Authorising Withdrawals from Client Account

[Jade Oxley]

Is it permissable for a non-owner employee of a firm to authorise withdrawals from client account? Rule 5.2 says “You appropriately authorise and supervise all withdrawals made from a client account”. If the employee works in the Accounts department and has a good knowledge of the Accounts Rules, would it be acceptable for them to be able to authorise withdrawals?

[Elizabeth Simon]

Hi Jade,

Yes, it’s permissible under the rules (if you think, a non-owner employee can be COFA so it goes to follow that they could authorise withdrawals), but they need to be of “sufficient seniority” to be able to properly carry out the requirements of authorising withdrawals. Seniority isn’t just about knowledge/experience of the accounts rules (although that’s obviously super important!), it’s also about being able to act independently of the firm’s hierarchy. For example, would the employee be comfortable refusing to authorise a payment requested by a Partner, if they thought it breached the rules? Would they be comfortable arguing with a senior solicitor as to whether a transaction might constitute banking facilities? And so on. Some might say that it’s a difficult/unfair position to put a non-owner in, although that very much comes down to the firm’s attitude towards compliance and its general ethos.

Hope that helps!

Liz

[Jade Oxley]

Thanks Liz, that’s really helpful 🙂

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