Massive victory for the SRA’s efforts to DENTONS to account for AML compliance failures

1. The Solicitors Regulation Authority [SRA] has won its appeal against a tribunal ruling that

• • Breaches of anti-money laundering (AML) rules by the world’s largest global law firm, Dentons, didn’t amount to professional misconduct.

2. The Tribunal’s 2024 94-page judgment provides an exhaustive recital of the parties’ arguments on the issues, but its own “findings” on the allegations are set out in under four pages. While brevity can be a virtue, the Tribunal’s conclusions are barely reasoned – often simply adopting a position rather than grappling with competing arguments.
   • https://solicitorstribunal.org.uk/wp-content/uploads/2023/11/12476.2023.Dentons.Judgment.pdf

3. This is a massive victory for the SRA’s efforts to hold big law firms to account for AML compliance.
4. Dentons failed to adequately check the source of funds and wealth of a client who was subsequently convicted of embezzling funds while he was chairman of a state-owned bank in a former Soviet country.

• • The judgment said the ‘only evaluation’ required by the SDT ‘was whether or not the firm had complied with regulation 14 of the MLRs 2007’.
  • Read the judgement - https://caselaw.nationalarchives.gov.uk/ewhc/admin/2025/535   

5. While the Tribunal found Dentons did break AML rules, it reached the baffling conclusion that

• • These breaches of the law were not “serious”, and
  • Did not amount to professional misconduct,
  • So, the firm was let off the hook without any sanction.

6. On appeal, the SRA

• • Didn’t try to challenge the tribunal’s finding that the AML breaches were not “serious.”
  • But advanced a narrow argument that any breach of AML rules is also a breach of the SRA principle that solicitors and law firms must “comply with legislation”:

7. With all the factual and evaluative findings of the Tribunal left untouched, the SRA’s grounds of appeal are limited to raising a very narrow question of law: is there an additional or threshold requirement of seriousness for a breach of the MLRs to amount to “professional misconduct”?
8. The answer to this narrow legal question essentially turns on the interpretation of two judgments of the Divisional Court – 

• • Solicitors Regulation Authority v Day (Leigh Day) https://caselaw.nationalarchives.gov.uk/ewhc/admin/2018/2726 and 
  • Beckwith v Solicitors Regulation Authority. https://caselaw.nationalarchives.gov.uk/ewhc/admin/2020/3231?query=Solicitors+Regulation+Authority+Beckwith

9. Agreeing with the SRA, the High Court ruled that

• • “The mistaken approach of the Tribunal influenced the decision as a whole.”
  • With the result that “the decision will be quashed in its entirety”.

10. Today’s judgment is a welcome recognition that

• • The Tribunal’s approach opened up a troubling GAP between the AML regime and the SRA’s professional standards.
  • These GAPS must be addressed to ensure law firms act as ethical gatekeepers and not enablers of dirty money: 

LONGER READ

11. The Solicitors Regulation Authority has succeeded in its appeal against the SDT’s dismissal of allegations against international firm Dentons UK and the Middle East over alleged historical breaches of money laundering rules.
12. Mrs Justice Lang

• • Quashed the Solicitors Disciplinary Tribunal’s decision today and
  • Remitted the case to a freshly constituted panel.

13. At a six-day hearing in March 2024, the SDT dismissed charges that Dentons had breached money laundering regulations by retaining a client from 2013 to 2017.

• • The firm denied all allegations against it.
  • The tribunal found the firm’s ‘inadvertent’ breach ‘fell within the small category of cases where wrongdoing did not amount to professional misconduct’.

14. In the High Court judgment in Solicitors Regulation Authority Limited v Dentons UK and Middle East LLP,  the judge said

• • She agreed with the primary submission made by the SRA.

15. Noting the authorities of previous appeals in Leigh Day and Beckwith, the judge said,

• • 'There is no universal requirement that breaches of the principles and the outcomes can only be established where the requirements of seriousness, culpability and reprehensible conduct are met. Such requirements only arise when inherent in the rule in question.’

16. It continued:

• • ‘Breach of the standards in Principle 7 and Outcome 7.5 was established once the tribunal made the anterior finding that a legal/regulatory obligation or legislation applicable to the business had not been complied with.
  • ’ The SDT, therefore, ‘erred’ in proceeding to ask itself whether the firm had breached the principles and the code as alleged.

17. The judge said:

• • ‘It could not properly be inferred from the language of Principle 7 and Outcome 7.5, in the statutory context, that an additional requirement of seriousness, culpability and reprehensible conduct had to be met.'

18. Acknowledging the ‘stigma of an adverse disciplinary finding’, the judge said SRA guidance

• • ‘Indicates that only serious breaches of the anti-money laundering legislation will progress to disciplinary proceedings, a safeguard against over-zealous enforcement’.

19. THE JUDGE said:

• • The tribunal’s findings that the firm’s breach was ‘inadvertent and committed in good faith’,
  • That the violation was not systematic and
  • That the SRA had commended the firm for its anti-money laundering systems and controls, which had been deployed for each of the property transactions in issue,
  • Were mitigation but ‘did not justify’ the dismissal of the allegation against Dentons ‘when there was a clear breach of the MLRs 2007’.

20. The judge allowed the appeal and said costs should follow the event, and the SRA was entitled to the ‘reasonable costs’ of the first tribunal hearing.

Source

• SRA succeeds in appeal against SDT's decision in Dentons AML case | Law Gazette https://www.lawgazette.co.uk/news/sra-overturns-dentons-acquittal-in-aml-case/5122626.article
• Read the judgement - https://caselaw.nationalarchives.gov.uk/ewhc/admin/2025/535

Other sources

31 January 2025 | 5-minute read

• https://www.spotlightcorruption.org/a-serious-mistake-dentons-aml-case/   

5 September 2024 | 20-minute read

• https://www.spotlightcorruption.org/falling-money-laundering-enforcement/