Residual client balances

When client funds remain unclaimed after the closure of a client matter, certain measures need to be taken before releasing the funds other than to the client. This practice note provides an overview of the requirements for firms and offers practical guidance for dealing with residual client balances.

This practice note may be subject to revision following the outcome of the Solicitors Regulation Authority's (SRA) 2025 consultation on client money in legal services, which considers changes to how residual balances and third-party managed accounts (TPMAs) are treated.

You should monitor for updates during the next review cycle.

This practice note includes advice on:

  • the rules relating to residual client balances
  • steps to take to return funds to clients
  • what to do when the client cannot be traced

The practice note is relevant to all law firms and sole practitioners authorised by the SRA.

It is also relevant to individual solicitors, registered European lawyers (RELs) and registered foreign lawyers (RFLs), wherever they practise, to the extent they are holding client money.

The SRA Standards and Regulations 2019 replaced the SRA Handbook from 25 November 2019.

This practice note is the Law Society’s view of good practice in this area, and is not legal advice. For more information see the legal status.