Solicitors’ Accounts Revision Notes
SRA Accounts Rules
Application – These apply to authorised bodies, their managers and employees and only apply in
respect of activities regulated by the SRA.
Liability – The managers of authorised bodies are jointly and severally responsible for
compliance.
Authorised Body – A body authorised by the SRA to practise as licensed or recognised by
the SRA.
Manager – The sole principal in a recognised sole practice, members of an LLP, directors of a
company, partners in a partnership, or in any other body, a member of its governing body.
Sanctions – Breaches of the Accounts Rules may see solicitors referred to the Solicitors
Disciplinary Tribunal. There is the risk of serious sanction, including striking off the roll, if
they have been dishonest.
Obligation to Safeguard – Solicitors and firms must safeguard money and assets entrusted to
them by clients and others.
Types of Money
Client Money – Money held or received by authorised bodies, their managers, and their
employees:
o relating to regulated services delivered to a client;
o on behalf of a third party in relation to regulated services delivered to a client;
o as a trustee or as the holder of a specified office or appointment; or
o in respect of fees and unpaid disbursements if held or received prior to delivery of a bill.
Guidance on Client Money – Money of any currency that is received and held as cash, cheque,
draft, or electronic transfer when they are providing legal services can constitute client money.
Office / Appointment – Where a solicitor has been appointed as a deputy by the Court of
Protection, the mentally incapacitated person’s should be kept in a separate account.
Availability – Client money must be available on demand unless an alternative arrangement is
agreed in writing with the client or third party.
Non-Client Money – Any monies which do not fall within the definition of “client money”.
Types of Accounts
Client Account
Requirements – A firm must maintain a client account at a branch or head office of a bank or
building society in England and Wales.
Name – The client account must include the name of the firm and the word “client” to
distinguish it from any other type of account held or operated by the firm.
Non-Use for Banking – A firm must not use a client account to provide banking facilities to
clients or third parties. Deposits, transfers, or withdrawals must be in respect of the delivery of
regulated services.
Regulated Service – The legal and other professional services a solicitor / firm provides that
are regulated by the SRA.
Segregation – A firm must keep client money separate from non-client money.
Allocation of Mixed Payments – Funds from mixed payments received must be allocated
promptly to the correct client account or business account.
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, Mixed Payment – A payment made to a client account or business account that includes
client money and non-client money.
Duty to Return – Client money needs to be returned promptly as soon as there is no longer any
proper reason to hold the money.
Payments into Client Account
Payments In – A firm must ensure that client money is paid promptly into a client account
unless:
o to do so would conflict with its obligations under rules or regulations relating to its
specified office or appointment;
o the client money represents payments received from the Legal Aid Agency for costs;
o the firm agrees, in the individual circumstances, an alternative arrangement in writing
with the client for whom the money is held.
Withdrawals from Client Account
Sufficient Funds – A firm must only withdraw client money from a client account if sufficient
funds are held on behalf of that specific client.
Supervision – A firm must appropriately authorise and supervise all withdrawals made from a
client account.
Making Withdrawals – A firm may only withdraw client money from a client account (a) for the
purpose for which it is held, (b) following receipt of instructions from the client or third party for
whom the money is held, or (c) on the SRA’s prior written authorisation or in prescribed
circumstances.
Prescribed Circumstances – The withdrawal of residual client account balances of less than
£500 on any one client matter provided:
o the balance is paid to a charity of the authorised body’s choice; and
o the authorised body has met the conditions set out (which include taking reasonable
steps to find the rightful owner and recording those steps).
Payment of Interest on Client Money
Account for Interest – A firm must account to clients or third parties for a fair sum of interest on
any client money held by the firm on their behalf.
Exception – A firm need not account for interest where, by written agreement, a different
agreement is reached with the client or third party for whom the money is held.
Requirement – The firm must provide sufficient information to enable them to give
informed consent.
Holding Interest – Interest is non-client money cannot be held in a client account. Any interest
should be paid into the business account.
Joint Account
Joint Account – An account which is in the names of a solicitor / authorised body and a client or
third party.
Money Status – A joint account is not a client account, but money held in a joint account is
client money.
Benefit – A joint account allows a solicitor / authorised body to operate and manage the
account and money in it along with another person.
Applicable Rules – To comply with the SRA Accounts Rules, an authorised body must:
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SRA Accounts Rules
Application – These apply to authorised bodies, their managers and employees and only apply in
respect of activities regulated by the SRA.
Liability – The managers of authorised bodies are jointly and severally responsible for
compliance.
Authorised Body – A body authorised by the SRA to practise as licensed or recognised by
the SRA.
Manager – The sole principal in a recognised sole practice, members of an LLP, directors of a
company, partners in a partnership, or in any other body, a member of its governing body.
Sanctions – Breaches of the Accounts Rules may see solicitors referred to the Solicitors
Disciplinary Tribunal. There is the risk of serious sanction, including striking off the roll, if
they have been dishonest.
Obligation to Safeguard – Solicitors and firms must safeguard money and assets entrusted to
them by clients and others.
Types of Money
Client Money – Money held or received by authorised bodies, their managers, and their
employees:
o relating to regulated services delivered to a client;
o on behalf of a third party in relation to regulated services delivered to a client;
o as a trustee or as the holder of a specified office or appointment; or
o in respect of fees and unpaid disbursements if held or received prior to delivery of a bill.
Guidance on Client Money – Money of any currency that is received and held as cash, cheque,
draft, or electronic transfer when they are providing legal services can constitute client money.
Office / Appointment – Where a solicitor has been appointed as a deputy by the Court of
Protection, the mentally incapacitated person’s should be kept in a separate account.
Availability – Client money must be available on demand unless an alternative arrangement is
agreed in writing with the client or third party.
Non-Client Money – Any monies which do not fall within the definition of “client money”.
Types of Accounts
Client Account
Requirements – A firm must maintain a client account at a branch or head office of a bank or
building society in England and Wales.
Name – The client account must include the name of the firm and the word “client” to
distinguish it from any other type of account held or operated by the firm.
Non-Use for Banking – A firm must not use a client account to provide banking facilities to
clients or third parties. Deposits, transfers, or withdrawals must be in respect of the delivery of
regulated services.
Regulated Service – The legal and other professional services a solicitor / firm provides that
are regulated by the SRA.
Segregation – A firm must keep client money separate from non-client money.
Allocation of Mixed Payments – Funds from mixed payments received must be allocated
promptly to the correct client account or business account.
1
, Mixed Payment – A payment made to a client account or business account that includes
client money and non-client money.
Duty to Return – Client money needs to be returned promptly as soon as there is no longer any
proper reason to hold the money.
Payments into Client Account
Payments In – A firm must ensure that client money is paid promptly into a client account
unless:
o to do so would conflict with its obligations under rules or regulations relating to its
specified office or appointment;
o the client money represents payments received from the Legal Aid Agency for costs;
o the firm agrees, in the individual circumstances, an alternative arrangement in writing
with the client for whom the money is held.
Withdrawals from Client Account
Sufficient Funds – A firm must only withdraw client money from a client account if sufficient
funds are held on behalf of that specific client.
Supervision – A firm must appropriately authorise and supervise all withdrawals made from a
client account.
Making Withdrawals – A firm may only withdraw client money from a client account (a) for the
purpose for which it is held, (b) following receipt of instructions from the client or third party for
whom the money is held, or (c) on the SRA’s prior written authorisation or in prescribed
circumstances.
Prescribed Circumstances – The withdrawal of residual client account balances of less than
£500 on any one client matter provided:
o the balance is paid to a charity of the authorised body’s choice; and
o the authorised body has met the conditions set out (which include taking reasonable
steps to find the rightful owner and recording those steps).
Payment of Interest on Client Money
Account for Interest – A firm must account to clients or third parties for a fair sum of interest on
any client money held by the firm on their behalf.
Exception – A firm need not account for interest where, by written agreement, a different
agreement is reached with the client or third party for whom the money is held.
Requirement – The firm must provide sufficient information to enable them to give
informed consent.
Holding Interest – Interest is non-client money cannot be held in a client account. Any interest
should be paid into the business account.
Joint Account
Joint Account – An account which is in the names of a solicitor / authorised body and a client or
third party.
Money Status – A joint account is not a client account, but money held in a joint account is
client money.
Benefit – A joint account allows a solicitor / authorised body to operate and manage the
account and money in it along with another person.
Applicable Rules – To comply with the SRA Accounts Rules, an authorised body must:
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