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- New Taskforce on Business Ethics and the Legal Profession report addresses gaps in Anti-Money Laundering (‘AML’) legislation and regulations.
- Report lays out framework for England and Wales based law firms to assess client take-on.
- The Taskforce’s recommendations move to restore public trust in the profession as a defence against kleptocracy.
The Taskforce on Business Ethics and the Legal Profession presents new recommendations which respond to criticisms of professionals as enablers of kleptocracy, state capture and grand corruption. This follows an 18-month review of law firms’ client and matter acceptance procedures. Today, the Taskforce launched a report that calls on law firms to apply an ethical decision-making framework – that goes beyond rule-based behaviour – to client take-on. The guidance has been developed for solicitors in England and Wales.
Research estimates $660 billion to $1.26 trillion of illicit wealth flows into global financial systems annually, often facilitated by professionals working within legal frameworks but at the edge of ethical boundaries. The report identifies that current Anti-Money Laundering (‘AML’) legislation and regulations fail to address this effectively.
The Taskforce argues that as law firms choose commercial clients, their decisions define not only their reputation, but that of the whole sector. As a result, public and political confidence in the legal profession has eroded.
The Taskforce’s recommendations focus on increasing 1) transparency and 2) accountability, through which firms will safeguard their own reputations and the reputation of the profession as a whole. The report recommends profession-led change and notes that additional regulatory powers and rules are unlikely to address the gap in AML legislation.
The report calls for:
- a commitment to responsible leadership to demonstrably reflect the profession’s duty to act in the public interest, emphasising the concept of law as a public profession;
- adoption of a newly established decision-making framework that incorporates a six-step model gating process for client take-on by solicitor’s firms in England and Wales; and,
- use of a ‘Legitimate Provenance of Wealth Test’ which requires credible explanations for clients’ wealth.
It concludes that laws and rules have been found to be insufficient to prevent the flow of illicit capital. There must be public accountability and greater reputational assurances to bolster defences. Adoption of ethical decision-taking measures by law firms will help safeguard their own reputations as well as the reputation of the profession as a whole, thereby demonstrating its commitment to restoring public trust.
Guy Beringer KC (Hon), Chair of the Taskforce on Business Ethics and the Legal Profession, said:
“The Taskforce’s recommendations do not aim to dismantle traditions; they mean to strengthen them. As lawyers, we must adapt to a rapidly changing world while upholding our long-standing responsibilities to society. Trust, accountability and responsible leadership are no longer optional. They must be placed at the heart of the profession if we wish to restore public trust and ensure a continuation of service. This report lays out a roadmap for change.”
The report is launched today at an event hosted by Stewarts in London.
Launched in 2023, the Taskforce brought together some of the brightest minds in the legal profession – including King’s Counsel, University Professors, NGOs and solicitors at leading law firms – to address the erosion of public trust. The Taskforce is hosted by the Institute of Business Ethics (IBE).
Guy Beringer KC (Hon) is available for an interview - please contact [email protected].