Payments: Firm pledges to return client money
A law firm that continued to allow residual balances to accrue on dozens of files for nearly a decade, even after being warned by the Solicitors Regulation Authority (SRA), has been rebuked.
Further, the senior partners of Cumbrian practice Brockbank Curwen Cain & Hall have to provide undertakings that the firm will take “all reasonable steps” to return the remaining residual balances within the next year, and keep records of the efforts to do so.
A notice published by the SRA last week recorded how the firm submitted a qualified accountant’s report in 2020 that highlighted hundreds of residual balances.
This triggered an SRA inspection that showed £232,065 held on 188 matters, with the largest balance topping £50,000 and the oldest dating back to 2016.
Brockbank Curwen provided assurances that it would hold monthly compliance meetings until the balances were cleared.
An accounts rule spot check questionnaire at the start of 2025 led to another inspection, at which point the firm held residual balances of £48,317.40 on 81 matters, three of which still dated back to 2016. The firm admitted failing to return client money promptly.
In mitigation, it said there was now a three-step process to review balances, escalating any lack of attention through the steps to the senior management team, “which should prompt the necessary engagement with fee-earners to address any persistent balances”.
The SRA said a rebuke was the appropriate outcome because of Brockbank Curwen’s failure to adequately address the issue for nearly 10 years, despite being drawn to its attention in 2020. This “demonstrates a pattern of failing to comply with its regulatory obligations”.
The residual balances have been kept securely, and no clients have reported to the SRA that the firm has failed to return their money.
It concluded: “There is a low risk of repetition due to the reduced levels of balances now held, and the steps taken to improve the process for reviewing balances, ensuring they are promptly returned to the client or third party for whom they are held.
“Some public sanction is required to uphold public confidence in the delivery of legal services.”
The firm is also to pay the SRA costs of £300.