Regulation: changes proposed over unclaimed balances

Proposed rules to make it easier for law firms to fund pro bono projects with unclaimed money from client accounts were unveiled at a meeting of the Law Society Regulation Board last week.


The proposals also include permitting solicitors, within set guidelines, to deal with residual client account balances without prior authorisation from the board.


The present guidelines stipulate that solicitors can only withdraw such funds with the authorisation of the regulatory body. The regulator nearly always rules that funds can only be donated to those pro bono projects that are able to give an indemnity against any legitimate claim subsequently made on the money, which is seen as an expensive and time-consuming burden.


The Law Society's representation arm has voiced concerns about the rigidity of the guidelines and has asked the board whether solicitors could be permitted to withdraw unclaimed balances without prior authorisation. It said removing this obligation would speed up the process and make it easier to establish pro bono projects.


Other options for consultation include retaining the current procedure or amending the accounts rules to require solicitors to 'account to clients within a reasonable (or) defined time'.


Desmond Hudson, Law Society chief executive for representation, said: 'We hope that Regulation Board will now move swiftly to ensure that unnecessary barriers to charitable giving are removed, while retaining appropriate client protections.'