What has the Council for Licensed Conveyancers said about AI?

AI and client due diligence

The risk here is criminals using AI against identity checks, not firms using AI. The regulator has raised it in an alert in May 2025, in its annual report in October 2025 and in its sector risk assessment, most recently reviewed on 15th October 2026. It asks firms to check their systems can cope.

It began with an anti-money laundering alert on 27th May 2025. "Criminals intent on laundering money will use whatever means available to them avoid detection, including Artificial Intelligence (AI)." The alert points to an intelligence report from the Legal Sector Affinity Group describing "a growing trend in the use of ever more sophisticated AI to circumvent [client due diligence]". It adds that spotting these cases "is becoming increasingly difficult".

The alert says there are "several indicators to look out for, which should be weighed in the balance with other relevant information when considering [client due diligence]". Money laundering reporting officers can ask the regulator for the detail at [email protected].

The annual anti-money laundering report, published in October, gave the risk its own section on page 32, "Use of AI to circumvent [client due diligence]". The regulator says it "has not seen any recent examples" of AI being used that way. It still treats it as an emerging risk. It quotes the National Risk Assessment 2025, which says current use of AI for money laundering "is not fully understood but is not currently believed to be widespread". The same assessment warns that generative AI "could potentially help criminals to pass banks and other firms' onboarding checks" by creating synthetic identities. The regulator notes that casinos have seen attempts and expects legal practices may face similar ones.

The anti-money laundering sector risk assessment, last reviewed on 15th October 2026, repeats the same emerging risk and advice, and reflects the Money Laundering and Terrorist Financing (Amendment) Regulations 2026.

What does the regulator want firms to do? Make sure any electronic systems you use are sufficiently robust against AI circumvention. Contact your providers to ask how secure their systems are and whether mitigations, such as human checks, are in place. The regulator's anti-money laundering and counter-terrorist financing Code already asks for systems that "incorporate qualitative checks that assess the strength of information supplied", which is where human judgement comes in. More generally, for remote clients, the sector risk assessment says you "should consider using an electronic identity system that provides you with an adequate level of assurance that the client is who they say they are".

The regulator's existing anti-money laundering guidance (January 2025) provides a baseline for assessing electronic verification systems: firms should be satisfied that they provide an appropriate level of assurance. Its AI-related warnings reinforce the importance of checking whether those systems remain effective as threats evolve. The anti-money laundering page adds that digital identity verification, "when used correctly", can be a fast, cost-effective and reliable way to verify identity. It also notes that HM Land Registry will offer a "safe harbour" to conveyancers using a digital identity method that complies with its standard.

The Risk Agenda 2026 is more recent and more direct. "Digital identity verification is now widely used across the sector and is supported by the [Council for Licensed Conveyancers]." But "While digital tools can improve efficiency, they do not remove the need for oversight, judgement and proper documentation." Practitioners "remain responsible" and "cannot offload this to digital providers". Even where a match appears unlikely, practices "should record their reasoning on file". The Risk Agenda also points to guidance from HM Treasury, published in February 2026, on using digital identities for money laundering checks.

Eleven principles for using AI well

The regulator's approach rests on two linked documents. The AI and Technology Principles set the framework. The AI and Technology Guidance adds practical examples and prompts for applying it. Both were last updated on 16th October 2025.

The Principles are positive about technology. They see it, including AI, as a way to make legal services more efficient and accurate, to improve client experience and outcomes and to support access to justice.

Both documents are voluntary. The Principles say "Compliance with the Principles is not mandatory and they are non-prescriptive", and the Code of Conduct and the topic-specific Codes remain mandatory. The Guidance adds that following it "may be regarded as a mitigating factor" if a practice falls short of a mandatory requirement. It also sets the tone with one line: practices and lawyers are "responsible and accountable for the decisions they take and the legal advice they provide, whether assisted by technology or not."

There are 11 principles, each with practical good-practice points in the Guidance. For client due diligence work, three do most of the lifting in our reading: explainability (can you say why a system reached its output?), accountability (who signs off?) and capability (who can use what, and who supervises the work where that's needed?).

One habit runs through all 11: write down what you assessed and why. The Guidance asks practices to keep records of their risk assessments and to record the reasons for each safeguard. If your decisions are ever questioned, that record is what makes them defensible.

A regulator that wants firms to adopt safely

The most recent steer is in the regulator's Risk Agenda 2026, and it is supportive. It says the aim is "not about replacing" lawyers "but about changing how they work", and that "Ignoring technological change is not a neutral position". It is just as clear that "Technology does not dilute professional obligations". It asks firms to make sure outputs are "reviewed by a competent individual" and to train staff to "critically evaluate and if necessary, override AI outputs".

The tone was more cautious in July 2024, at the Council for Licensed Conveyancers Industry Roundtable, where one of the regulator's speakers described it as being in "a cautious place" with AI and said: "The human in the process is still vital". Another described the aim as a permissive framework: "If you are adopting AI, these are the sorts of safeguards that you need to be thinking about." The 2025 Principles and Guidance are that framework in practice. It's a list of safeguards, not a list of rules.

The regulator is also one of six bodies involved in the government's legal services advisory AI Growth Lab. The lab is a sandbox that helps innovators understand how existing rules apply to their AI products, and it names AI-assisted conveyancing and property services among the applications it is interested in. The Solicitors Regulation Authority is another of the bodies, so both regulators are involved. The overview is clear about the limits: participation "does not provide regulatory approval, endorsement or exemptions from legal obligations."

On 18th June 2026 the regulator's website shared the government's home buying roadmap, which includes a commitment to "publish best practice AI conveyancing guidance" and to support industry-led technology, including for anti-money laundering checks.

What these publications do and don't require

None of this is mandatory. The Principles and the Guidance are voluntary and non-prescriptive, and the Code of Conduct and the topic-specific Codes are what firms must follow. The publications don't tell firms which AI tools to choose. They ask how existing duties apply when AI is involved: proportionate risk assessment before adoption, oversight and escalation, clear accountability and training.

More guidance is on the way. The government roadmap shared on the regulator's website points to best practice AI conveyancing guidance still to come. Expect this to keep moving.

Where to start

Write down which AI tools your people can use and for what, including the ones they might reach for on their own. Make sure outputs are reviewed by someone competent, in proportion to the risk, and put escalation arrangements in place. Make clear who remains accountable. If you use electronic identity verification, ask your provider how it copes with AI-generated documents and where a human check sits. Keep a record of what you decided and why, including your reasoning on matches that look unlikely.

The regulator's message is consistent: AI can help, and the lawyer still signs off.