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City firms move to safeguard client accounts

City firms move to safeguard client accounts The Law Society has now issued a Practice Note dealing with this point which says 'You should not attempt to limit your undertakings because acceptance by a buyer's solicitors of such a limited undertaking risks not discharging the seller's charge if the bank fails. This is not in the interests of clients. Any undertaking you cannot honour is a claim against you and your insurers.' I do not understand why it is said that the solicitor should assume personal liability because it is in the best interests of the client - why should solicitors be guarantors of their clients' finances? Even the guidance to the Code of Conduct does not propose that extreme position - guidance note 26 to rule 10 says 'You are not obliged to give or accept undertakings.' Undertakings are an administrative convenience, not a professional obligation.

9-Oct-2008

9:35 pm