Protection of client accounts in conveyancing transactions

The Conveyancing Committee has received reports of funds being paid by purchasers or other third parties uninvited to vendor’s solicitor’s client account. The committee understands this is occurring for reasons that include that the proposed purchaser can access these account details from the special conditions of a Contract for Sale and takes it upon themselves to make direct payment.  The committee understands that the practice of including such account details in the Contract has become commonplace in conveyancing transactions because vendor’s solicitors are keen to reduce cybercrime risk.

The Committee is aware of the importance of a solicitor’s anti-money laundering (AML) obligations when managing their client account.

The committee wishes to remind practitioners that funds should only be paid into a solicitor’s client account in accordance with current conveyancing practice, which includes that payments from or on behalf of a purchaser should be routed through that party’s solicitor. Having regard to the AML obligations, any alternative arrangements should only be operated with the express consent of the vendor’s solicitor. Solicitors should therefore endeavour, insofar as possible, to avoid sharing another firm’s client account details with their client or other third party unless this has been agreed in advance.

Accordingly, the committee considers where the vendor’s solicitor wishes to include account details in the Contract (or other document likely to be issued to the purchaser or other third party), it is prudent that the bank account number should not be included in totality. Consideration should be given to redacting, for example, the last four digits necessitating further verification action.

For further information please see the President's Bulletin: Protecting Your Practice from Cybercrime