Protection of solicitor client monies when buying a house

devoncaroline

Never considered this before, but having sold two houses in March/April, lived in rented accommodation until now and squirreled the proceeds among many financial instituations, we now need to have the money all in one place -our solicitors Lloyds TSB bank account. Is this madness? About £380k (overnight but even so)...We know we will be covered up to £100k by the Financial Services Compensation Scheme (being two of us). Anyone any ideas/ could we insure the money do you think?
Thanks for reading..

silvercar

The solicitor will hold the money in a client account, so it would be protected if the solicitor went insolvent overnight.

If Lloyds became insolvent overnight, I'm sure the government would step in - just as they did for RBS and NR.

Richard_Webster

Is this madness?

The solicitor will hold the money in a client account, so it would be protected if the solicitor went insolvent overnight.

If Lloyds became insolvent overnight, I'm sure the government would step in - just as they did for RBS and NR.

And you could all get eaten by a lion escaped from a local zoo - stop worrying!

franklee

Richard_Webster wrote: »

And you could all get eaten by a lion escaped from a local zoo - stop worrying!

Two lions walking down Oxford Street.
One turns to the other and says, "Not many people about, are there?"

Although unlikely to happen I'd think the OP is insured against being a lion's dinner - with life insurance.

I always thought insurance was to cover the unlikely events that would have serious consequences should the worst happen. As such the money being well over the scheme limits for a few days would seem a thing to consider as the premium is likely to be very small and the consequences of the worst happening, a failure to complete on time, large.

Even if the government did step in it may be the money isn't available for months, didn't people at some of the banks that failed have to wait months for their money back? I seem to remember them discussing this at length on the savings board.

So I'd be curious to know details if there was such insurance available. If not presumably the solicitor does not have any insurance of their own that covers it so is the buyer responsible?

silvercar

I always thought insurance was to cover the unlikely events that would have serious consequences should the worst happen. As such the money being well over the scheme limits for a few days would seem a thing to consider as the premium is likely to be very small and the consequences of the worst happening, a failure to complete on time, large.

If Lloyds TSB failed overnight, I'm sure there would be more to worry about than one buyer's failure to complete. Just imagine the number of people who would lose access to their money.

So I'd be curious to know details if there was such insurance available. If not presumably the solicitor does not have any insurance of their own that covers it so is the buyer responsible?

Solicitors have professional indemnity insurance. In this case how would you suggest they haven't behaved in a professional manner? They have a client account that complies with Law Society rules and also they have chosen a mainstream bank to hold the account. I doubt that their PI insurance would cover it.

You would have difficulty taking out specific insurance for one transaction, as shown in this article from a major PI company.

http://www.stgilesgroup.co.uk/ArticleDetail.aspx?articleId=42ac45fc-9e34-4c0c-9c8e-db7b150e5cc6#

Richard_Webster

uote:
Originally Posted by Richard Webster
And you could all get eaten by a lion escaped from a local zoo - stop worrying!
Two lions walking down Oxford Street.
One turns to the other and says, "Not many people about, are there?"

I had forgotten about the Oxford Street Lions...........