The SRA Handbook is no longer in effect. It was replaced by the SRA Standards and Regulations on 25 November 2019.

SRA Handbook

Method of and authority for withdrawals from client account

Back to version 21

Version 18 of the Handbook was published on 01/11/2016. For more information, please click 'History' Above

Rule 21: Method of and authority for withdrawals from client account


A withdrawal from a client account may be made only after a specific authority in respect of that withdrawal has been signed by an appropriate person or persons in accordance with the firm's procedures for signing on client account. An authority for withdrawals from client account may be signed electronically, subject to appropriate safeguards and controls.


Firms must put in place appropriate systems and procedures governing withdrawals from client account, including who should be permitted by the firm to sign on client account. A non-manager owner or a non-employee owner of a licensed body is not an appropriate person to be a signatory on client account and must not be permitted by the firm to act in this way.


There is no need to comply with rule 21.1 above when transferring money from one general client account to another general client account at the same bank or building society.


A withdrawal from a client account in your favour must be either by way of a cheque, or by way of a transfer to the office account or to your personal account. The withdrawal must not be made in cash.

Guidance notes


A firm should select suitable people to authorise withdrawals from the client account. Firms will wish to consider whether any employee should be able to sign on client account, and whether signing rights should be given to all managers of the practice or limited to those managers directly involved in providing legal services. Someone who has no day-to-day involvement in the business of the practice is unlikely to be regarded as a suitable signatory because of the lack of proximity to client matters. An appropriate understanding of the requirements of the rules is essential - see paragraph 4.2 of the Guidelines for accounting procedures and systems at Appendix 3.


Instructions to the bank or building society to withdraw money from a client account (rule 21.1) may be given over the telephone, provided a specific authority has been signed in accordance with this rule before the instructions are given. It is of paramount importance that there are appropriate in-built safeguards, such as passwords, to give the greatest protection possible for client money. Suitable safeguards will also be needed for practices which operate a CHAPS terminal or other form of electronic instruction for payment.


In the case of a withdrawal by cheque, the specific authority (rule 21.1) is usually a signature on the cheque itself. Signing a blank cheque is not a specific authority.


A withdrawal from a client account by way of a private loan from one client to another can only be made if the provisions of rule 27.2 are complied with.


If, in your capacity as trustee, you instruct an outside administrator to run, or continue to run, on a day-to-day basis, the business or property portfolio of an estate or trust, you will not need to comply with rule 21.1, provided all cheques are retained in accordance with rule 29.18. (See also rule 29, guidance note (ii)(d).)


You may set up a "direct debit" system of payment for Land Registry application fees on either the office account or a client account. If a direct debit payment is to be taken from a client account for the payment of Land Registry application fees, a signature, which complies with the firm's systems and procedures set up under rule 21, on the application for registration will constitute the specific authority required by rule 21.1. As with any other payment method, care must be taken to ensure that sufficient uncommitted funds are held in the client account for the particular client before signing the authority. You should also bear in mind that should the Land Registry take an incorrect amount in error from a firm's client account (for example, a duplicate payment), the firm will be in breach of the rules if other clients' money has been used as a result.


If you fail to specify the correct Land Registry fee on the application for registration (either by specifying a lesser amount than that actually due, or failing to specify any fee at all), you will be in breach of rule 21.1 if the Land Registry takes a sum from your client account greater than that specified on the application, without a specific authority for the revised sum being in place as required by rule 21. In order that you can comply with the rules, the Land Registry will need to contact you before taking the revised amount, so that the necessary authority may be signed prior to the revised amount being taken.


Where the Land Registry contacts you by telephone, and you wish to authorise an immediate payment by direct debit over the telephone, you will first need to check that there is sufficient money held in client account for the client and, if there is, that it is not committed to some other purpose.


The specific authority required by rule 21.1 can be signed after the telephone call has ended but must be signed before the additional payment (or correct full payment) is taken by the Land Registry. It is advisable to sign the authority promptly and, in any event, on the same day as the telephone instruction is given to the Land Registry to take the additional (or correct full) amount. If you decide to fund any extra amount from the office account, the transfer of office money to the client account would need to be made, preferably on the same day but, in any event, before the direct debit is taken. Your internal procedures would need to make it clear how to deal with such situations; for example, who should be consulted before a direct debit for an amount other than that specified on the application can be authorised, and the mechanism for ensuring the new authority is signed by a person permitted by the firm to sign on client account.


You may decide to set up a direct debit system of payment on the office account because, for example, you do not wish to allow the Land Registry to have access to the firm's client account. Provided you are in funds, a transfer from the client account to the office account may be made under rule 20.1(d) to reimburse you as soon as the direct debit has been taken.


Variable "direct debit" payments to the Land Registry, as described in guidance notes (vi)-(x) above, are not direct debits in the usual sense as each payment is authorised and confirmed individually. A traditional direct debit or standing order should not be set up on a client account because of the need for a specific authority for each withdrawal.