A spike in firms misusing the client account has prompted a warning notice from the Solicitors Regulation Authority.

The regulator says it has received dozens of reports of firms using their client account for criminal or other improper purposes.

The High Court and Solicitors Disciplinary Tribunal have made it clear that law firms must not mis-use client account by effectively providing a banking facility for clients.

The SRA issued its warning notice last month and hopes to make it clear to law firms what the rules will not allow.

‘The role of law firms is to provide legal services, not to provide banking facilities,’ said David Middleton, executive director for legal and enforcement. ‘Rule 14.5 of the SRA Accounts Rules 2011 makes this clear and it is also clear in the decided cases.’

Solicitors who breach the rule may, he explained, be helping organised crime to launder the proceeds of crime.

The SRA wants the warning notice to act as a reminder of why solicitors should decline clients requests to use their client account as a banking facility, and reiterates that it will take action if the rule is breached.

In the past two years, two High Court judgments have upheld the principles underlying rule 14.5.

One involved investors unwilling to pay directly to a car import business, so using a client account operated by the company’s solicitor. The lawyer was found to have allowed his bank account to be used by a client and third party to receive and pay monies and was fined £7,500 at the SDT.

In a second case, a law firm acting for a football club that went insolvent was found to have allowed around £10m of the club’s money to pass through its client account. The SDT fined the firm £50,000 and its two managers £5,000 and £20,000.

The client account warning notice was one of several made last year by the SRA: others issues have included anti-money laundering, publicity for in-house firms and high-yield investment fraud.