Firm fined after failing to promptly return client funds and report breaches
National law firm Taylor Rose has been fined £160,000 by the Solicitors Regulation Authority for a series of longstanding breaches of the accounts rules, including failures to return client money and maintain proper financial controls.
The regulator found that the firm had failed to promptly return client money over an extended period, in some cases stretching back to 2018 and continuing until 2025.
It also identified weaknesses in the firm’s systems and controls, including failures to properly reconcile its main client account and a growing number of unreconciled balances that were carried forward month after month.
The breaches were described as having continued “longer than was reasonable”, with the firm also failing to report potential breaches to the regulator in a timely manner.
A particular concern was the handling of residual client balances, some of which were retained for years without being returned, raising issues around compliance with core obligations to safeguard client money.
The SRA said the failings reflected a lack of effective systems and controls over a sustained period, rather than isolated errors, placing the case towards the more serious end of regulatory enforcement.
The regulator’s investigation began in August 2023 and ultimately led to the firm entering into a compliance plan, which it completed in 2025 to bring its accounts back into line.
Taylor Rose attributed many of the issues to legacy problems arising from its acquisition of other firms between 2018 and 2020, which left it dealing with large volumes of historic client balances.
As an alternative business structure, the firm was subject to a higher fining limit than traditional firms, allowing the SRA to impose a penalty significantly above the usual £25,000 cap.
In mitigation, the regulator noted that the firm had cooperated with the investigation, shown insight into the failings and taken steps to remedy them, including introducing stronger financial controls and restructuring its finance function.
The firm said no client loss had been identified and that it has since implemented “robust procedures” to prevent similar issues arising in future.
The fine, which represents a percentage of the firm’s turnover, was reduced to reflect those mitigating factors but still stands as one of the more significant sanctions imposed by the SRA in recent years.
The firm was also ordered to pay costs of £1,350.