Law firms urged to donate unclaimed funds

Solicitors could be sitting on thousands of pounds, according to the Law Society Charity

The Law Society Charity is calling on law firms to donate small unclaimed client funds to charity.

In July 2008, the Solicitors Regulation Authority authorised law firms to give unclaimed funds of less than £50 to charity without the consent of the client. Firms could be sitting on thousands of pounds they can't spend but could donate, according to the charity.

Nigel Dodds, chair of the charity, said: "As many law firms tighten their belts in the current downturn, the philanthropic endeavours of the profession could start to decline.

"Donating unclaimed client funds allows firms that want to continue donating to carry on doing so. The money cannot be used for anything else."

Unclaimed client funds include money left in wills and refunds from conveyancing transactions where the clients cannot be traced.

"The figures have been building up over the years and they could be quite significant in overall terms," said Dodds. "There is no actual measure, but anecdotally small firms are aware that £200 to £300 pounds has built up, and in larger firms it may be thousands."

If a donation amounts to more than £50 of unclaimed funds, the Law Society Charity guarantees the amount if the client makes a claim for the money as long as the law firm has secured approval from the Solicitors Regulation Authority to make the donation.

"They can give to charity and clear the amounts littering their books and, at the same time, know that if there is a problem and the client should re-emerge, they've got the funds to give the money back," said Dodds.

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