SRA Handbook

Accounts

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Version 6 of the Handbook was published on 01/01/2013. For more information, please click 'History' Above

Rule 50: Accounts

Practice from an office outside the UK

50.1

You must comply with rule 50.3 and 50.4 below in relation to practice from an office outside the UK if you are:

(a)

a solicitor sole practitioner who has held or received client money (overseas practice);

(b)

a lawyer-controlled body which has held or received client money (overseas practice) as a firm (overseas practice);

(c)

a lawyer of England and Wales, or a non-lawyer, who is a manager (overseas practice) of a lawyer-controlled body which holds or receives client money (overseas practice);

(d)

a lawyer of England and Wales who is a manager (overseas practice) of any other firm (overseas practice) which is controlled by lawyers of England and Wales, either directly as partners, members or owners, or indirectly by their ownership of bodies corporate which are partners, members or owners, if the firm (overseas practice) holds or receives client money (overseas practice);

(e)

a solicitor who holds or receives client money (overseas practice) as a named trustee;

(f)

a lawyer of England and Wales, or a non-lawyer, who is a manager (overseas practice) of a lawyer-controlled body and who holds or receives client money (overseas practice) as a named trustee.

Practice from an office in Scotland or Northern Ireland

50.2

You must comply with rule 50.3 and 50.4 below in relation to practice from an office in Scotland or Northern Ireland if you are:

(a)

a solicitor or REL sole practitioner who has held or received client money (overseas practice);

(b)

a lawyer-controlled body, or an REL-controlled body, which has held or received client money (overseas practice) as a firm (overseas practice);

(c)

a lawyer of England and Wales, an REL, a European lawyer registered with the BSB or a non-lawyer, who is a manager (overseas practice) of a lawyer-controlled body, or an REL-controlled body, which holds or receives client money (overseas practice);

(d)

a lawyer of England and Wales or REL who is a manager (overseas practice) of any other firm (overseas practice) which is controlled by lawyers of England and Wales and/or RELs, either directly as partners, members or owners, or indirectly by their ownership of bodies corporate which are partners, members or owners, if the firm (overseas practice) holds or receives client money (overseas practice);

(e)

a solicitor or REL who holds or receives client money (overseas practice) as a named trustee;

(f)

a lawyer of England and Wales, a European lawyer registered with the BSB or a non-lawyer, who is a manager (overseas practice) of a lawyer-controlled body, or an REL-controlled body, and who holds or receives client money (overseas practice) as a named trustee.

Dealings with client money

50.3

In all dealings with client money (overseas practice), you must ensure that:

(a)

it is kept in a client account (overseas practice), separate from money which is not client money (overseas practice);

(b)

on receipt, it is paid without delay into a client account (overseas practice) and kept there, unless the client has expressly or by implication agreed that the money shall be dealt with otherwise or you pay it straight over to a third party in the execution of a trust under which it is held;

(c)

it is not paid or withdrawn from a client account (overseas practice) except:

(i)

on the specific authority of the client;

(ii)

where the payment or withdrawal is properly required:

(A)

for a payment to or on behalf of the client;

(B)

for or towards payment of a debt due to the firm (overseas practice) from the client or in reimbursement of money expended by the firm (overseas practice) on behalf of the client; or

(C)

for or towards payment of costs due to the firm (overseas practice) from the client, provided that a bill of costs or other written intimation of the amount of the costs incurred has been delivered to the client and it has thereby (or otherwise in writing) been made clear to the client that the money held will be applied in payment of the costs due; or

(iii)

in proper execution of a trust under which it is held;

(d)

accounts are kept at all times, whether by written, electronic, mechanical or other means, to:

(i)

record all dealings with client money (overseas practice) in any client account (overseas practice);

(ii)

show all client money (overseas practice) received, held or paid, distinct from any other money, and separately in respect of each client or trust; and

(iii)

ensure that the firm (overseas practice) is able at all times to account, without delay, to each and every client or trust for all money received, held or paid on behalf of that client or trust; and

(e)

all accounts, books, ledgers and records kept in relation to the firm's (overseas practice) client account(s) (overseas practice) are preserved for at least six years from the date of the last entry therein.

Accountants' reports

50.4

You must deliver an accountant's report in respect of any period during which you or your firm (overseas practice) have held or received client money (overseas practice) and you were subject to rule 50.3 above, within six months of the end of that period.

50.5

The accountant's report must be signed by the reporting accountant, who must be an accountant qualified in England and Wales or in the overseas jurisdiction where your office is based, or by such other person as the SRA may think fit. The SRA may for reasonable cause disqualify a person from signing accountants' reports.

50.6

The accountant's report must be based on a sufficient examination of the relevant documents to give the reporting accountant a reasonable indication whether or not you have complied with rule 50.3 above during the period covered by the report, and must include the following:

(a)

your name, practising address(es) and practising style and the name(s) of the firm's (overseas practice) managers (overseas practice);

(b)

the name, address and qualification of the reporting accountant;

(c)

an indication of the nature and extent of the examination the reporting accountant has made of the relevant documents;

(d)

a statement of the total amount of money held at banks or similar institutions on behalf of clients and trusts, and of the total liabilities to clients and trusts, on any date selected by the reporting accountant (including the last day), falling within the period under review; and an explanation of any difference between the total amount of money held for clients and trusts and the total liabilities to clients and trusts;

(e)

if the reporting accountant is satisfied that (so far as may be ascertained from the examination) you have complied with rule 50.3 above during the period covered by the report, except for trivial breaches, or situations where you have been bound by a local rule not to comply, a statement to that effect; and

(f)

if the reporting accountant is not sufficiently satisfied to give a statement under (e) above, details of any matters in respect of which it appears to the reporting accountant that you have not complied with rule 50.3 above.