Where the client/owner is an individual, or a group of individuals, who can no longer be traced
Monies held in respect of an individual or group of individuals who cannot be traced are considered bona vacantia under common law. The KLTR will accept these funds if we are satisfied that reasonable efforts have been made to trace the true owner.
The determination of what constitutes reasonable efforts to trace the owner of client money will vary depending on the situation. Several factors will be considered, including but not limited to:
- Age of the residual balance
- Amount held
- Availability of client’s details
- Costs associated with tracing methods.
Whenever feasible, and regardless of the amount, we expect you to thoroughly review your client file and utilise all available contact information to contact your client (or the beneficiary of the funds, if different). For amounts exceeding £50, we expect you to consider carrying out additional searches to locate your client. These searches may include:
- An internet search
- A Directory Enquiries search
- If a previous address is available, an Electoral Register search in the appropriate area.
For larger amounts, it may also be appropriate to consider instructing a tracing agent or placing an advert in a newspaper or other publication. If a tracing agent is employed, please send a copy of their report with your application to the KLTR.
Where funds are abandoned
Where you consider the funds in question to be abandoned, we ask that your application includes a full explanation of why you have come to this conclusion. Generally, we would expect to see that several attempts have been made to facilitate transfer of the funds to the intended recipient. Where sending funds by cheque, that correspondence to the intended recipient should include the following information:
- The date by which you expect the cheque to be cashed; and
- Confirmation that should the recipient fail to cash the cheque by that date, you will treat the funds as abandoned and remit them to the KLTR.
It is for your firm to consider the practical steps that should be taken in respect of any such funds held. However, for larger amounts, we would expect anyone approaching us to have taken additional steps to remit the funds – for example, attempted a personal visit to the recipient, or have instructed sheriff officers deliver a cheque. If no or limited measures have been taken, we would expect to receive an explanation as to why.
Referral process
If you believe you hold bona vacantia funds, please complete the referral form found at the end of this guidance. If you require more space to include information than allowed in the form, then please provide that separately. Please ensure that you fill out the form in block capitals if handwritten and send the form along with a covering letter on your firm's official headed paper. Alternatively, you may scan the form and email it to enquiries@kltr.gov.uk.
This form was prepared in conjunction with the Law Society of Scotland and requires you to provide evidence of reasonable endeavours before the KLTR will accept funds. In the case of practice units regulated by the Law Society of Scotland, the form must be signed on be signed on behalf of the practice unit by the Designated Cashroom Manager.
Solicitors seeking guidance on cash balances may find it helpful to refer to the Law Society of Scotland’s website, specifically guidance related to Rule B6: Accounts, Accounts Certificates, Professional Practice & Guarantee Fund.
Other organisations and persons
If you are not a firm of solicitors but are holding a cash balance you believe is bona vacantia, please contact us via email at enquiries@kltr.gov.uk with your enquiry.