‘An Overview Of The New Solicitors Accounts Regulations In Force From 1 July 2023’
The new Solicitors Accounts Regulations came into operation on 1 July 2023. The purpose of the new Regulations is to increase protection for client moneys and address provisions of the 2014 Regulations which were considered inadequate or not sufficiently clear.
Key New Changes Covered By The Regulations Include:
- Estate accounts - solicitor acting as personal representative of an estate
- Balancing statements every three months instead of every six months
- Undue or unnecessary delays - accumulated client ledger balances
- Balances outstanding two years or more
- Reporting accountant's report
- Compliance partners’ increased responsibilities
- Authorised cheque/EFT signatories
- Deficits in client funds not rectified within seven days
- Loans from, to or between clients
- Statements of account to be provided to clients
- Return money to clients - solicitor not to hold client’s moneys in the client account for a period longer than 6 months after the completion of legal services.
- Cash payments to clients
- Withdrawals from client account must be related to a specific client at the time of the withdrawal.
- Bills of costs - documentary evidence of compliance Section 149 to 153 (inclusive) of the 2015 Legal Services Regulation Act.
- When personal moneys of solicitor can/not pass through the client account.
- Accounting records – copies on the client file, separate files dedicated to such transactions; necessary offsite back-ups of computerised information
- Withdrawal by the Law Society of approval of an accountant as a Reporting accountant
- Examination by the Reporting accountant – test checks they must carry out
- Possible Notification to the Society by Reporting accountant
- Law Society investigations – including other than at the solicitor’s place of business.
- Responsibility for breach of the Regulations – including solicitors who handle the client’s file
- Regulation text - View the complete Solicitors Accounts Regulations
This video does not form part of the Regulations and is for assistance only.
Neil Mulcahy, FCA CTC, is the MLRO in his accountancy and tax consultancy firm, and has been retained on numerous occasions by financial institutions and the Revenue in his capacity as an external reporting forensic accountant. In this video he overviews this very important, topical and practical area of the law, with which we must be 100% in compliance. While this regulatory Matters CPD topic is mandatory for sole practitioners and compliance partners and/or an anti-money laundering compliance partners, it should be part of all practitioners’ choice of annual CPD.
|Category of CPD:||Regulatory (and/or Management and/or General)*|
* (which you can also use as Management or General CPD if you have already done your mandatory Regulatory and/or Management hours, respectively).