Unclaimed balances

Preserve your clients’ interests and put your old balances to work. It is a fact of legal life that law firms of every shape and size carry old residual balances on their clients’ ledger.

These might be just a few pennies or quite a lot of pounds but, irrespective of the amount, they can still be a real headache because they have to be accounted for each year.

To do otherwise is to risk compliance problems under the SRA Accounts Rules. This is where The Solicitors Charity can help.

We know exactly how much of a burden unclaimed balances can be. We also know that law firms need to have complete confidence that the sums they pass on to charities will always be refunded, as and when they are reclaimed.

This is why we have sufficient safeguards in place to ensure that we can always re-pay old client balances. Moreover, we offer an indemnity in every case, irrespective of amount. These funds, which would otherwise be dormant, can then be put to charitable use in the form of interest-free loans (usually secured) to solicitors and their families in need.

You do not need SRA approval to transfer amounts which do not exceed £500 in relation to any one client or trust matter, provided you have complied with Rule 20.2 of the Solicitors’ Accounts Rules:

• You have made reasonable attempts to establish the identity of the money’s owner
• You have made adequate attempts to ascertain the proper destination for the money and return it to the rightful owner, unless the reasonable costs of so doing are likely to be excessive in relation to the amount held
• You record the steps you have taken above and keep all relevant documentation (such as attempted correspondence and the indemnity we will issue to you on receipt of funds) and
• You keep a central register in accordance with rule 29.22.

For balances over £500 SRA authorisation is required under Rule 20(1)(k) but the process is straightforward.

Contact the Team at:

Professional Ethics

The Cube

199 Wharfside Street

Birmingham B1 1RN DX 720293 Birmingham 47

Tel: 0370 606 2577

Email: professional.ethics@sra.org.uk

Guidance and the relevant application form may be found here.

Please send a cheque made payable to The Solicitors’ Charity to us at:

The Solicitors’ Charity

1 Jaggard Way

London

SW12 8SG

You need to provide a note or letter with any payment which indicates that you have complied with SRA requirements. You are welcome to let us have accompanying SRA paperwork if you wish but this is not essential.

On receipt of your cheque, we will send you a letter of indemnity which states that we will refund all or any part of the received sum when requested, in order that you might comply with your professional obligations to the entitled party.

In addition, if so requested, we undertake to pay interest (usually 2% above base rate) when there is a refund. If you would like to have sight of the indemnity we offer, please email sec@thesolicitorscharity.org; we would be delighted to share this so that you can check it meets your needs.

Information on the SRA website about withdrawal of residual client balances form can be found here, or you can download the form here.

Learn more about the prescribed circumstances in which you can withdraw client money from client account to pay to a charity of your choice here.