In 2014, the Solicitors Regulation Authority (SRA) increased the limit of unclaimed funds from £50 to £500 which can be paid to charity without SRA permission. These funds could potentially provide a significant contribution towards the work of Promise Dreams
What are dormant funds?
Unclaimed client account balances are sums of money which lie dormant in the client account of many firms of solicitors, often untouched for years. It may be that the rightful owner cannot be traced, or perhaps they will not provide instructions on how the funds should be dealt with. An attempt may have been made to return the monies to the client, but the cheque has remained un-cashed.
Regardless of their age or origin, these balances can all be disposed of cost-effectively and permanently.
Is permission required from the SRA to donate these to charity?
The SRA rule is that law firms must return balances on the client account "promptly" as soon as there is no reason to retain the funds. Where the rightful owner cannot be traced, rules 20.1 and 20.2 of the Solicitors' Accounts Rules permit balances under £500 to be paid to charity without SRA permission, providing certain safeguards are met - this includes taking and recording adequate steps to identify and return the funds to the rightful owner. Amounts over £500 can also be paid to charity, providing SRA permission is granted and the charity is prepared to take out indemnity insurance. Promise Dreams is happy to do this.
Unclaimed client account balances may not be used for any other purpose and have become an administrative burden to Finance Managers who must analyse and explain the existence of these client balances to auditors annually - donating them to Promise Dreams can help make a big
difference to poorly children and their families and take this burden away.