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Further warning over historic client balances

18 April 16

The Society is again reminding members of the disciplinary consequences of failing to disburse all historic client balances from concluded transactions

The Society is again reminding members that failure to disburse all historic client balances held following conclusion of transactions will now be reported to the Client Protection Subcommittee. 

Disbursement is required in order to comply with rule B6.11, effective 1 November 2011 with practice units being given two years to clear historic balances.

Solicitors should be aware that any breach of rule B6.11 may also place the regulated persons/practices in breach of the following rules:

  • rule B6.4 – practice unit to remedy any breach of rule 6 promptly on discovery;
  • rule B6.13 – cashroom manager responsible for securing practice unit compliance with rule 6;
  • rule B6.2.3(b) – no regulated persons (solicitors) within the practice unit shall cause or knowingly permit it not to comply with any provision of rule 6. Thus the subcommittee may decide that other solicitors within the firm are responsible, and that action should be taken against them.

It is expected that all client credit balances will be reviewed on a monthly basis to ensure compliance.

Where a breach of the rule is highlighted during inspections and not addressed urgently, the matter will be discussed by the subcommittee and a complaint may be referred to the SLCC.

Practice units must also ensure that every accounts certificate submitted to the Society is correctly completed and discloses all rule breaches including breaches of rule B6.11. Where a breach is noted during inspections, the subcommittee will also be provided with details of accounts certificates submitted which do not disclose a breach, and a breach of rule B6.15 may be added to any complaint.

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