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Rule 30 – Restrictions on transfers between clients
(1) A paper transfer of money held in a general client account from the ledger of one client to the ledger of another client may only be made if:
(a) it would have been permissible to withdraw that sum from the account under rule 22(1); and
(b) it would have been permissible to pay that sum into the account under rule 15; (but there is no requirement in the case of a paper transfer for the written authority of a solicitor, etc., under rule 23(1)).
(2) No sum in respect of a private loan from one client to another can be paid out of funds held for the lender either:
(a) by a payment from one client account to another;
(b) by a paper transfer from the ledger of the lender to that of the borrower; or
(c) to the borrower directly,
except with the prior written authority of both clients.
Notes
(i) "Private loan" means a loan other than one provided by an institution which provides loans on standard terms in the normal course of its activities – rule 30(2) does not apply to loans made by an institutional lender. See also practice rule 6, which prohibits a solicitor from acting for both lender and borrower in a private mortgage at arm’s length.
(ii) If the loan is to be made by (or to) joint clients, the consent of each client must be obtained.
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