Haworth & Gallagher
39 Hamilton Square, Birkenhead , CH41 5BP
Recognised body
50916

Decision - Agreement

Outcome: Regulatory settlement agreement

Outcome date: 5 August 2026

Published date: 11 August 2026

Firm details

No detail provided:

Outcome details

This outcome was reached by agreement.

Decision details

1. Agreed outcome

1.1 Haworth & Gallagher (the firm), a Recognised body, authorised and regulated by the Solicitors Regulation Authority (SRA), agrees to the following outcomes to the investigation:

1. it is fined £25,000, under Rule 3.1(b) of the SRA Regulatory and Disciplinary Procedure Rules;
2. to the publication of this agreement, under Rule 9.2 of the SRA Regulatory and Disciplinary Procedure Rules; and
3. it will pay the costs of the investigation of £600, under Rule 10.1 and Schedule 1 of the SRA Regulatory and Disciplinary Procedure Rules.

2. Summary of Facts

2.1 We carried out an investigation into the firm following a desk-based review (DBR) by our AML Proactive Supervision Team.

2.2 Our DBR identified areas of concern in relation to the firm's compliance with the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017 (MLRs 2017), the SRA Principles 2011, the SRA Code of Conduct 2011, the SRA Principles [2019], and the SRA Code of Conduct for Firms [2019].

Policies, Controls and Procedures (PCPs)

2.3 The firm failed to maintain, review and update compliant PCPs to address the money laundering and terrorist financing risks identified in its FWRA between February 2018 and September 2025, contrary to Regulation 19 of the MLRs 2017.

Client and Matter Risk Assessment (CMRA)

2.4 The firm failed to carry out adequate and timely CMRAs in a number of matters, including files 13618, 14055, 14987 and 15119. It further identified 89 additional files where no CMRA had been completed, contrary to Regulations 28(12) and 28(13) of the MLRs 2017.

3. Allegations

3.1 Between 1 February 2018 and 1 September 2025, the firm failed to maintain compliant policies, controls, and procedures (PCPs) to mitigate and manage effectively the risks of money laundering and terrorist financing, identified in any risk assessment (FWRA), pursuant to Regulation 19(1)(a) of the MLRs 2017 and/or regularly review and update them pursuant to Regulation 19(1)(b) of the MLRs 2017.

3.2 In the matters of 13618 and 15119, the firm failed to sufficiently assess the level of risk, as required by Regulation 28(12) and Regulation 28(13) of the MLRs 2017, and 3.3 In matters of 14055 and 14987, the firm failed to conduct client and matter risk assessments (CMRAs) at the appropriate times, as required by Regulation 28(12)(a)(ii) and 28(13) of the MLRs 2017 and

3.4 During our AML Investigation, the firm identified a further eighty-nine files which failed to have a CMRA in place, as required by Regulation 28(12)(a)(ii) and Regulation 28(13) of the MLRs 2017.

4. Admissions

4.1 The firm admits, and the SRA accepts, that by failing to comply with the MLRs 2017 that it breached:

To the extent the conduct took place before 24 November 2019

4.2 Principle 6 of the SRA Principles 2011 - which states you must behave in a way that maintains the trust the public places in you and in the provisions of legal services.

4.3 Principle 8 of the SRA Principles 2011 - which states you must run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial risk management principles.

And the firm failed to achieve:

4.4 Outcome 7.2 of the SRA Code of Conduct 2011 - which states you have effective systems and controls in place to achieve and comply with all the principles, rules and outcomes and other requirements of the handbook, where applicable.

4.5 Outcome 7.3 of the SRA Code of Conduct 2011 - which states you must achieve these Outcomes: you identify, monitor, and manage risks to compliance with all the Principles, rules and outcomes and other requirements of the Handbook, if applicable to you, and take steps to address issues identified.

4.6 Outcome 7.5 of the SRA Code of Conduct 2011 - which states you comply with legislation applicable to your business, including anti-money laundering and data protection legislation.

To the extent the conduct took place from 25 November 2019 onwards:

4.7 Principle 2 of the SRA Principles 2019 - which states you act in a way that upholds public trust and confidence in the solicitors' profession and in legal services provided by authorised persons.

4.8 Paragraph 2.1(a) of the SRA Code of Conduct for Firms 2019 - which states 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.

4.9 Paragraph 2.2 of the SRA Code of Conduct for Firms - which states you keep and maintain records to demonstrate compliance with your obligations under the SRA's regulatory arrangements.

4.10 Paragraph 3.1 of the SRA Code of Conduct for Firms 2019 - which states that you keep up to date with and follow the law and regulation governing the way you work

5. Why a fine is an appropriate outcome

5.1 The SRA's Enforcement Strategy sets out its approach to the use of its enforcement powers where there has been a failure to meet its standards or requirements.

5.2 When considering the appropriate sanctions and controls in this matter, the SRA has taken into account the admissions made by firm and the following mitigation:

1. There has been no evidence of harm to consumers or third parties and there is a low risk of repetition.
2. The firm has assisted the SRA throughout the investigation and has shown remorse for its actions.
3. The firm did not financially benefit from the misconduct.

5.3 The SRA considers that a fine is the appropriate outcome because:

1. The conduct demonstrated a failure to comply with statutory and regulatory AML obligations, creating a risk of harm by potentially facilitating money laundering and terrorist financing. These deficiencies exposed the firm to an increased level of risk, particularly in conveyancing, a recognised high-risk area. The risk could have been mitigated had the firm maintained compliant PCPs since 2018 and ensured that CMRAs were appropriately conducted, documented and retained on all in-scope files
2. It was incumbent on the firm to meet the requirements set out in the MLRs 2017. The firm failed to do so. The public would expect a firm of solicitors to comply with its legal and regulatory obligations, to protect against these risks as a bare minimum.
3. The agreed outcome is a proportionate outcome in the public interest because it creates a credible deterrent to others and the issuing of such a sanction signifies the risk to the public, and the legal sector, that arises when solicitors do not comply with anti-money laundering legislation and their professional regulatory rules.
4. Rule 4.1 of the Regulatory and Disciplinary Procedure Rules states that a financial penalty may be appropriate to maintain professional standards and uphold public confidence in the solicitors' profession and in legal services provided by authorised persons. There is nothing within this Agreement which conflicts with Rule 4.1 of the Regulatory and Disciplinary Rules and on that basis, a financial penalty is appropriate.

6. Amount of the fine

6.1 The amount of the fine has been calculated in line with the SRA's published guidance on its approach to setting an appropriate financial penalty (the Guidance).

6.2 Having regard to the Guidance, the SRA, we, and the firm agree the nature of the conduct in this matter as low (score of one). This is because the firm did have PCPs in place between February 2018 and February 2024, albeit those PCPs were non-compliant. The firm should have implemented PCPs between 26 June 2017 and 31 January 2018 and failed to do so. However, the firm was not entirely oblivious to its obligations, having put PCPs in place approximately seven months after the requirement came into force.

6.3 The firm had compliant policies and procedures in place under Regulation 20 of the MLR 2007. In those circumstances, the seven-month period during which the firm operated without any PCPs is considered to present a low level of risk.

6.4 The firm's PCPs, first introduced in 2018, and the various subsequent versions demonstrate that they were reviewed and updated on a yearly basis. Although those iterations remained non-compliant up to February 2024, the deficiencies did not arise because of intentional misconduct, nor did the conduct continue once it was known to be improper.

6.5 Moreover, the firm had a CMRA process in place. However, CMRAs were absent from a further eighty-nine live client matters that fell within scope of the MLR 2017. Notwithstanding that failing, the existence of a CMRA process demonstrates that the firm had sought to implement measures intended to assess and mitigate AML risk.

6.6 The firm (in our view) became compliant with the MLRs 2017 because of our AML DBR and that the breach had arisen due to a failure to pay sufficient regard to money laundering regulations, published guidance, and SRA Warning Notices.

6.7 The impact of harm, or risk of harm, is assessed as medium (score of four). This is because, although there is no evidence that actual harm occurred as a result of the firm operating without compliant Regulation 19 documentation until September 2025, and subsequently failing to document CMRAs on a further eighty-nine files, those deficiencies nevertheless created the potential to cause moderate harm or loss.

6.8 Given the high proportion of in-scope work undertaken by the firm, the absence of compliant PCPs, together with the failure to document CMRAs on client files to demonstrate how any risks had been identified, assessed, and mitigated, exposed the firm to a real and ongoing risk of harm. The firm's inability to evidence its assessment and mitigation of AML risks undermined the effectiveness of its AML control framework and increased its exposure to money laundering risks.

6.9 Considering the scale of the firm's in-scope work and the potential exposure arising from these deficiencies, even in the absence of evidence of actual harm, a score of four is justified, proportionate, and reflective of the risk created by the misconduct.

6.10 The 'nature' of the conduct and the 'impact of harm or risk of harm' added together give a score of five. This places the penalty in Band "B," as directed by the Guidance, which indicates a broad penalty bracket of between 0.4% and 1.2% of the firm's annual domestic turnover.

6.11 Based on the evidence the firm has provided of its annual domestic turnover; this results in a basic penalty of £28,177.

6.12 The SRA considers that the basic penalty should be reduced to £25,000. This reflects the firm's transparency and cooperation with the AML Proactive Supervision team and AML Investigations team, along with putting in place compliant AML documents prior to the DBR admitting and thus remedying the firm's breaches.

6.13 The firm does not appear to have made any financial gain or received any other benefit as a result of its conduct. Therefore, no adjustment is necessary, and the financial penalty is £25,000.

7. Publication

7.1 Rule 9.2 of the SRA Regulatory and Disciplinary Procedure Rules states that any decision under Rule 3.1 or 3.2, including a Financial Penalty, shall be published unless the particular circumstances outweigh the public interest in publication.

7.2 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 interest of transparency in the regulatory and disciplinary process.

8. Acting in a way which is inconsistent with this agreement

8.1 The firm agrees that it will not deny the admissions made in this agreement or act in any way which is inconsistent with it.

8.2 If the firm denies the admissions, or acts in a way which is inconsistent with this agreement, the conduct which is subject to this agreement may be considered further by the SRA. That may result in a disciplinary outcome or a referral to the Solicitors Disciplinary Tribunal on the original facts and allegations.

8.3 Acting in a way which is inconsistent with this agreement may also constitute a separate breach of Principles 2 and 5 of the Principles and paragraph 3.2 of the Code of Conduct for Firms.

9. Costs

9.1 The firm agrees to pay the costs of the SRA's investigation in the sum of £600. Such costs are due within 28 days of a statement of costs due being issued by the SRA.