NOVEMBER 2025 – ARTICLES & ITEMS OF INTEREST
NOVEMBER 2025 – ARTICLES & ITEMS OF INTEREST
REAL-LIFE EXAMPLES OF SUSPICIONS OF MONEY LAUNDERING RELATING TO SOLICITORS OR CLIENTS OF SOLICITORS
The November issue of the Law Society Gazette contains a Practice Note from the Money Laundering Reporting Committee ‘Money Laundering and Terrorist Financing – Law Society Obligations’. This practice note contains six real-life anonymised examples of suspicions of money-laundering and relevant offences relating to solicitors or clients of solicitors that arose during regulatory inspections, and where the MLRC decided to make reports.
One example related to an aborted transaction. A client instructed the solicitor to act in the purchase of a commercial property valued at €500,000. The client file contained proof of identity and proof of address documentation provided by the client to the solicitor. The client risk assessment on file noted that the client had instructed that the purchase would be funded by a combination of personal savings and a bank loan.
The client put the solicitor in funds for the deposit to secure the property.
The solicitor requested the client to provide supporting documentation, including bank statements and loan approval. Prior to providing the documentation, the client suddenly informed the solicitor that they no longer wished to proceed with the purchase and asked for the return of their deposit. No explanation was proffered by the client.
The MLRC considered the matter and directed that it be reported pursuant to section 63(4) CJA 2010 and section 19 CJA 2011.
Other examples relate to: – Undrawn costs in solicitor firm’s client account, Beneficiary refusing to accept full amount of bequest, Cyberfraud incident, Large cash amount/SOW/SOF and another aborted transaction.
To view this practice note and the real-life examples see page 53 of Gazette Magazine
LAW SOCIETY OF IRELAND PUBLISHES GENERATIVE AI GUIDANCE FOR SOLICITORS
On the 12 November 2025, the Law Society of Ireland top stories announced the Law Society has published guidance for solicitors on the ethical and responsible use of generative AI (GenAI) which highlights the potential uses and limitations of tools such as ChatGPT, Copilot, and similar solutions.
The guidance acknowledges that the field is evolving rapidly, adding that its focus is on the fundamentals of GenAI and risks most relevant to everyday legal practice. The Law Society says that additional guidance and further updates will be issued as the technology continues to evolve and as new issues or use cases arise in legal practice.
The guidance provides explanations of AI, GenAI, how GenAI works, and the key characteristics of GenAI and large language models (LLMs). The document includes a list of legal tasks suitable for LLMs – including simple administrative tasks, summarising documents, and creating checklists. It warns, however, against the use of LLMs for legal advice, reviewing documents, citing legislation or case law, or the retrieval of real-time information.
The guidance highlights potential uses of GenAI that could lead to a breach of professional obligations in areas such as confidentiality, professional competence and independence.
The guidance urges solicitors to set out permitted uses, accountability, safeguards, and guidelines to ensure compliance with GDPR, client confidentiality, privilege, and other obligations.
To view this article in full see Law Society sets out GenAI guidance for solicitors
EIGHT TIPS TO USE AI MORE SUSTAINABLY
On the 13 November 2025, Hannah Gardner, Law Society Sustainability Committee member and Legal Counsel, wrote an article appearing on the website for the Law Society of Scotland titled “Eight tips to use AI more sustainably”.
She states ‘Use of tools such as CoPilot produces ‘tokens’ that use computational resources. The longer your prompt or output, the more tokens are produced, and the increased computation leads to higher energy consumption. There are some quick and easy changes that we can make in our daily use of generative AI to continue to receive the benefits from the tools, but to do so more sustainably.’
‘The following are some low-carbon prompting tips, which you can put into practice:
- Be specific and goal-oriented. For example, ‘List three key impacts of climate change on agriculture, each under 20 words’. Specific prompts use fewer tokens.
- No need to be polite! Avoid ‘please’ or ‘can you’. Instead, give direct instructions: ‘Do X’. This will also generate more accurate results.
- Limit output with caps. For example, ‘Summarise this regulation in 100 words’. This prevents token overuse.
- Ask for tables or lists. This forces concise responses.
- Combine tasks in one prompt. When you prompt, you are ‘calling’ the model. If you combine tasks – asking for various actions in one prompt – you are making fewer model calls, so generating lower emissions.
- Prefer estimates when you don’t need precision. For example, ‘Approximately how many people live in Scotland’. High precision requests demand more resources.
- Trim context. Don’t upload huge documents, if you only really need the AI tool to look at one section.
- Reduce default AI use in searches. Search engines like Google and Bing now automatically use their LLM models to give you an immediate and consolidated response. If you put ‘-AI’ into the search bar when you ask it a question, it won’t use generative AI.’
To view this article in full see Eight tips to use AI more sustainably | Law Society of Scotland
AML – ONE THIRD OF INSPECTED FIRMS NOT COMPLIANT – SRA REVEALS IN ANNUAL REPORT
On the 3 November 2025, the Law Society of England and Wales published an article titled ‘AML – One third of inspected firms not complaint – SRA reveals in annual report’
Introducing the annual report, Paul Philip, Chief Executive, said he was proud of the SRA’s work. “This past year has been marked by significant progress in our efforts to prevent and detect money laundering, as we continue to prioritise anti-money laundering initiatives. While most firms demonstrated a strong understanding of their obligations and a clear commitment to compliance, the identification of non-compliance in nearly a third of cases highlights the continued need for sector-wide improvement and sustained regulatory attention.”
Examples of non-compliance included failure to carry out client due diligence or risk assessments or a failure to train staff.
The article contains a link to the annual report which includes chapters on the SRA findings in Customer Due Diligence and Source of Funds/Wealth.
To view this article in full see AML: One third of inspected firms not compliant, SRA reveals in annual report | Law Gazette
CYBER SECURITY MANAGEMENT
On the 5 November 2025, the Law Society of England and Wales published a sponsored content article titled ‘Cyber Management – A simple truth for Law Firm leaders’.
Lindsay Hill, Solicitor and CEO of Mitigo Cybersecurity states “Law firms are being persuaded, or persuading themselves, that buying technical ‘solutions’ such as software or monitoring tools, or even cyber insurance will make them safe. But they’re buying solutions before properly identifying the problems they need to solve. In other words, they are getting the order wrong. It’s the equivalent of prescribing medicine before you’ve diagnosed the illness.”
He states “The starting point is a full, comprehensive risk assessment to identify precisely where your vulnerabilities lie across systems, people, working arrangements, governance, and your supply chain. Without this, you’re spending money blind (you are also failing to comply with your legal obligations).”
The result will be lots of technology, but gaping vulnerabilities.
He writes ‘Ask yourself some questions. Where are your documented cyber risk and vulnerability assessments? Who undertook them and what is their cyber risk management experience and expertise? What visibility have they given you on the actual risks your firm faces? How do your technical and non-technical measures match up to control the risks (technical and non-technical) which have been identified? What proof do you have that they are working as intended?’
To view this article in full see Mitigo Cybersecurity insight: Cyber risk management – A simple truth for law firm leaders | Law Gazette
RURAL SOLICITORS
In the November issue of the Law Society Gazette, Eamon Harrington Law Society President discusses rural solicitors. He states there have been several initiatives by the Law Society to support small practices in rural areas. Legal Tech Hub, Small Practice Traineeship Grant, PPC Hybrid Course, Access Funding Programs. He also stated the Law Society has made further recommendations to Government, including the need to invest in business supports and to introduce limited liability for sole practitioners.
To view this article, see page 3 of Gazette Magazine
SRA FINES FIRM £23,000 OVER SHORTCOMINGS IN CLIENT CHECKS
On the 24 November 2025 the Law Society of England and Wales published an article relating to a SRA fine over shortcomings in client checks.
The Solicitors Regulation Authority found that over the course of two and a half years, Charles Douglas Solicitors acted for a foreign politically exposed person (PEP) in 194 matters (the majority were aborted, but 56 proceeded to completion).
The SRA reviewed the firm’s files and found it had obtained ‘substantial’ information about the PEP’s sources of funds and wealth. But the firm could not demonstrate that it had taken adequate measures to check where a small fraction of the funds had come from. It also found an issue regarding the questions asked during onboarding about the wealth derived from overseas business interests.
The SRA acknowledged that the firm completed checks, but the financial statements of the overseas business interests provided by qualified overseas accountants ‘raised concerns’ as to the scrutiny applied. This is because those financial statements showed substantial revenue, minimal business expenditure and most of the net profit being paid out immediately as dividends.
The regulator and the firm agreed that in this case the harm or risk of harm was low, but although enhanced measures were applied, these were not fully compliant with the requirements of the MLRs 2017.
To view this article in full see Mayfair law firm fined £23,000 for inadequate money laundering checks on high-risk PEP client | Law Gazette
SECTION 87 OF THE CRIMINAL JUSTICE (MONEY LAUNDERING AND TERRORIST FINANCING) ACT 2010 DISCUSSED
The November edition of the Law Society gazette contains a Practice Note from the Business committee relating to ‘Share option or participation schemes: nominee and trust arrangements’.
Under Regulatory context the practice direction states ‘The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, which implements the Third EU Anti-Money-Laundering Directive (2005/60/EC), provides that any person or entity wishing to carry on business as a trust or company service provider (TCSP) must obtain authorisation from the Minister for Justice. Under section 87 of the 2010 act, it is an offence to operate as a TCSP without such authorisation.
Following receipt of a query from a colleague regarding whether a nominee company holding shares under an employee share scheme requires authorisation under the 2010 act, the committee sought the opinion of senior counsel.
Counsel advised that there is an arguable position that such nominee arrangements may fall outside the statutory definition of a TCSP. However, counsel acknowledged that, on a literal interpretation of the definition, there is a risk that the Department of Justice may take a contrary view.
To clarify the position, the Law Society sought guidance directly from the Department of Justice, which subsequently confirmed its view: nominee companies involved in the types of arrangements described above do fall within the definition of a TCSP under the 2010 act and must therefore obtain the necessary authorisation from the minister.’
To view this practice note see page 52 of Gazette Magazine
AML AND TERRORIST FINANCING – ROLE OF THE ROPC
The November edition of the Law Society Gazette contains a Practice Note from the Money Laundering Reporting Committee relating to ‘AML and terrorist financing: role of the ROPC’.
A key role the committee carries out is to oversee compliance by solicitors with AML obligations.
As the Regulation Department builds out the newly created AML unit as part of its current strategy, it is examining its current AML/CFT guidance to develop more practical educational delivery channels to enable solicitors to comply.
As part of the Society’s competent-authority monitoring process, solicitors are required to demonstrate that they have policies and procedures in place for the prevention and detection of money-laundering and terrorist-financing offences and that they are applying those procedures.
Solicitors are reminded that failure to comply with the legislation may result in the committee taking one or more of the following courses of action:
- Requiring you to attend a meeting of the Regulation of Practice Committee to explain failure to comply,
- Requiring you to take remedial action, including a direction to undertake an external independent audit pursuant to regulation 5(10)(c),
- Specify a measure provided for in section 71 of the Legal Services Regulation Act 2015, including (but not limited to) directing participation in a professional competence scheme,
- Imposition of a levy pursuant to regulation 4(6)(d),
- Referral to the Legal Practitioners Disciplinary Tribunal.
To view this practice note in full see page 52 of Gazette Magazine