The recent resignation of the Deputy Prime Minister, Housing Secretary, and Deputy Leader of the Labour Party, after she admitted to underpaying tax to buy a flat in Hove, has been the political storm of the moment, until Lord Mandelson further distracted politics. The Rayner Affair (or Raynergate if you prefer) contains practical and transferable lessons for law firms.
If you are hoping for a critique of the politics underlying this, this is neither the place nor the time for such an analysis. The lessons, though, are useful for law firms, as they bring to life issues that we regularly discuss with both clients and those who attend the training sessions that we run.
Engagement Letter Lessons
Sir Laurie Magnus CBE, the Independent Advisor on Ministerial Standards noted in his report, published on the 5th September 2025, as follows:
“…that advice was qualified by the acknowledgement that it did not constitute expert tax advice and was accompanied by a suggestion, or in one case a recommendation, that specific tax advice be obtained”.
It is not clear from the documents that this was contained within the engagement letter, but as a matter of good practice, every law firm engagement letter, whether a firm regulated by the Solicitors Regulation Authority (SRA), or by the Council for Licenced Conveyance (CLC) should include the exclusion of expert tax advice unless your firm is one of the very few that offers this.
Our own engagement letter adheres to this basic principle, and I have not drafted an engagement letter in almost 20 years of advising law firms on them without including this opt-out provision.
Even if your precedent contains this, it is worth checking that every single engagement letter leaving your firm contains the tax advice exclusion, not because there will be another politician through your doors shortly to cause a national scandal with their tax affairs, but because actually excluding areas outside your expertise is good practice.
In addition to this being in the engagement letter, it is implied from Sir Laurie’s report that the advice itself also caveated this important non-expert context. Again, the lessons for law firms are clear, when you are giving advice, matters which are on the fringes of your expertise or outside of your expertise should be flagged and outlined to clients. Again, this is good practice and probably should be firmly embedded in every law firm in the country, but my question in this blog is when was the last time you and your risk team checked the point?
In my view, file reviews should be looking at excluded areas of advice, as should one-to-one reviews.
The ethical implications
The final paragraph of Sir Laurie’s report states as follows:
“I believe Ms Rayner, has acted with integrity and with a dedicated and exemplary commitment to public service. I consider, however, that her unfortunate failure to settle her SDLT liability at the correct level, coupled with the fact that this was established only following intensive public scrutiny, leads me to advise you that, in relation to this matter, she cannot be considered to have met the “highest possible standards of proper conduct” as envisaged by the Code. Accordingly, it is with deep regret that I must advise you in these circumstances, I consider the Code to have been breached.”
The wording and the implications upon the importance of wider and higher professional duties will be familiar to all professionals, especially solicitors. Politicians are of course not a regulated profession, one can only imagine the horrendous implications if they were held to the far higher standards of the solicitors profession given the conduct of several high profile politicians across the world, nevertheless there is a law firm and solicitor (and wider lawyer) lesson to be learned and it is that you are potentially subject to intense scrutiny, and you do not have to comply just with the letter of the law, but with the wider contextualised obligations to operate at a higher standard of proper conduct.
The SRA Principles 2019 encapsulate this in the introductory paragraph, where they note as follows:
“The SRA Principles comprise of the fundamental tenets of ethical behaviour that we expect all those that we regulate to uphold….should the Principles come in to conflict, those which safeguard the wider public interest (such as the rule of law, and public confidence in a trustworthy solicitor’s profession, and a safe and effective market for regulated services), take precedence over an individual client’s interest.”
Conclusion
The Angela Rayner Affair is not unique in politics; it is similar to scandals under the previous government over recent years, which is why, at the outset, I made the point that this is not a political commentary. The importance, however, of ensuring that legal advice is fair, clear, and measured, and that the nuances of it are recorded in writing for the client’s benefit, does shine through.
Equally, the role of the independent ethical advisor on ministerial standards brings into sharp focus the importance of obligations arising from Principles and Codes of Conduct.
For me, this latest political noise gives Compliance Officers for Legal Practice (COLPs), and Directors of Risk, and Managing Partners, a simple internal training lesson to deliver to remind all of the team on the importance of ethics, holding ourselves to a higher standard than somebody not in the same professional position, and ensuring that important advice is confirmed in writing, including any exclusions.
In my experience, it is far better to review and verify what you think is the norm in your law firm now, rather than when the SRA are applying a similar level of scrutiny to the court of public opinion and the media that politicians are subjected to.
Take a look at how your team are doing and make sure you use the opportunity to convey those simple, reputationally saving steps. The law firms impacted by this matter, no doubt, will be delighted that the limitations of their advice, including the explicit invitation to take specialist tax advice, have been widely reported. It is a reputational issue for law firms, and those firms can, despite what must have been a trying few days, welcome that confirmation that they had taken those basic steps clearly and that the Independent Advisor on Ministerial Standards accepted it.