Passing on costs

It is common practice to pass on the cost of essential compliance checks, such as those conducted by Thirdfort, to clients. These checks are a necessary part of fulfilling anti-money laundering (AML) obligations and ensuring secure transactions. By clearly outlining these costs in your engagement letter or terms of business, you maintain transparency and manage client expectations from the outset.

What does the guidance say?

The Solicitors Regulation Authority (SRA) and the Council for Licensed Conveyancers (CLC) provide guidance on how firms can pass on the cost of anti-money laundering checks to clients. Essentially, any costs incurred by the firm on behalf of the client can be recharged, as long as it is transparent, reasonable, and agreed upon with the client beforehand. This includes charges for identity verification, source of funds checks, and other compliance measures including the time it takes for you to complete your due diligence. Transparency is key here; clients should clearly understand what they are paying for and why.

What are the recommended recharge prices for Thirdfort checks?

To assist your firm in transparently re-charging clients for necessary checks, we recommend the following pricing when passing on the cost of a check:

• Enhanced NFC ID = £30
• Original ID = £30
• Source of funds = £15
• Identity document verification = £15
• International address verification = £15
• Lite screening: AML screening & address verification = £5
• Lite screening: AML screening only = £5
• Ongoing monitoring = £5
• Know your business: Company summary = £10
• Know your business: UBO report = £40
• Title document = £15

We believe these recommended prices are fair and reflect the value and security these checks provide, while remaining in line with industry expectations and regulatory guidance. However, whilst we’re able to provide guidance, the amount you pass on is up to you.

Additional guidance is given by the Law Society on what qualifies as a disbursement versus a profit cost and how to communicate these charges.

The SRA does not currently have separate guidance on passing the costs of e-verification systems to clients.

Firms need to make sure they bill correctly for e-verification. For example:

• if e-verification costs £20 and the firm passes the cost directly on to the client, this is a disbursement
• if e-verification costs £20 but the firm adds £15 for the time taken to review it and bills the client a lump sum of £35, this is a profit cost