Solicitors are reminded that the starting date for the new Solicitors Accounts Regulations is fast approaching.
The new regulations come into operation on 1 July, replacing the existing 2014 regulations.
Changes are being introduced to increase protection for client moneys, and to address provisions of the existing regulations, which are considered inadequate or not sufficiently clear.
The Society is here to assist with understanding and adapting to the new financial regulatory regime.
The key changes brought in by the regulations are, as follows:
- Estate moneys to be lodged to the client account,
- Client balancing statements prepared on a quarterly basis,
- Cheque signatory / authoriser to include a solicitor with a practising cert being the sole practitioner or a partner of the firm,
- Client moneys to be returned where legal service has been completed,
- Clients to be notified in writing of moneys applied in satisfaction of costs,
- Witnessed signatures to obtained from recipients of any cash payments,
- Clients to be furnished statement of account in respect of each client matter,
- Documentary evidence of compliance with sections 149 to 153 of the Legal Services Regulation Act on file,
- Client ledger balances to be reviewed for undue or unnecessary delays,
- Client ledger balances outstanding for two years to be listed at year end,
- Documents of record for electronic transfers retained on a separate file,
- Register of funds on joint deposit,
- Back-ups of accounting records on computerised systems,
- Register of undertakings,
- Client accounts are not for the purposes of loans to, from or between clients,
- 'Form of Acknowledgement' contains specific confirmation of compliance,
- Personal moneys cannot be held in or passed through the client account,
- Only funds received in respect of the provision of legal services to clients,
- Regulations apply to all solicitors who handle client moneys,
- Transfers of funds from client to office to be related to specific clients,
- Law Society to be notified where a deficit cannot be rectified within seven days,
- Reporting accountant’s report to be filed within five months,
- Relationship between reporting accountant (RA) to be reviewed,
- RA to test-check transactions before and after balancing dates,
- RA to test-check that withdrawals of fees are notified to clients,
- Closing reports to be filed within three months,
- Reasons to be provided for withdrawal of approval of reporting accountant,
- RA may report directly to the Society an opinion or suspicion of a deficit,
- Law Society investigations may be carried out away from practice,
- The Law Society may communicate with such persons as necessary.
Here to help
The Law Society acknowledges that these changes may cause alarm for members who view the demands of regulatory compliance as increasingly onerous.
With that in mind, the Law Society is committed to guiding and supporting members with any regulatory compliance issue they have.
If you require assistance with navigating these updates to the financial regulatory regime, please contact: email@example.com
For further information on the regulations, please visit our dedicated webpage.