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The Solicitors’ Disciplinary Tribunal recently found in a case brought to them that solicitors must specify clearly to you when preparing your bill, what they are actually paying out on your behalf for a bank charge and what they are charging for “organising the transfer”. In my view, no admin charge should be made, seeing as the work required is minimal and should form part of the conveyancing process.
If a solicitor is charging you more than the direct cost to them, plus VAT, they must make it clear to you that the excess is a charge by the solicitor and not an expense.
The recent decision by the SDT involved a case in which a firm of solicitors charged clients £30 plus VAT for telegraphic transfers. The actual cost in bank charges to the solicitors was £10 for each TT (a TT or telegraphic transfer is just a same day electronic payment from account to account). The remaining £20 represented profit for the solicitors, to reflect the work they did in organising the transfer; they billed their clients for a “disbursement” of £30, without making it clear how that figure was calculated. It is my view on speaking to clients that many other solicitors, certainly in my area, have done the same.
The SDT found that the solicitors had attempted to deceive their clients. This was a breach of their obligation to act with integrity (under rule 1 of the Code of Conduct to which all solicitors must comply) and of their duty to give clear information about costs (rule 2 C of C). The partners of the firm were fined £1500 each.
The same principle applies to fees for undertaking Money Laundering electronic identification check (EID). Some firms charge their clients more than the EID costs the firm. They cannot do so without making this clear to the client.
If you find yourself in any way unclear regarding disbursements, always bear in mind that you have the right to ask how the figure is calculated and whether it represents exactly the fee charged to the firm by the relevant third party.
Any breach of the Solicitors’ Regulation Authority Code of Conduct is treated very seriously and you would be entitled to make a complaint if you find yourself being deceived in the way described above.
Yet another thing to be aware of regarding solicitors’ costs!
2 Responses to “Solicitors quoting disbursements – bank charges”
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April 14th, 2009 at 9:19 pm
Bank overdraft fees are becoming absolutely ridiculous. On my site, we get 4-5 people a day complaining about being unfairly charged. Bank of America has just agreed to now charges up to 10 overdraft fees per day at $39 a pop. Considering how they re-order transactions to optimize their fees, this is going to seriously hurt even more customers. Its time to stand up against these policies and demand change.
September 1st, 2009 at 10:46 am
I agree the banks charges are ridiculous but as long as the solicitors clearly state what their fee or cost is then I can’t see the problem. Even if the work involved is minimal surely you are paying for the peace of mind and professional, qualified services of a solicitor?