SRA Handbook

Interpretation

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Version 1 of the Handbook was published on 16/09/2011. For more information, please click 'History' Above

Rule 2: Interpretation

2.1

The guidance notes do not form part of the rules.

2.2

In Parts 1 to 6 and 8 of these rules, unless the context otherwise requires:

accounting period

has the meaning given in rule 33;

agreed fee

has the meaning given in rule 17.5;

AJA

means the Administration of Justice Act 1985;

approved regulator

means any body listed as an approved regulator in paragraph 1 of Schedule 4 to the LSA, or designated as an approved regulator by an order under paragraph 17 of that Schedule;

authorised body

means a body that has been authorised by the SRA to practise as a licensed body or a recognised body;

authorised non-SRA firm

means a firm which is authorised to carry on legal activities by an approved regulator other than the SRA;

bank

has the meaning given in section 87(1) of the SA;

building society

means a building society within the meaning of the Building Societies Act 1986;

client

means the person for whom you act;

client account

has the meaning given in rule 13.2;

client money

has the meaning given in rule 12;

COFA

means the compliance officer for finance and administration in accordance with rule 8.5 of the SRA Authorisation Rules, and in relation to a licensable body is a reference to its Head of Finance and Administration within the meaning of the LSA;

Companies Acts

means the Companies Act 1985 and the Companies Act 2006;

company

means a company registered under the Companies Acts, an overseas company incorporated in an Establishment Directive state and registered under the Companies Act 1985 and/or the Companies Act 2006 or a societas Europaea;

costs

means your fees and disbursements;

Court of Protection deputy

includes a deputy who was appointed by the Court of Protection as a receiver under the Mental Health Act 1983 before the commencement date of the Mental Capacity Act 2005;

director

means a director of a company; and in relation to a societas Europaea includes:

(i)

in a two-tier system, a member of the management organ and a member of the supervisory organ; and

(ii)

in a one-tier system, a member of the administrative organ;

disbursement

means, in respect of those activities for which the practice is regulated by the SRA, any sum spent or to be spent on behalf of the client or trust (including any VAT element);

Establishment Directive

means the Establishment of Lawyers Directive 98/5/EC;

Establishment Directive profession

means any profession listed in Article 1.2(a) of the Establishment Directive, including a solicitor, barrister or advocate of the UK;

Establishment Directive state

means a state to which the Establishment Directive applies;

fees

means your own charges or profit costs (including any VAT element);

firm

means an authorised body, a recognised sole practitioner or a body or person which should be authorised by the SRA as a recognised body or recognised sole practitioner (but which could not be authorised by another approved regulator), but can also include in-house practice;

general client account

has the meaning given in rule 13.5(b);

interest

includes a sum in lieu of interest;

lawyer

means a member of one of the following professions, entitled to practise as such:

(i)

the profession of solicitor, barrister, or advocate of the UK;

(ii)

a profession whose members are authorised to carry on legal activities by an approved regulator other than the SRA;

(iii)

an Establishment Directive profession other than a UK profession;

(iv)

a legal profession which has been approved by the SRA for the purpose of recognised bodies in England and Wales; and

(v)

any other regulated legal profession specified by the SRA for the purpose of this definition;

legal activity

has the meaning given in section 12 of the LSA and includes any reserved legal activity and any other activity which consists of the provision of legal advice or assistance, or representation in connection with the application of the law or resolution of legal disputes;

licensable body

means a body which meets the criteria in rule 14 (Eligibility criteria and fundamental requirements for licensed bodies) of the SRA Practice Framework Rules;

licensed body

means a body licensed by the SRA under Part 5 of the LSA;

licensing authority

means an approved regulator which is designated as a licensing authority under Part 1 of Schedule 10 to the LSA, and whose licensing rules have been approved for the purposes of the LSA;

LLP

means a limited liability partnership incorporated under the Limited Liability Partnerships Act 2000;

local authority

means any of those bodies which are listed in section 270 of the Local Government Act 1972 or in section 21(1) of the Local Government and Housing Act 1989;

LSA

means the Legal Services Act 2007;

manager

means:

(i)

a member of an LLP;

(ii)

a director of a company;

(iii)

a partner in a partnership; or

(iv)

in relation to any other body, a member of its governing body;

MDP

means a licensed body which is a multi-disciplinary practice providing a range of different services, some only of which are regulated by the SRA;

mixed payment

has the meaning given in rule 18.1;

non-solicitor employer

means any employer other than a recognised body, recognised sole practitioner, licensed body or authorised non-SRA firm;

office account

means an account of the firm for holding office money and/or out-of-scope money, or other means of holding office money or out-of-scope money (for example, the office cash box or an account holding money regulated by a regulator other than the SRA);

office money

has the meaning given in rule 12;

out-of-scope money

means money held or received by an MDP in relation to those activities for which it is not regulated by the SRA;

overseas

means outside England and Wales;

partner

means a person who is or is held out as a partner in a partnership;

partnership

means an unincorporated body in which persons are or are held out as partners, and does not include a body incorporated as an LLP;

principal

means:

(i)

a sole practitioner;

(ii)

a partner in a partnership;

(iii)

in the case of a recognised body which is an LLP or company, the recognised body itself;

(iv)

in the case of a licensed body which is an LLP or company, the licensed body itself;

(v)

the principal solicitor or REL (or any one of them) employed by a non-solicitor employer (for example, in a law centre or in commerce and industry); or

(vi)

in relation to any other body, a member of its governing body;

private loan

means a loan other than one provided by an institution which provides loans on standard terms in the normal course of its activities;

professional disbursement

means, in respect of those activities for which the practice is regulated by the SRA, the fees of counsel or other lawyer, or of a professional or other agent or expert instructed by you, including the fees of interpreters, translators, process servers, surveyors and estate agents but not travel agents' charges;

recognised body

means a body recognised by the SRA under section 9 of the AJA;

recognised sole practitioner

means a solicitor or REL authorised by the SRA under section 1B of the SA to practise as a sole practitioner;

regular payment

has the meaning given in rule 19;

REL

means registered European lawyer, namely, an individual registered with the SRA under regulation 17 of the European Communities (Lawyer's Practice) Regulations 2000 (S.I. 2000 no. 1119);

reserved legal activity

has the meaning given in section 12 of the LSA, and includes the exercise of a right of audience, the conduct of litigation, reserved instrument activities, probate activities, notarial activities and the administration of oaths, as defined in Schedule 2 to the LSA;

RFL

means registered foreign lawyer, namely, an individual registered with the SRA under section 89 of the Courts and Legal Services Act 1990;

SA

means the Solicitors Act 1974;

separate designated client account

has the meaning given in rule 13.5(a);

societas Europaea

means a European public limited liability company within the meaning of Article 1 of Council Regulation 2157/2001/EC;

Society

means the Law Society, in accordance with section 87 of the SA;

sole practitioner

means a solicitor or REL practising as a sole principal, and does not include a solicitor or REL practising in-house;

solicitor

means a person who has been admitted as a solicitor of the Senior Courts of England and Wales and whose name is on the roll kept by the Society under section 6 of the SA;

SRA

means the Solicitors Regulation Authority, and reference to the SRA as an approved regulator or licensing authority means the SRA carrying out regulatory functions assigned to the Society as an approved regulator or licensing authority;

SRA Authorisation Rules

means the SRA Authorisation Rules for Legal Services Bodies and Licensable Bodies 2011;

SRA Code of Conduct

means the SRA Code of Conduct 2011;

SRA Practice Framework Rules

means the SRA Practice Framework Rules 2011;

statutory undertakers

means:

(i)

any persons authorised by any enactment to carry on any railway, light railway, tramway, road transport, water transport, canal, inland navigation, dock, harbour, pier or lighthouse undertaking or any undertaking for the supply of hydraulic power; and

(ii)

any licence holder within the meaning of the Electricity Act 1989, any public gas supplier, any water or sewerage undertaker, the Environment Agency, any public telecommunications operator, the Post Office, the Civil Aviation Authority and any relevant airport operator within the meaning of Part V of the Airports Act 1986;

trustee

includes a personal representative (i.e. an executor or an administrator), and "trust" includes the duties of a personal representative;

UK

means United Kingdom;

without delay

means, in normal circumstances, either on the day of receipt or on the next working day; and

you

means:

(i)

a solicitor; or

(ii)

an REL;

in either case who is:

(A)

a sole practitioner;

(B)

a partner in a partnership which is a recognised body, licensed body or authorised non-SRA firm or in a partnership which should be a recognised body but has not been recognised by the SRA;

(C)

an assistant, associate, professional support lawyer, consultant, locum or person otherwise employed in the practice of a recognised body, licensed body, recognised sole practitioner or authorised non-SRA firm; or of a partnership which should be a recognised body but has not been recognised by the SRA, or of a sole practitioner who should be a recognised sole practitioner but has not been authorised by the SRA; and "employed" in this context shall be interpreted in accordance with the definition of "employee" for the purposes of the SRA Code of Conduct;

(D)

employed as an in-house lawyer by a non-solicitor employer (for example, in a law centre or in commerce and industry);

(E)

a director of a company which is a recognised body, licensed body or authorised non-SRA firm, or of a company which is a manager of a recognised body, licensed body or authorised non-SRA firm;

(F)

a member of an LLP which is a recognised body, licensed body or authorised non-SRA firm, or of an LLP which is a manager of a recognised body, licensed body or authorised non-SRA firm; or

(G)

a partner in a partnership with separate legal personality which is a manager of a recognised body, licensed body or authorised non-SRA firm;

(iii)

an RFL practising:

(A)

as a partner in a partnership which is a recognised body, licensed body or authorised non-SRA firm, or in a partnership which should be a recognised body but has not been recognised by the SRA;

(B)

as the director of a company which is a recognised body, licensed body or authorised non-SRA firm, or as the director of a company which is a manager of a recognised body, licensed body or authorised non-SRA firm;

(C)

as a member of an LLP which is a recognised body, licensed body or authorised non-SRA firm, or as a member of an LLP which is a manager of a recognised body, licensed body or authorised non-SRA firm;

(D)

as a partner in a partnership with separate legal personality which is a manager of a recognised body, licensed body or authorised non-SRA firm;

(E)

as an employee of a recognised body, licensed body or recognised sole practitioner; or

(F)

as an employee of a partnership which should be a recognised body but has not been authorised by the SRA, or of a sole practitioner who should be a recognised sole practitioner but has not been authorised by the SRA;

(iv)

a recognised body;

(v)

a licensed body;

(vi)

a manager or employee of a recognised body or licensed body, or of a partnership which should be a recognised body but has not been authorised by the SRA; or

(vii)

an employee of a recognised sole practitioner, or of a sole practitioner who should be a recognised sole practitioner but has not been authorised by the SRA;

and "you" includes "your" as appropriate;

the singular includes the plural and vice versa, and references to the masculine or feminine include the neuter.

Guidance notes

(i)

The effect of the definition of "you" in rule 2.2 is that the rules apply equally to all those who carry on or work in a firm and to the firm itself. See also rule 4 (persons governed by the rules) and rule 5 (persons exempt from the rules).

(ii)

The general definition of "office account" is wide (see rule 2.2). However, rule 17.1(b) (receipt and transfer of costs) and rule 19.1(b) and 19.2(b) (payments from the Legal Services Commission) specify that certain money is to be placed in an office account at a bank or building society. Out-of-scope money can be held in an office account (which could be an account regulated by another regulator); it must not be held in a client account.

(iii)

For a flowchart summarising the effect of the rules, see Appendix 1. For more details of the treatment of different types of money, see the chart "Special situations - what applies" at Appendix 2. These two appendices do not form part of the rules but are included to help solicitors and their staff find their way about the rules.