SRA Accounts Rules – 2019
Rule 1 – Application Rule 1.1: “Authorised bodies” (Solicitors’ firms and ABS multi-disciplinary practices).
Rule: 1.2: Managers and employees of authorised bodies
(Who is bound by the Essentially, the rules cover anyone regulated by the SRA.
rules?) References to “you” in the Rules and these notes should be read accordingly.
Rule 2 – What is client Rule 2.1: Definition:
money? (a) Money which relates to regulated services delivered to a client;
(b) Money held on behalf of a third party in relation to regulated services delivered by you.
(c) Money held as a trustee or as the holder of a specified office or appointment.
(d) Money held in respect of your fees and any unpaid disbursements if held or received prior to delivery of a
bill for the same.
Rule 2.2: Exception to the Requirement to Maintain a Client Account:
You do not have to hold money in a client account IF:
The only client money held by the firm falls within Rule 2.1(d) (money in respect of fees / unpaid disbursements
which have not yet been billed) AND
Any money held for disbursements relates to costs or expenses incurred by you on behalf of your client and for
which you are liable AND
The firm does not, for any other reason, maintain a client account AND
The firm has informed the client in advance of where and how money will be held .
Rule 2.3: Must be Paid “Promptly”:
Client money must be paid “promptly” into a client account EXCEPT
Rule 2.3(a): Where this would conflict with your obligations under an office or appointment.
Rule 2.3(b): Where client money is received from the Legal Aid Agency for the firm’s costs.
Rule 2.3(c): Where you agree an alternative arrangement in writing with a client, or the third party, for whom the
money is held.
Rule 2.4: Money “on Demand”:
Must make client money available “on demand” UNLESS an alternative arrangement is agreed in writing.
Rule 2.5: Return Client Money “Promptly”
Must return client money promptly to the client / third party as soon as there is no longer any proper reason to
hold those funds.
Rule 3 – Client Account 3.1: Client Account must be in England or Wales
Firms must hold money in a client account at a bank account or building society in England and Wales (3.1)
3.2: Must include in the title:
, The name of the authorised body (the firm) (3.2(a))
The word “client”.
3.3: Banking Facilities:
You must not use a client account to provide banking facilities to clients or third parties.
Payments to/from a client account must be in respect of the delivery by you of regulated services.
Rule 4 – Client Money Must 4.1: Must keep Client Money Separate:
be Kept Separate You must keep client money separate from money belonging to the authorised body.
4.2: Allocate Mixed Payments “Promptly”
You ensure that you allocate promptly any funds from mixed payments you receive to the correct client account
or business account.
4.3: Requirement to Provide a Bill Before Transferring Client Money:
Where you are holding client money and some or all of that money will be used to pay your costs:
You must give a bill/written notification to the client or the paying party;
This must be done before you transfer any client money to make the payment;
Any such payment must be for the specific sum identified in the bill of costs and covered by the amount
held for the particular client or third party.
Rule 5 – Withdrawals from Rule 5.1: Client money can ONLY be withdrawn:
the Client Account For the purpose for which it is being held (e.g. for the purchase of a property).
Following receipt of instructions from the client.
On the SRA’s prior written authorisation or in prescribed circumstances.
Rule 5.2: Authorise and Supervise Withdrawals:
You must appropriately authorise and supervise all withdrawals.
Rule 5.3: Only Withdraw if there are Sufficient Funds:
You only withdraw client money if sufficient funds are held on behalf of that specific client or third party to make
the payment.
Rule 6 – Duty to Correct Rule 6.1: You must correct any breaches rules promptly upon discovery.
Breaches on Discovery Any money improperly withdrawn / withheld must be immediately replaced.
Rule 7 - Interest Rule 7.1: Firms must account for a “fair sum” of interest.
Rule 7.2: They may come to a different arrangement by written agreement.
Must give the client/third party sufficient information to enable them to give informed consent.
Rule 8 – Client Accounting Solicitors must keep:
Systems and Controls 8.1(a): A client ledger account
Identified by the client’s name and an appropriate description of the matter.
Rule 1 – Application Rule 1.1: “Authorised bodies” (Solicitors’ firms and ABS multi-disciplinary practices).
Rule: 1.2: Managers and employees of authorised bodies
(Who is bound by the Essentially, the rules cover anyone regulated by the SRA.
rules?) References to “you” in the Rules and these notes should be read accordingly.
Rule 2 – What is client Rule 2.1: Definition:
money? (a) Money which relates to regulated services delivered to a client;
(b) Money held on behalf of a third party in relation to regulated services delivered by you.
(c) Money held as a trustee or as the holder of a specified office or appointment.
(d) Money held in respect of your fees and any unpaid disbursements if held or received prior to delivery of a
bill for the same.
Rule 2.2: Exception to the Requirement to Maintain a Client Account:
You do not have to hold money in a client account IF:
The only client money held by the firm falls within Rule 2.1(d) (money in respect of fees / unpaid disbursements
which have not yet been billed) AND
Any money held for disbursements relates to costs or expenses incurred by you on behalf of your client and for
which you are liable AND
The firm does not, for any other reason, maintain a client account AND
The firm has informed the client in advance of where and how money will be held .
Rule 2.3: Must be Paid “Promptly”:
Client money must be paid “promptly” into a client account EXCEPT
Rule 2.3(a): Where this would conflict with your obligations under an office or appointment.
Rule 2.3(b): Where client money is received from the Legal Aid Agency for the firm’s costs.
Rule 2.3(c): Where you agree an alternative arrangement in writing with a client, or the third party, for whom the
money is held.
Rule 2.4: Money “on Demand”:
Must make client money available “on demand” UNLESS an alternative arrangement is agreed in writing.
Rule 2.5: Return Client Money “Promptly”
Must return client money promptly to the client / third party as soon as there is no longer any proper reason to
hold those funds.
Rule 3 – Client Account 3.1: Client Account must be in England or Wales
Firms must hold money in a client account at a bank account or building society in England and Wales (3.1)
3.2: Must include in the title:
, The name of the authorised body (the firm) (3.2(a))
The word “client”.
3.3: Banking Facilities:
You must not use a client account to provide banking facilities to clients or third parties.
Payments to/from a client account must be in respect of the delivery by you of regulated services.
Rule 4 – Client Money Must 4.1: Must keep Client Money Separate:
be Kept Separate You must keep client money separate from money belonging to the authorised body.
4.2: Allocate Mixed Payments “Promptly”
You ensure that you allocate promptly any funds from mixed payments you receive to the correct client account
or business account.
4.3: Requirement to Provide a Bill Before Transferring Client Money:
Where you are holding client money and some or all of that money will be used to pay your costs:
You must give a bill/written notification to the client or the paying party;
This must be done before you transfer any client money to make the payment;
Any such payment must be for the specific sum identified in the bill of costs and covered by the amount
held for the particular client or third party.
Rule 5 – Withdrawals from Rule 5.1: Client money can ONLY be withdrawn:
the Client Account For the purpose for which it is being held (e.g. for the purchase of a property).
Following receipt of instructions from the client.
On the SRA’s prior written authorisation or in prescribed circumstances.
Rule 5.2: Authorise and Supervise Withdrawals:
You must appropriately authorise and supervise all withdrawals.
Rule 5.3: Only Withdraw if there are Sufficient Funds:
You only withdraw client money if sufficient funds are held on behalf of that specific client or third party to make
the payment.
Rule 6 – Duty to Correct Rule 6.1: You must correct any breaches rules promptly upon discovery.
Breaches on Discovery Any money improperly withdrawn / withheld must be immediately replaced.
Rule 7 - Interest Rule 7.1: Firms must account for a “fair sum” of interest.
Rule 7.2: They may come to a different arrangement by written agreement.
Must give the client/third party sufficient information to enable them to give informed consent.
Rule 8 – Client Accounting Solicitors must keep:
Systems and Controls 8.1(a): A client ledger account
Identified by the client’s name and an appropriate description of the matter.
