Engagement letter AI clause: wording for England and Wales
· Updated
Joaquín Trapero in AI and privacy specialist, and founder of Nonimo.
An engagement letter AI clause is where a firm tells a client, once and in writing, what its software does with their file. In England and Wales two professions face the question under different rulebooks: solicitors under the SRA, accountants and tax advisers under PCRT. Our page for solicitors covers the day-to-day side.
Below you’ll find short clauses to copy, each tied to the rule behind it, and a selector for the parts that differ by profession. The wording is ours and deliberately plain. It isn’t legal advice: treat it as a draft for whoever signs off compliance at your firm.
No rule makes an AI clause compulsory, but several push you towards one. The Law Society suggests explaining your AI use in the client care letter, PCRT recommends a line in the letter of engagement, and the UK GDPR makes a provider handling client data your processor.
Are solicitors allowed to use AI? What the SRA and Law Society expect
Yes. Nothing in the SRA Code bans it. The SRA’s warning notice of 17 August 2026 puts the weight on you instead: using AI, it says, neither reduces nor transfers your professional responsibilities. Its two worries are invented citations and client confidentiality, and our guide to AI in court documents takes the first one.
On telling clients, the notice is silent. The Law Society’s practice note of 21 October 2026, Using artificial intelligence in legal practice, is clearer: be open in the client care letter about the extent of AI use and the effect of the client’s own, and you may encourage clients to disclose theirs.
Two SRA texts frame the clause too. Code paragraph 8.6 wants clients able to make informed decisions about how their matter is handled; the compliance tips want them told when they deal with AI directly. Of the four sources, the practice note changes the letter most.
What each solicitors' source asks of the letter
Read the last column: that's the job your clause has to do.
| Source | Date | Weight | For the clause |
|---|---|---|---|
| SRA Code, paragraphs 6.3 and 8.6 | in force | binding | confidentiality unless the client consents; informed decisions on handling |
| SRA compliance tips on AI | 9 February 2026 | guidance | say so when a client deals with AI directly |
| SRA warning notice on AI | 17 August 2026 | regulator's notice | safeguards before client data goes in; responsibility stays with you |
| Law Society AI practice note | 21 October 2026 | practice note | extent of AI use in the client care letter; the client's own AI use |
SRA Code of Conduct for Solicitors and SRA guidance pages; Law Society practice note, 21 October 2026.
PCRT and ICAEW’s terms of business: AI disclosure for tax work
Tax advisers have the most explicit text. The PCRT bodies’ topical guidance on AI, published 19 January 2026, applies to any member advising on UK tax, and breaching PCRT exposes a member to disciplinary action. Paragraph 1.3 says a statement in the engagement letter that AI-enabled software may be used can support transparency.
ICAEW then rebuilt its templates. Its note of 13 March 2026 adds schedules for identity verification, filing company accounts, Making Tax Digital and agreed-upon procedures, and says the terms of business now refer to AI. Our page for accountants turns that into practice terms.
ACCA’s In Practice piece of September 2026 would apply the AI guidance beyond tax work. It asks whether your terms permit AI at all, cover AI notetakers, and say what follows an objection. Answer the notetaker question first: a recorded meeting holds more personal detail than most drafts.
The three moments PCRT has in mind
The engagement letter covers the first. Your file procedure has to cover the other two.
In the letter of engagement
- A statement that AI-enabled software may be used
- Paragraph 1.3
Before the work starts
- Where AI is fundamental to the deliverable, tell the client directly
- Integrity section of the guidance
When the work is delivered
- Consider disclosing the AI tools actually used
- Paragraph 1.3, linked to PCRT 2.4 on misleading by omission
PCRT bodies, topical guidance on the ethical use of AI tools, 19 January 2026.
AI clause wording for any professional firm
These five clauses fit a solicitor’s terms of business and an accountant’s letter of engagement alike. Number them to suit your document and fill the square brackets. Each one names the source behind it, so you can drop any you can’t keep.
Five clauses for both professions
Copy, adapt, renumber. The grey line under each says why it's there.
We use software that includes AI for [drafting, summarising documents and research] on your matter. It supports our people. It does not give you advice, and no decision about your matter is taken by it alone.
Why: Law Society practice note (extent of AI use); PCRT 1.3; UK GDPR Article 22A on decisions with no meaningful human involvement.
A [solicitor / qualified member of staff] reviews anything AI has helped to prepare before we rely on it or send it to you. We answer for that work exactly as we do for any other.
Why: SRA warning notice on responsibility; PCRT 3.4 (treat output like a junior colleague's).
When an AI provider handles personal data from your file, it acts as our processor under a written contract. That contract limits it to our instructions, binds its staff to confidentiality and [does not let it train its models on your data]. [Data is processed in [the UK / country], relying on [safeguard].]
Why: UK GDPR Article 28(3)(a) and (b); SRA warning notice on training and a secure environment.
You can ask us not to use AI on your matter, or on a particular document. Some systems we rely on for checks and administration have AI built in that we can't switch off, so we will confirm in writing what we can exclude and whether it changes our fees or timescale.
Why: ACCA In Practice on client objections; SRA Code 8.7 on cost information.
Please tell us if any document or figures you give us were produced with an AI tool, and which parts. We rely on what you provide, and AI output can be wrong. If you put our advice into an AI tool yourself, you may weaken its confidentiality and privilege.
Why: Law Society practice note on clients' own AI use; ACCA In Practice on reliance on client information.
My wording, not a regulator's model clause. ICAEW's sample wordings sit in its helpsheet on engagement letters and privacy notices.
Clause 3 is only true if your plan says so. Training and retention terms differ between the consumer and business versions of Claude, so read the plan you actually pay for before deleting the brackets.
The same goes for ChatGPT, where what the provider keeps depends on the account type and on settings someone at the firm may have changed.
Clause 4 is modest on purpose. ACCA warns that a blanket ban may be impossible where AI already runs behind the scenes, in AML checks or research, and that an objection can mean the firm can’t act. Check whether Copilot in Microsoft 365 is on, then promise only what you can exclude.
Solicitor or tax adviser: the AI clauses that differ
The rest depends on who regulates you. Solicitors need a consent route that fits paragraph 6.3 of the Code. Tax advisers need the proper and specific authority PCRT asks for in paragraph 4.1, plus the delivery note from 1.3. Pick yours.
Clauses by firm type
Choose your profession. Add these after the five shared clauses.
By signing this letter you agree that we may put information from your matter into [tool], on the terms in clause 3. Without that agreement, we use AI only on text from which details identifying you and others have first been removed on our own systems.
Why: SRA Code 6.3 (disclosure where the client consents); SRA warning notice on safeguards.
We never put privileged documents or our advice to you into publicly available AI tools.
Why: SRA warning notice, citing UK v SSHD [2026] UKUT 81 (IAC), on privilege that may be lost for good.
The assistant on our [website / enquiry form] is automated software, not a member of our team. It gives general information only; advice on your matter comes from [role].
Why: SRA compliance tips on clients interfacing with AI.
You authorise us to share information about your affairs with [tool], supplied by [provider], solely to deliver the services in this letter. You may withdraw that authority in writing whenever you wish.
Why: PCRT topical guidance 4.1 (proper and specific authority) and 4.2 (consent for public tools).
If AI played a material part in preparing [a return, computation or written advice], we will say so when we send it. Where AI is central to a piece of work, we will tell you before we begin.
Why: PCRT topical guidance 1.3 and its integrity considerations.
Where we process your employees' personal data on your instructions, you give us general written authorisation to use further processors, AI providers included, on terms at least as protective as ours. We will notify you [21] days before adding or replacing one, so you can object.
Why: UK GDPR Article 28(2) and 28(4). The notice period is a placeholder; the law sets none.
Without JavaScript both sets show. Drafting suggestions only, to be adapted by your COLP, compliance principal or data protection lead.
If staff upload whole Word files rather than pasting text, the “details removed first” route in 6S has to reach what a Word file keeps behind its body text as well, or the promise breaks on the first attachment.
For software the firm builds itself, removing details in a proxy rather than hosting a private model is one way to keep that route honest. Leave 8S out unless you really run a chatbot: terms that describe tools you don’t have age badly.
UK GDPR processor terms and a DPIA before the first client file
The UK has no general AI statute, and the Law Society notes there is no AI-specific regulator for legal practice, so data protection law does most of the work. EU rules matter less than people fear: the EU AI Act reaches UK firms mainly where AI output is used inside the Union.
Once a provider’s system holds personal data from a client file, it processes for you, and Article 28 dictates the contract. You may only use processors with sufficient guarantees, bound to your documented instructions, including on transfers abroad. Our comparison of AI tools under UK GDPR shows which business plans offer such terms.
Accountants running payroll sit one link further down. There you’re the client’s processor, so the AI provider is another processor and needs the client’s prior written authorisation, which is clause 8T. Payslips can carry union deductions, which count as special category data.
Article 28 terms to find in your AI vendor's contract
If one is missing, clause 3 in your letter isn't true yet.
| UK GDPR | What it requires | Look for in the vendor's terms |
|---|---|---|
| 28(1) | processors with sufficient guarantees | security commitments you can show a client |
| 28(3)(a) | documented instructions, including on transfers | use limited to your service; where data goes |
| 28(3)(b) | staff bound to confidentiality | a confidentiality term covering its personnel |
| 28(2) and 28(4) | no further processors without authorisation; same obligations passed down | a sub-processor list and notice of changes |
| 28(3)(h) | information to show compliance, and audits | an audit or report right |
UK GDPR Article 28, as published on legislation.gov.uk. "No training on our data" isn't an Article 28 term: it comes from the SRA's warning notice, so check it separately.
Your privacy notice changes too. Article 13(1)(e) requires you to give the recipients, or categories of recipients, of personal data, and an AI provider is one. Where your own software sends text through an AI gateway, every provider it can reach belongs on that list.
One line for the privacy notice
We also share personal data with suppliers of AI software, who process it for us under contract and only on our instructions. [Current suppliers are listed at [web address].]
Our wording for UK GDPR Article 13(1)(e). A category this specific tells a client more than "IT suppliers".
Then the DPIA. The Information Commission, which replaced the ICO on 30 September 2026 and still uses the ICO name online, treats AI as innovative technology needing a DPIA alongside another risk factor, and says do one if in doubt. A vendor that won’t flag new sub-processors shouldn’t see client files.
Does using AI put legal professional privilege at risk?
The SRA’s notice is blunt. It cites the Upper Tribunal in UK v Secretary of State for the Home Department [2026] UKUT 81 (IAC), which said client letters put into an open tool such as ChatGPT are placed in the public domain, and warns that privilege may be permanently waived.
Paying for a tool doesn’t settle it: free and paid systems can both endanger confidentiality, and the Law Society warns against assuming an enterprise label alone protects you. PCRT takes the same line for tax, calling client data in publicly available tools a likely breach unless the client consented.
Inputs to public tools, it adds, should be anonymised so the client can’t be picked out, even from an uncommon service they’re known for. Our pseudonymisation guide explains why removing the name rarely ends the job.
Three ways client text reaches an AI tool
Each row needs different wording in the letter.
| Route | Confidentiality | Privilege | Clause |
|---|---|---|---|
| Public chatbot, personal account | likely breach without consent (SRA notice; PCRT 4.2) | may be waived for good | none can fix it; don't do it |
| Business plan under contract | depends on contract, training and retention terms | the notice gives no safe harbour | 6S or 6T, plus clause 3 |
| Identifiers replaced on the firm's computers first | client not identifiable, if context is checked (PCRT 4.4) | lower risk, as the provider can't link the content to the client; untested in court | clauses 1 to 5 and the fallback in 6S |
SRA warning notice, 17 August 2026; PCRT topical guidance on AI, 19 January 2026; ICO guidance on indirect identification. Our reading, not a court ruling on business tools.
My preference is the last row: a privileged note the provider can’t attach to a name is a smaller problem than one it can, though no court has tested it. If a file has already gone into a public chatbot, the letter no longer helps, and our guide to that situation picks up from there.
Check what your cyber policy says about that kind of incident too. Our comparison of UK cyber insurance wordings shows where exclusions and notification conditions sit.
Not every tool that strips details keeps a key to put them back. Some gateways redact irreversibly, so names never return in the answer, which suits analytics but not a letter to a client.
Checklist: what your engagement letter AI clause must cover
ICAEW’s March 2026 note says new digital tools should prompt an update to the terms agreed with the client, with updated letters signed and returned and a record kept of what went out. It adds that an unsigned letter gives limited protection in a dispute.
Your staff rules live elsewhere. Which tools people may open belongs in an AI acceptable use policy, and its start date should match the letter’s. A clause the client never signed back is one you’ll struggle to lean on, so chase the returns.
Does your clause cover it?
Tick what your draft already says.
0 of 9 covered
Gaps remain. Fill them before the letter goes to clients with open matters.
Nearly there. Check the boxes left empty against the sources above.
Covered. Send it for signature and keep a record of the version issued.
Drawn from the SRA notice and Code, the Law Society practice note, PCRT, ICAEW, ACCA and UK GDPR Articles 13 and 28. Rolling it out across several teams? Our organisations page covers that.
The retention line in your privacy notice should match what staff really do with old chats. Archiving a ChatGPT conversation keeps it; only deleting the history properly starts the provider’s own deletion clock.
When the agreed version goes out, remove the tracked changes and comments first, so the firm’s internal notes on the wording stay inside the firm.
![A made-up matter reference swapped for [REF_1]: the SRA warns privilege may be waived for good once client letters go into an open AI tool](/guias/en-gb/client-matter-reference-privilege-waived-label.webp "A matter reference and privilege")
Keeping your engagement letter AI clause true on every file
A clause is only as good as the habit behind it on a busy afternoon. Nonimo for UK firms handles that step: it swaps the client’s names, dates of birth and reference numbers for labels on the fee earner’s computer before text reaches an AI tool, then restores them in the reply.
What would a paragraph from your file give away?
Paste a few lines of a letter, note or computation.
Runs in your browser; nothing is sent anywhere. It spots National Insurance, NHS and driver numbers, postcodes, sort codes, passport numbers, UK phones and emails by format. It does not detect names or addresses.
Tax files lean heavily on one identifier in particular; this is how National Insurance numbers come out of a prompt without slowing the work.
The matter’s text never reaches us. Our security page sets out what stays on the machine.
The same query, before and after
Capital gains query for Delphine Moorcroft, born 3 May 1971, NI QQ 12 34 56 C: sale of her half share in a holiday let.
Capital gains query for [PERSON_1], born [DATE_1], NI [NI_NUMBER_1]: sale of her half share in a holiday let.
Made-up client. QQ 12 34 56 C is HMRC's own example format; label names are illustrative.
Firms building their own tools can do the same between the app and the OpenAI API with the Gateway, so the clause holds there too.
Plans for a practice of any size are on the pricing page.
Sources
- SRA, Misuse of AI: warning notice, 17 August 2026: safeguards, training, retention, privilege, UK v SSHD [2026] UKUT 81 (IAC), responsibility unchanged.
- SRA, Compliance tips for solicitors regarding the use of AI and technology, updated 9 February 2026: clients should know when they are interfacing with AI.
- Law Society, Using artificial intelligence in legal practice, practice note, 21 October 2026: client care letter transparency; clients’ own AI use; privilege; Article 28; no AI-specific regulator.
- PCRT bodies, topical guidance on the ethical use of AI tools, 19 January 2026: paragraphs 1.3, 3.4, 4.1, 4.2 and 4.4.
- ICAEW, Engagement Letter updates: key changes and guidance for firms, 13 March 2026: new schedules, AI in the terms of business, re-signing.
- ACCA, Engagement letters, AI and PCRT, In Practice, September 2026: objections, notetakers, client AI material.
- UK GDPR, Article 28: processor terms and further processors.
- UK GDPR, Article 22A: decisions with no meaningful human involvement.
- ICO, When do we need to do a DPIA?: innovative technology including AI; if in doubt, do one.
- ICO, Can we identify an individual indirectly?: identification from combined information.
- DCMS, Information Commission succeeds the ICO as UK’s data protection regulator, 30 September 2026.
Accessed 8 November 2026.
Common questions
Are solicitors allowed to use AI?
Yes, nothing in the SRA Code forbids it. The SRA's August 2026 warning notice expects safeguards before client information goes in, and says AI does not reduce or shift a solicitor's professional responsibilities.
Does using AI waive legal professional privilege?
It can, if privileged material goes into an open tool. The SRA warns that privilege may then be lost for good. Paid tools aren't automatically safe either: the notice asks for contractual and technical safeguards.
Is there a UK law regarding the use of AI?
No, the UK has no general AI statute. Data protection law does most of the work, including Articles 22A onwards of the UK GDPR on significant decisions taken by automated means.
How are firms updating engagement letters and terms for AI?
By adding an AI clause to the terms of business. ICAEW's March 2026 templates refer to AI, and it says new digital tools should prompt updated terms, signed and returned by the client.
Do we need a DPIA before using AI on client files?
Often, yes. The ICO lists AI as innovative technology needing a DPIA when another risk factor is present, and recommends one whenever you are in doubt.
Can a client refuse AI on their matter?
Yes, and the letter should say how. ACCA notes that AI already used behind the scenes may make a blanket ban impossible, so agree what you can exclude and any effect on fees.