Why Your Solicitor Asks for ID – Understanding Anti-Money Laundering Requirements

If you’ve ever instructed a solicitor and been asked to provide a passport or a bank statement, or other personal documents, you might have wondered: Why all the red tape?

The answer lies in legal compliance—specifically, Anti-Money Laundering (AML) regulations, which solicitors are legally required to follow. While these checks may seem inconvenient, they play a critical role in protecting the integrity of the legal and financial systems—and in many ways, they’re also in place to protect you.

Let’s unpack what AML means for you, and why your solicitor must carry out these important checks.

What Is Money Laundering?

Money laundering is the process of disguising the origins of illegally obtained money so that it appears to be from a legitimate source. Criminals—including those involved in drug trafficking, fraud, tax evasion, and terrorism—try to “clean” their funds through financial systems and even legal services.

Solicitors, especially those handling transactions involving large sums of money (e.g., conveyancing, probate or business sales), are prime targets for abuse by people looking to legitimise their funds. That’s why strict AML measures are in place across the legal profession.

The Solicitor’s Role in Preventing Crime

As solicitors, we are on the front lines of the fight against money laundering and terrorist financing. We’re required by law to understand and comply with AML regulations to prevent our services from being misused.

This includes:

Verifying client identity
Assessing the risk of money laundering
Reporting suspicious activity
Maintaining accurate records.

Even though this work happens behind the scenes, it’s essential to upholding the rule of law and maintaining public trust in legal and financial services. Failure to comply with AML regulations can result in severe consequences for a solicitor, including fines, reputation damage, and even criminal liability.

Here’s why it matters:

Protecting Clients: Identity verification and source-of-funds checks prevent clients from falling victim to fraud or identity theft, which can have devastating financial and emotional consequences
Safeguarding Solicitors: Compliance protects solicitors’ firms from legal penalties, reputational damage, and unwitting involvement in criminal activity
Upholding the Public Interest: By preventing money laundering and terrorist financing, solicitors contribute to a safer, more transparent financial system.

AML compliance is not just a regulatory checkbox; it’s a critical safeguard for clients, solicitors, and society and by understanding and implementing AML obligations, we uphold our ethical responsibilities and contribute to a safer financial ecosystem.

However, we are committed to balancing compliance with efficient client service, ensuring that legal matters proceed smoothly once verification is complete.

Customer Due Diligence (CDD): What It Means and Why It Matters.

A key part of AML compliance is what’s known as Customer Due Diligence (CDD). Think of it as your solicitor’s way of confirming they know exactly who they’re dealing with—and that you are who you say you are.

There are several parts to CDD, which we shall address in turn.

Verifying Your Identity

We need to confirm your identity using reliable, independent sources. This includes verifying both who you are and where you live. If you’re acting on behalf of someone else (such as a company or trust), we will also need to identify the entity’s ultimate beneficial owner.

We need to verify your identity before we can proceed with your matter.

Acceptable evidence of your identity typically includes:

A valid form of photo ID, such as:
- Passport
- Photo driving licence
- Birth certificate (with a marriage certificate if you’ve changed your name).
Proof of address, such as:
- Bank statement (dated within the last 3 months).
- Utility bill (dated within the last 3 months).
- Letter from a government department (dated within the last 6 months).
Your National Insurance number.

Once we receive your documents, we check them through a secure, regulated system. When we get the green light, we can move forward with your legal matters.

We understand this might feel invasive or bureaucratic—but it’s not optional. It’s the law.

Understanding the Purpose of the Transaction

It’s not just about who you are—it’s also about what you’re doing.

Solicitors are required to understand:

The nature of the business relationship
The purpose of the transaction
Where the money involved is coming from (known as the source of funds).

This helps us assess whether the transaction presents a high risk of money laundering or terrorist financing.

For example, if you’re buying a property and the deposit is coming from an unexpected third party—or from overseas—we will need to dig deeper to ensure everything is legitimate.

Ongoing Monitoring: It’s Not a One-Off Check

Customer Due Diligence doesn’t end once your ID is verified. We also monitor ongoing matters for any red flags or changes in risk.

For example:

Is a new party suddenly introduced to a transaction?
Are there inconsistencies in the documentation?
Has the source of funds changed?

This continuous vigilance ensures we stay compliant—and keep your matters safe.

“How do you improve something that is perfect?“

Reporting Suspicious Activity (SARs)

There may be rare occasions when we spot something suspicious that we’re legally required to report.

Under the Proceeds of Crime Act 2002 (POCA) and the Terrorism Act 2000 (TACT), solicitors must report suspicions of criminal property or terrorist financing to a designated person within the firm: the Money Laundering Reporting Officer (MLRO).

If appropriate, the MLRO will submit a Suspicious Activity Report (SAR) to the National Crime Agency (NCA).

Important note: While legal professional privilege protects most client information, AML law can override that privilege when specific legal thresholds are met.

AML Policies, Procedures, and Record-Keeping

Every law firm must have documented AML policies and procedures in place. These cover:

How we perform CDD
How we conduct and record risk assessments
How we report suspicious activity.

We must also keep records of:

Client ID verification
Risk assessments
Any actions taken as a result.

These records must be retained for at least five years after the client relationship ends.

All staff involved in client work must also receive regular AML training. This ensures everyone—from partners to support staff—understands how to spot red flags and what to do when something doesn’t feel right.

AML is not just about ticking boxes—it’s about creating a culture of awareness and integrity across the firm.

Practical Tips for Our Clients

To streamline the AML process, please prepare the following documents in advance, and bring them with you when you first meet us:

Proof of identity: A valid passport, driving licence, or birth certificate (with a marriage certificate if applicable)
Proof of address: A recent bank statement, utility bill, or government letter (dated within the last 3 or 6 months as appropriate)
National Insurance number: This helps connect and verify your identity.

By providing accurate and complete information upfront, you can help us complete our CDD quickly and move forward with your legal matters.

In Summary: We Know it can feel Frustrating and Intrusive—but It’s for Your Protection

Anti-Money Laundering compliance is a cornerstone of ethical legal practice. By conducting thorough Customer Due Diligence, performing risk assessments, maintaining robust policies, reporting suspicious activity, and training staff, we play a vital role in combating financial crime.

In today’s world, where identity fraud and cybercrime are on the rise, verifying who we’re working with is one of the best ways to prevent harm—to our firm and you.

These checks are not meant to delay or inconvenience you. They are:

A legal obligation
A vital safeguard
A way to protect your identity and financial wellbeing.

At Hutchinson & Buchanan, we take our AML obligations seriously, ensuring that every transaction is handled with integrity and transparency. So when we ask for your identification and proof of address, know that we’re doing our job to keep the legal and financial systems clean, safe, and trustworthy for everyone.

If you have questions about our AML processes or need assistance with a legal matter, contact us today. Together, we can navigate the complexities of compliance while keeping your interests front of mind.

“I have no hesitation in recommending H&B to others. Every aspect of the service they have provided has been first class, not simply in the execution of a recent transaction, but also in the informal consultation and advice that has been offered on a broader range of legal issues.“

Address

77 North Street
Ripon
North Yorkshire HG4 1DP

Email

mail@hb-law.co.uk

Phone

01765 602156

Fax

01765 690018