One for the solicitors... Possibly ED?

[G]

I had a letter from my solicitor this week stating that they owed me some money, because of some new rules they were legally obliged to provide this money to me... although you would think they had a legal obligation anyway

Anyway, I contacted them to confirm my address etc and the solicitor stated that it was a very insignificant amount and he would get a cheque out ASAP, then he asked me to cash it ASAP also to confirm I had accepted it.

Now me being suspicious, I cant help thinking this is all to easy for them. I have received the money this morning and it now turns out the money IS NOT an insignificant amount and is actually quite a lot from some property dealings I had FOUR YEARS AGO.

I fear that if I cash this cheque, that I technically accept everything and the issue is over. However, they have had a significant amount of money for 4 years (which I am sure they would have just kept had it not been for these new rules) and this money would have incurred a significant interest etc over the years for which they have no doubt not paid me.

So, does anyone legally minded know what these new rules consist of, and what they are supposed to do.

I just feel like I am perhaps being hoodwinked here?

[Spiderman]

Sounds to me as though you might be too. Personally i wouldn't bank the cheque till you get an answer to this question.

it may be something as simple as they have given you then money they owe you.....but not paid the interest due to you over the 4yrs and y accepting just the sum and not asking for the interest you loose out.

I'm sure Super Ed will be able to clarify this one for you.

[Stu]

how come they had so much of your money that you didn't know about?

This has happened because of a recent change in the Solicitors Accounts Rules. Whistle-stop tour:

The starting point is that client money must be held in a separate client account. The client account must be reconciled to the client ledger at least once every 35 days - in other words, add up all the money you think you've got, and compare it to the bank statement. If there's a difference it needs to be made good. It's a hanging offence to have an overdrawn client ledger, and any short discovered in the reconciliation must be made good immediately on discovery, and equally it's a hanging offence to have client money in office account - ie if the office account goes into + then you need to transfer it immediately.

You can't close a file unless it has nil balance on client and office accounts.

Finally, client account has to be audited every year to confirm compliance with the rules. Few firms get an unqualified report - the rules are so strict that it's next to impossible to comply fully.

What changed was a requirement that solciitors are not allowed to hold onto client money for more than a reasonable period after completion of a matter. Formerly, holding ontpo balances probably would have led to a qualified audit, but now it's a breach of the ruiles. SO, they have to return money. It's actually a PIA to trawl through client account looking for balances, and an even bigger PIA to have to work out why it has happened and whose money it is, but it has to be done. They found that they had your £££ on client account and it's a breach of the rules to sit on it, so back it goes, although good practice should have made them return it sooner.

As re an interest claim, that's a slightly different matter. They only have to account for interest if the total woudl exceed £20. And they only have to account for the interest that they actually received. The accounts rules say that client accounts must be on demand accounts, so usually the interest rate is pitiful.

You will not lose anything by banking the cheque. Unlike with other people, it will not be in full and final settlement of your claim, because solicitors can't behave like that - after all, it's your money, and they have been sitting on it for years. I suggest you write to the solicitors to tell them that you have banked the cheque and please will they send you an interest analysis with a cheque for the interest too. They have to work it out, they will be irritated but that's too bad. As stated, if it's less than £25 they don't have to pay, as the rules say that that's the minimum.

And if you were wondering why the auditors haven't challenged them on interest, it's because interest payments do not form part of a client account audit.

I go through my client account monthly to make sure I don't have od balances knocking around, and return anything. It's really tedious, especially when it's a small amount such as 50p or so. But it's client money, not mine, and I have to account to the penny, and return it.

[phil24_7]

Ed - Really informative post and I await my 50p cheque!

Originally Posted by phil24_7

Ed - Really informative post and I await my 50p cheque!

I'll put it towards the Bahamas fund

[phil24_7]

LOL!

I'll be there soon, Phil. Before 4 December

[phil24_7]

I suggest you don't go to the Bahamas then, Else I'll know exactly where to look! lol

Maybe not such a good idea after all!