisions
The Legal Ombudsman has published a fresh group of named public interest decisions. As usual, they make for uncomfortable reading.
One firm was directed to pay compensation exceeding £20,000 after repeated procedural failures and poor communication. Another was directed to pay more than £23,000 plus £1,000 for distress after failing properly to explain the consequences of discontinuing a claim. It cost another £49,000 after a lease extension was not registered, leaving the client unable to remortgage on better terms.
The learning points are not particularly groundbreaking. Keeping clients updated. Explaining costs and risks clearly. Monitoring applications and deadlines. If something goes wrong, tell the client promptly and put it right.
The more awkward question is whether firms should be named in this way without wider context. These are largely service level issues, not professional misconduct.
LeO says publication is reserved for cases where there is a public interest, such as systemic failure, severe impact, very serious service failure or significant non-cooperation. That may be right in principle. But named decisions carry a massive reputational hit, without giving the balance of positive experiences and complaints that were dismissed.
Read all LeO public interest decisions
Law Society updates freelance solicitors practice note
The Law Society has updated its practice note on freelance solicitors. This looks like a set of useful clarifications rather than a major change in regulatory direction.
The core freelance solicitor model remains unchanged. The note continues to emphasise the restrictions around employing others, holding client money and the requirement for adequate and appropriate professional indemnity insurance where reserved legal activities are carried out.
The update now expressly confirms that solicitors carrying out pro bono work outside a firm or organisation will not necessarily be treated as freelance solicitors simply because they are acting independently. It also clarifies the position for solicitors administering oaths or statutory declarations outside their employment, provided this is not being done by way of business.
The Law Society has also added commentary around increased SRA enforcement activity relating to the Transparency Rules, together with a reference to the government’s proposed reforms to AML supervision.
Read the Law Society practice note
CLC workplace and diversity survey: workload pressure is a compliance issue too
The CLC’s workplace and diversity survey is another reminder that conveyancing and probate teams are operating under real pressure. Workload is often discussed as a staffing or wellbeing issue, but it is also a compliance issue.
When teams are stretched, the risks are predictable. You tend to get more missed deadlines, less attention to detail, poorer judgment and reduced client service levels. Those are exactly the sorts of issues that later appear in complaints, negligence claims and regulatory reviews.
But law firm leaders can’t just tell people to cope better. If workload is consistently outstripping capacity, they need to treat that as a risk indicator in itself. Matter allocation, supervision, training, file review and client communication all need to reflect the reality of the team’s capacity.
The Solicitors’ Charity Big Report: pressure is showing
The Solicitors’ Charity’s Big Report 2025/26 also gives a sobering snapshot of pressure across the profession. The charity says financial pressure, mental health concerns and career uncertainty are having a direct impact on individuals, firms and the wider profession.
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Compliance corner: rent deposits and source of funds
Q: We act for tenants taking commercial leases. From time to time, we receive rent deposits from our tenant clients and pay them over to the landlord’s solicitors as part of the lease transaction.
The money is not being used to buy an asset; it is being provided as security for the tenant’s obligations under the lease. But there still seems to be a risk, particularly if the transaction aborts and the rent deposit needs to be returned. What source of funds checks should we be doing? And if the deposit comes back from the landlord or the landlord’s solicitor, do we need to do source of funds checks on that money too?
A: Your instinct is broadly right: this is a risk-based source of funds issue, not a rule that requires a full forensic investigation into every rent deposit.
The starting point is your own client. You are acting for the tenant, so your AML focus should be on understanding the tenant, the purpose of the transaction, the commercial rationale for the lease, the amount of the deposit, and where the tenant’s funds are coming from.
That does not mean you need to “prove” that the funds are clean. That is not the test. You should, however, record the questions asked, the answers given and any supporting material obtained.
So, in a straightforward commercial lease, if the tenant is a known trading business, the rent deposit is proportionate to the lease terms, the money comes from the tenant’s own business account, and the transaction has an obvious commercial purpose, the source of funds work may be fairly light-touch. You would still want to record the position: what the deposit is for, how it is calculated, where the funds are expected to come from, and why that makes sense in the context of the client and the matter.
The position changes if there are red flags….
New JBL training resources
Conflicts of interest
Conflicts can be deceptively difficult. Everyone understands the basic idea, but the tricky questions tend to arise in the grey areas: when interests are aligned but not identical, when confidentiality and disclosure pull in different directions, or when a longstanding client relationship makes it tempting to find a way through.
Our Conflicts of Interest course gives law firm teams a practical refresher on the core rules, the two main exceptions, safeguards and information barriers, high-risk practice areas, and what to do when a conflict issue emerges mid-matter. It also includes scenario-based activities and an assessment. Successful learners receive a certificate.
The course is currently included for all JBL Gold clients. Everyone else can buy individual access through the JBL training platform. Larger firms looking to roll our training library out across teams should contact us for group pricing.
Free CPD
Next free webinar: SRA authorisation – new firms, ABSs, compliance officers and ownership changes
Wednesday 3 June at 12pm.
This session will focus on the authorisation issues that keep cropping up in practice: applying for a new law firm or ABS, changing COLPs, COFAs, MLROs and MLCOs, converting an existing firm to an Employee Ownership Trust, dealing with ownership changes, and understanding when SRA approval is needed.
We will keep it practical. Expect a walk-through of common scenarios, the forms involved, timing traps, BOOM/AML approval issues, and the points that tend to slow applications down.
Disciplinary watch
Mohamed Faisal Mamon – Suspended for two years after signing a misleading professional indemnity insurance proposal form, failing to notify the SRA of the firm entering the extended indemnity period and cessation period, continuing to practise without qualifying insurance, and accounts records failures. Recklessness was admitted.
Jonathan Lea – Received a 12-month suspension, suspended for 24 months, after admitted social media misconduct. The allegations concerned inappropriate, offensive and antisemitic posts and comments on Twitter/X between 2015 and 2023.
John Kishin Navani – Received a 12-month suspension, suspended for two years. The SDT found multiple allegations proved concerning inappropriate conduct, harassment and bullying towards junior female colleagues; one allegation was found to be sexually motivated.
Louisa Frances Clapton – Struck off after admitting dishonesty. The case involved a drink-driving and no-insurance conviction, inaccurate or misleading information given to the SRA about delays in responding to requests for information, and amended emails forwarded to her employer which misrepresented what she had told the SRA.
Mandeep Sunny Singh Thandi – Struck off after admitting dishonest conduct. He received payments from a client into his personal bank account which the client intended to be settlement of the firm’s fees, did not open a file on the firm’s systems, and did not transfer the money to the firm’s client account.
Robert Mannering Sedgwick – Struck off after the SDT found all allegations proved. The case concerned the preparation, execution and circulation of backdated documents connected with London Capital & Finance and related entities, and an obvious conflict arising from his role as sole director of a security trustee intended to protect bondholders while also acting for borrowers or connected persons.
Adelle Stoddart – Made subject to a section 43 order. The SRA decision records that, while working as a practice manager, she misappropriated £700k and falsified documents. As a result, she cannot work for an SRA-regulated firm without prior permission.
Darren Shaw – Made subject to a section 43 order. The SRA record states that the SDT heard the matter on 12 May 2026 and made an order restricting his employment or involvement in SRA-regulated practice without permission. The underlying allegations concerned inappropriate, unwanted and uninvited conduct during and after a work event.
Need an independent AML audit?
If your firm has not had a proper Regulation 21 independent AML audit recently, or your last audit produced a long action list that nobody has quite got round to finishing, we can help. Practical, proportionate, evidence-led and designed for law firms.
Let’s talk about ethics, baby
The SRA wants solicitors to talk about ethics every year. Cue the eye rolls?
Not so fast. Sophie Cisler looks at the SRA’s continuing competence consultation and argues that, if done properly, facilitated ethics discussions could be genuinely useful. Real ethical problems are rarely neat, obvious or theoretical. They emerge in pressure, drift, awkward clients, commercial demands and “everyone does it” thinking.
This article explores how firms can make ethics discussions practical, psychologically safe and relevant to the work actually landing on people’s desks.
How to avoid a £160k SRA fine (and it’s not AML compliance)
A high-profile firm has been fined £160,000 by the SRA. And no, this one is not about AML.
The decision is a reminder that fast-growing, complex firms need systems that can keep pace with the business. The issues were related to legacy client account management – residual client balances, unreconciled client money etc. Not uncommon in a post-merger period.
This article looks at what went wrong, why the fine was so significant, and what other firms can learn from it before the SRA comes knocking.
The SRA Business Plan 2026-2027: If the profession is paying for the reset, it deserves accountability
The SRA is proposing a 29% budget increase for 2026/27. The profession is being asked to pay more through practising certificate fees, firm fees and compensation fund contributions.
But the real question is not just how much solicitors are being asked to pay. It is what they are being asked to pay for.
This article looks at the SRA’s proposed “reset”, the pressure created by major firm failures, the continuing client money debate, and why any significant increase in cost must come with proper accountability.
Webinar write up – “When the SRA comes knocking: how firms should respond to audits, investigations and regulatory contact”
What should you do when the SRA gets in touch?
Our latest webinar looked at audits, investigations, supervisory visits and regulatory contact from the people who have seen the process from both sides. We covered how to respond to information requests, how to avoid making things worse, when to involve senior management, and why the first response often sets the tone.
This write-up pulls together the key practical points for COLPs, COFAs, MLROs and anyone likely to be dragged into the room when the regulator appears.
