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Client balances: reminder issued

19 September 16

A reminder that failure to disburse all historic client balances highlighted though inspections or the accounts certificate process is always now reported to the Client Protection Subcommittee

The Law Society of Scotland has issued a reminder to members that failures by practice units to have disbursed all historic client balances held following conclusion of transactions (Practice Rules 2011, rule B6.11) that are highlighted during inspections and/or through the accounts certificate process and not addressed urgently are always now reported to the Client Protection Subcommittee (CPSC).

If any remaining balances are not timeously cleared following discussion by the CPSC, the Society will refer a complaint to the Scottish Legal Complaints Commission (SLCC) against the practice unit’s cashroom manager and any regulated person(s) responsible for the breach of rule B6.11. A number of such complaints have already been referred.

As previously advised, any breach of rule B6.11 may also place regulated persons/practice units in breach of rule B6.4 (any breach of rule 6 to be remedied promptly on discovery), rule B6.13 (cashroom manager responsible for securing compliance with rule 6), and rule B6.2.3(b) (no regulated persons to cause or knowingly permit the practice unit not to comply with any provision of rule 6).

The CPSC may therefore decide that other solicitors within the firm are also responsible, and take action against them.

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

It is expected that practice units will review all client credit balances on a monthly basis to ensure compliance. 

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