Telegraphic Transfer Fees & Secret Profits - Get It Right Or Face A Fine!!

Law Society Practice Note 30^th July 2008

Following a recent Solicitors Disciplinary Tribunal (SDT) in which the clients were deemed to have been misled in the way a solicitor had dealt with charging TT fees, the Law Society have issued a Practice Note on how such matters should be dealt with. 

The findings of the SDT were that the fee charged to the client had been described as a disbursement which was inaccurate as this hid the fee for handling a transfer in addition to the bank’s charge. As well as the practice’s invoices not reflecting the true position, the matter was also not addressed in the letters addressed to the client. The clients had therefore been misled and the respondents were fined £1,500 each, for a breach of rule 1 and 2 of the Solicitors’ Code of Conduct 2007.

So how are you to charge for a telegraphic transfer…? In summary the Practice Note states:

1. You must advise the client of the basis and terms of your charges – include in your client care letters that the charge you make for TT fees includes the cost to you, of say £15, plus an additional fee related to the work undertaken in arranging the TT;
2. Ensure that only the cost incurred for the TT fee is included under disbursement heading on your bill of costs i.e. £15 plus VAT using the above example, and that the additional fee charged is included as a profit cost, and not part of the disbursement.

To review the full Practice Note, click on the link below

http://www.lawsociety.org.uk/productsandservices/practicenotes/transferfees/865.article

Should you wish to discuss this further, please contact Bennett Brooks’ Solicitor’s Team on 0845 330 3200.