Policy For Holding Client Funds
This policy aims to clarify the position relating to the retention of client funds and the requirements imposed upon Firms under the Solicitors’ Accounts Rules 2011.
Firms are placed under specific obligations for the prompt return of surplus client funds and reporting to clients if funds are to be retained.
We are obliged to return client money to clients promptly. In other words, as soon as there is no longer any proper reason to retain the funds. Payments received after we have accounted to a client, for example, by way of a refund, must also be paid to clients promptly.
Note that sometimes during the course of a retainer, the specific purpose for which funds were paid, no longer exists – for example, to instruct Counsel, or a medical expert.
We must always act in the best interests of our client. We will therefore take instructions when holding client funds as to whether the money should be returned to the client concerned or retained to cover the general funding or other aspects of the claim.
If Funds Are To Be Retained
1. inform the client promptly and in writing to provide details of the amount held at the end of the initial matter for which we were instructed and the reason for the continued retention of the funds
2. inform clients in writing at least once every twelve months thereafter, of the amount of money that we retain and the reason for that retention, for as long as we continue to hold it
Often the accounting to a client for any surplus funds will be an automatic process at the end of the matter.
However, other retainers may be more protracted – even when the principal work has been completed, we may still need to retain client funds for example, to cover outstanding work or to meet a tax liability etc..
In these circumstances, we will inform the client in writing and provide details of the amount held at the end of the matter and the reason for the retention.
Note that we will not be holding onto any client funds unless this is absolutely necessary for the progress of the claim. Any funds held will of course be subject to the Firm’s Money Laundering Policy and the checks that will have to be made in accordance with the same.