Martin Gaffney Legal Services Limited (Martin Gaffney Solicitors)
The Old Bank, 51 Commercial Street, Rothwell, Leeds , LS26 0AN
Recognised body
522085

Decision - Agreement

Outcome: Regulatory settlement agreement

Outcome date: 25 March 2026

Published date: 9 April 2026

Firm details

No detail provided:

Outcome details

This outcome was reached by agreement.

Decision details

Agreed outcome

Martin Gaffney Legal Services Limited T/A Martin Gaffney Solicitors (the Firm), a recognised body authorised and regulated by the Solicitors Regulation Authority (SRA) agrees to the following outcome to the investigation:

• it is fined £11,484
• to the publication of this agreement
• it will pay the costs of the investigation of £600.

Summary of Facts

We carried out an investigation into the firm following an inspection by our AML Proactive Supervision team. ,p>Our investigation identified areas of concern in relation to the firm’s compliance with The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017), the SRA Principles and the SRA Code of Conduct for Firms.

During our AML Investigation, we identified historic breaches under the MLRs 2017.

Customer Due Diligence measures (CDD) and Client and Matter Risk Assessments (CMRA)

Between 6 October 2011 and 25 June 2017, the firm failed to adequately determine the extent of customer due diligence measures on a risk-sensitive basis, or be able to demonstrate to its supervisory authority that the extent of the measures is appropriate in view of the risks of money laundering and terrorist financing, pursuant to Regulation 7(3) of the MLRs 2007.

Between 26 June 2017 and 7 August 2025, the firm failed to conduct client and matter risk assessments (CMRAs) at the relevant times on client files, as required by Regulation 28(12)(a)(ii) and 28(13) of the MLRs 2017.

A review of the client files examined during the inspection found that all eight files contained CMRAs completed only after the respective transactions had concluded. During the inspection visit, Mr Martin Gaffney (Mr Gaffney), the firm’s Compliance Officer for Legal Practice and Money Laundering Reporting Officer, informed the SRA AML Associate that the firm had not previously completed CMRAs for AML in scope purchases involving individual clients until it became aware of the upcoming inspection. In addition, Mr Gaffney also confirmed with the AML Associate that, from March 2025, the firm retrospectively completed CMRAs on eight hundred and six matters to prepare for the SRA inspection visit. The admission demonstrates the firm’s failure to conduct CMRAs on file at all and is paradoxically inconsistent with the firm’s own AML procedures, which require a risk assessment for every new client and matter. All inspected files were high risk conveyancing, yet there was no evidence of compliant risk assessments before notification of inspection. We note that the firm was utilising the SRA’s CMRA template published in October 2023. Consequently, such systemic failings constitute a breach of Regulations 28(12)(a)(ii) and 28(13) of the MLRs 2017.

The firm’s AML Questionnaire shows that 52% of its work falls within the scope of the MLRs 2017, including large volumes of high-risk conveyancing and probate work. Completing CMRAs only after notification demonstrates systemic weaknesses in the firm’s AML controls. Our records show the firm has carried out in scope work since 2010, when the SRA began collecting this data, consisting of high risk conveyancing. Consequently, the firm was required to comply with the MLRs 2007 at that time.

During our investigation, we requested samples of earlier risk assessments. From the documents provided, we identified historic breaches arising from the firm’s limited ability to apply or evidence risk based customer due diligence. This failure placed the firm in breach of Regulation 7(3) of the MLR 2007. Source of Funds (SoF)

A review of specific client files selected during the inspection found that three out of eight files lacked adequate Source of Funds (SoF) checks, or no evidence on file to demonstrate that the firm had scrutinised the source of the clients’ funds. This failure constitutes a breach of Regulation 28(11) of the MLRs 2017.

We identified that all three transactions were high value matters. As a result, the firm’s failure to conduct sufficient SoF checks and in some instances, to undertake any SoF check, created a risk that the firm could have been exposed to money laundering through these property transactions.

File 6213 consisted of a residential purchase for £245,000 and funded by the individual clients’ saving of £395,000. There was no evidence on file to indicate that any SoF checks had been completed. The transaction completed on 23 June 2024.

File 9565 consisted of a residential purchase of £100,000 by a commercial client, funded through a bridging loan and £28,184 from the client. There was no evidence on the file to indicate that any SoF checks had been completed on the client’s monies. The transaction completed on 1 October 2024.

File 8269 consisted of a cash purchase for a plot of land for £120,000. £121,178.45 was transferred to the firm’s client account. The file contained a bank statement from the client which was obtained after purchase monies had been transferred to the firm’s client account. In addition, there was no SoF checks completed before the firm received monies from the client. The transaction completion date is unknown.

Admissions

The firm makes the following admissions, which we accept, that by failing to comply with the MLRs 2017:

From 6 October 2011 to 24 November 2019 (when the SRA Handbook 2011 was in force), the firm has breached:

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 provision of legal services.

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 has failed to achieve:

Outcome 7.2 of the SRA Code of Conduct 2011 – which states that 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.

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.

From 25 November 2019 (when the SRA Standards and Regulations came into force) until August 2025 it has breached:

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.

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.

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.

Why a fine is an appropriate outcome

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.

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

This is to take account of the firm’s cooperation with the SRA’s Proactive Supervision and AML Investigations teams.

The firm began completing risk assessments on its existing client files only after receiving our inspection notification.

The firm’s admission to the breaches and remedying the breaches by utilising external consultant support, and finally in additional training provided to its staff.

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

The conduct showed a disregard for statutory and regulatory obligations and had the potential to cause harm, by facilitating dubious transactions that could have led to money laundering (and/or terrorist financing). This could have been avoided had the firm established adequate AML documentation and controls.

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.

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 rule

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.

Amount of the fine

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).

Having regard to the Guidance, the SRA and the firm agree that the nature of the misconduct was more serious (score of three). This is because although the firm failed to conduct CMRAs on files and document them from 26 June 2017 until August 2025, in breach of Regulation 28 of the MLRs 2017, and retrospectively completed CMRAs on eight hundred and six client files from March 2025, finally because the conduct continued after it was known to be improper. 

The seriousness is compounded by the fact that the firm also failed to adequately determine the extent of CCD measures on a risk-sensitive basis, or demonstrate such to its supervisory authority, that the extent of the measures is appropriate in view of the risks of money laundering and terrorist financing, pursuant to Regulation 7(3) of the MLRs 2007. This is evidenced by the sample of risk assessments the firm provided from its historical files.

Furthermore, on three of eight files, the firm failed to conduct sufficient, or any, source of fund checks, pursuant to Regulation 28(11)(a), therefore it failed to address provisions in identifying and scrutinising unusually large transactions, or patterns of the same.

We acknowledge the firm’s operational difficulties, including staff illness, the retirement of a senior fee earner, and reliance on short term locum support. However, these factors do not mitigate or excuse the firm’s prolonged non compliance with the MLRs 2007 and 2017, which impose mandatory obligations.

The SRA considers that the impact of the misconduct was medium (score of four). This is because conveyancing, probate and trust work are high risk areas, and although no client loss was identified, the failure to conduct sufficient SoF checks exposed the firm to a heightened risk of facilitating money laundering or terrorist financing.

Our records show that 55% of the firm’s work derives from conveyancing, which Government National Risk Assessment(s) and SRA Sectoral Risk Assessment(s) identify as high risk owing to the large sums that can be laundered through property transactions. Probate and trust work also presents significant money laundering risks, given the potential for large or complex asset transfers, reduced transparency, and opportunities for criminals to obscure beneficial ownership.

This vulnerability was exacerbated by the nature of the firm’s work, which falls within the scope of the MLRs 2017, with over half of its caseload comprising high risk conveyancing matters. In this context, the absence of documented risk assessments, SoF checks, and appropriate control measures exposed the firm to an increased risk of being used to facilitate money laundering or terrorist financing. These deficiencies indicate that the firm’s conduct had the potential to cause a moderate impact, given the inherent risks associated with property transactions and the regulatory obligations designed to mitigate them. This suggests the firm had the potential to cause moderate impact by this conduct.

The nature and impact scores add up to seven. The Guidance indicates a broad penalty bracket of between 1.6% and 3.2 % of the firm’s annual domestic turnover is appropriate.

The SRA considers a basic penalty towards the top of the bracket to be appropriate which determines a basic penalty of £12,760.

The SRA considers that the basic penalty should be reduced to £11,484. This reduction reflects the mitigation at paragraph 4.2 above.

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 to remove this, and the amount of the fine is £11,484.

Publication

The SRA considers it appropriate that this agreement is published in the interests of transparency in the regulatory and disciplinary process. The firm agrees to the publication of this agreement.

Acting in a way which is inconsistent with this agreement

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

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.

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.

Costs

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.