Placement of Client/Business funds

Question 1

What are two options a solicitor has if they receive a cheque that comprises of a mix of client money and business money?

Answer 1

1. They can deposit the cheque into S’s business account if they promptly transfer the client money to the client account; or
2. The may deposit the cheque into the client account and promptly transfer the business funds out

Question 2

What can a solicitor do if they issue a bill for professional fees/disbursements and there’s sufficient money in the client’s account to cover the bill?

Answer 2

S may immediately transfer the money owed from the client account to the business account (as long as it’s not being held for another purpose)

Question 3

What is an inter-client transfer?

Answer 3

Where S transfers funds between client accounts
- Debits the C account from which the funds are being transferred
- Credits the C account into which the funds are being transferred