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Practice Reminders – treating your client account as a bank account

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By Clare Hughes-Williams

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Published 06 May 2021

50 predictions: Construction & Engineering

To illustrate the Rule, the SRA has produced an updated Warning Notice which provides guidance on use of client account and provides some case studies.

The SRA’s position is that a solicitor should always ask why they are being asked to make a payment on behalf of the client and why the client cannot make or receive the payment directly themselves. The client's convenience is never a legitimate reason to make payments on behalf of a client which potentially breach SAR 3.3. There are many situations where clients would prefer to have their solicitor make a payment unconnected with the transaction on their behalf "for example" where the client does not have access to a bank account in the UK.

Even this is not a good enough reason to overlook clear red flags "for example" the payment of substantial sums to others, including family members, or to corporate entities particularly entities which are in different jurisdictions. This is because whilst less convenient there is no reason why the client could not receive the money into their own account and transfer it from there.

Helping clients is what we do but it is never worth the risk that by doing so in this situation you expose yourself and the firm to scrutiny by the Regulator.

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