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Improper use of client account as a banking facility

SRA Case Study: Lasting powers of attorney

Scenario

A law firm is acting as attorney under a lasting power of attorney (LPA) for a client who cannot manage their own affairs due to their mental and physical incapacity. The firm is unsure whether it can hold the client‘s money in their client account in order to make payments for the client’s personal living expenses or medical care.

SRA's View

Where solicitors are acting as attorney under an LPA (or enduring power of attorney), they act on the instructions of the donor and in the specific circumstances set out in the power of attorney. In this situation, receiving or holding the donor‘s money into client account and making payments out of it, would not give rise to a breach of rule 14.5. You should always act in the best interests of your client (the donor) which may mean operating the client’s own account as signatory or placing money in a designated deposit account.

Solicitors must also comply with any other legal requirements. For example, for Court of Protection appointed deputies, the Office of the Public Guardian (OPG) has issued guidance which advises that law firms should not use client account to hold money and should instead use a designated deposit account or use the Court Funds Office account.

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