Version 1 of the Handbook was published on 16 September 2011, and was superseded by Version 2 on 23 December 2011. For more information, click "History" above.
If you hold or receive client money, you must keep one or more client accounts (unless all the client money is always dealt with outside any client account in accordance with rule 8, rule 9, rule 15 or rule 16).
A "client account" is an account of a practice kept at a bank or building society for holding client money, in accordance with the requirements of this part of the rules.
The client account(s) of:
a sole practitioner must be in the name under which the sole practitioner is recognised by the SRA, whether that is the sole practitioner's own name or the firm name;
a partnership must be in the name under which the partnership is recognised by the SRA;
an incorporated practice must be in the company name, or the name of the LLP, as registered at Companies House;
in-house solicitors or RELs must be in the name of the current principal solicitor/REL or solicitors/RELs;
trustees, where all the trustees of a trust are managers and/or employees of the same recognised body or licensed body, must be either in the name of the recognised body/licensed body or in the name of the trustee(s);
trustees, where all the trustees of a trust are the sole practitioner and/or his or her employees, must be either in the name under which the sole practitioner is recognised by the SRA or in the name of the trustee(s);
and the name of the account must also include the word "client" in full (an abbreviation is not acceptable).
A client account must be:
a bank account at a branch (or a bank's head office) in England and Wales; or
a building society account at a branch (or a society's head office) in England and Wales.
There are two types of client account:
a "separate designated client account", which is an account for money relating to a single client, other person or trust, and which includes in its title, in addition to the requirements of rule 13.3 above, a reference to the identity of the client, other person or trust; and
a "general client account", which is any other client account.
Before opening a client account, a licensed body must enter into a written agreement with the bank or building society acknowledging that the account will hold client money, and that the bank or building society shall not have any recourse or right against the money standing to its credit in respect of any liability of the licensed body to the bank or building society, other than a liability in connection with the account. This requirement must also be complied with by a firm which becomes a licensed body, whether opening new client accounts or using its existing client accounts. The licensed body must ensure that the agreement is kept on foot.
The clients of a licensed body must be informed at the outset of the retainer, or during the course of the retainer as appropriate, if the licensed body is (or becomes) owned by a bank or building society and its client account is held at that bank or building society (or another bank or building society in the same group).
Money held in a client account must be immediately available, even at the sacrifice of interest, unless the client otherwise instructs, or the circumstances clearly indicate otherwise.
In the case of in-house practice, any client account should include the names of all solicitors or registered European lawyers held out on the notepaper as principals. The names of other employees who are solicitors or registered European lawyers may also be included if so desired. Any person whose name is included will have to be included on the accountant's report.
A firm may have any number of separate designated client accounts and general client accounts.
Compliance with rule 13.1 to 13.4 ensures that clients of a recognised body or recognised sole practitioner, as well as the bank or building society, have the protection afforded by section 85 of the Solicitors Act 1974. Rule 13.6 seeks to give protection, similar to that afforded by section 85, to clients of licensed bodies. It will be repealed on the coming into force of the Order referred to in rule 53 which will give the equivalent statutory protections to client money held by a licensed body.