Solicitors frequently ask clients to pay money up front on account of costs before they start work and during the course of the matter. This “money on account of costs” is paid into the solicitor’s client account and cannot be used for the solicitor’s fees until he renders a bill for work done.
The solicitor cannot deliver a bill for work which he has not yet done, so any money left over after payment of the bill for the work already done, will remain in client account and belongs to the client. Any interest accruing on the money will also belong to the client in most cases.
Once a bill has been rendered, the solicitor can transfer enough of the funds on account from his client’s account to his office account to discharge the bill.
The solicitor is entitled to use money on account to pay disbursements, such as court fees, medical report fees, barristers’ fees and so on, and these can be paid directly out of the client account.
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Private Client newsletter Dec 2012