NatWest and RBS account holders
Issued 22 June 2012 (updated 26 June 2012)
Read update of 26 June 2012
A number of firms will be affected by the computer system problems being experienced by NatWest and RBS banks. The problem for firms is the inability to see client account balances and transactions that have taken place over the past three days. Firms will be concerned about becoming overdrawn on their accounts should any payments be made out.
For those firms completing on conveyancing transactions, there will be particular concern that the funds are not available.
The SRA has discussed this issue with NatWest and RBS. The banks are trying to resolve these problems and recognise the difficulties being caused to solicitors and their clients. They have confirmed that where firms have used best endeavours to ensure the payment has been made into their account, for example by contacting lenders (or the buyers' solicitors) direct for confirmation of payment, they are prepared to give appropriate undertakings to indemnify solicitors. Standard undertakings have been produced and promulgated to the relevant account and relationship managers dealing with solicitors' accounts. Firms should contact their bank relationship managers directly to discuss the terms of those undertakings.
When contacting lenders or buyers solicitors with regard to payments, firms should keep a full note of the date and time of the conversation, with whom they spoke and the amount transferred; it is also advisable to confirm those details immediately by email.
We would like to assure those solicitors who have given undertakings with regard to completion that we cannot foresee a situation where disciplinary action would be taken due to problems that arise as a result of these difficulties. Equally, should there be a breach of the SRA Accounts Rules as a consequence of the present system failures, and solicitors acting in their clients' best interests to nevertheless complete transactions, disciplinary action will not be taken. Should you require any further guidance, please contact the Professional Ethics helpline.
Update for NatWest and RBS account holders
26 June 2012
We are informed that banking systems are now rectified and work is continuing on bringing account entries up to date. Some CHAPS, inward and outward payments may have been recorded twice. The banks are working to rectify this and remove ghost entries. Some payments to client account may show in a reverse chronological order so that payment out will appear to have taken place before payment in. The relevant time period for these entries is between 20 June and 29 June 2012. The banks apologise for any inconvenience caused and thank the legal sector for their support during this difficult period.
The SRA is aware that this may cause some firms to fall foul of the SRA Accounts Rules 2011. Should a firm be experiencing these problems, then details of such entries, time, date, amount should be kept so that your reporting accountant can cover these inaccuracies in his report with the reasons for any double entries.
We would like to reassure those solicitors who have been put in breach of the SRA Accounts Rules, as a consequence of the present system problems, that on the basis they have satisfied themselves that client money is properly accounted for, we cannot foresee a situation where disciplinary action would be taken due to problems that arise as a result of these difficulties. Should you require any further guidance, please contact the Professional Ethics helpline.