Earlier this year the SRA announced that drastic changes will be made to the 52 rules, such that the SRA ‘rule book’ will be reduced to only 13 rules with effect from the 25th November, 2019. Find out more in our latest blog...
Earlier this year the SRA announced that drastic changes will be made to the 52 rules, such that the SRA ‘rule book’ will be reduced to only 13 rules with effect from the 25th November, 2019.
There will still be an overarching principle being the protection of client money, however, the rules will be less rigid and allow an increase in professional judgement, giving the solicitor firm more freedom to meet the stands set by the SRA.
This new approach by the SRA puts each solicitor firm in the position of deciding for themselves how to protect client monies. The main principles will be as follows;
Keeping client money secure and separate from the firms day to day trading activities
Ensuring client money is used for its intended use
Returning any outstanding monies promptly to the client
The onus has been put on the solicitor firm to meet the SRA standards, and the responsibility will remain with the firm.
The key rule changes from 25th November, 2019 are:
Changes to the definition of what is ‘client money’
Changes in how legal aid agency payments are treated
Transferring monies - The 14 day rule has been removed
An emphasis on ‘promptly’ and what this means to each solicitor firm
Residual balances – the notification of residual balances has been eased
Disbursements – A bill must be raised before funds can be transferred from the client account
Costs – the definition of ‘cost’ includes disbursements
Not entirely. The time frame to transfer monies, should the firm wish to, can be transferred within the parameters of the old rules. It is important, however, to document why these rules are still relevant to the solicitor firm. There are fundamental changes to the SRA rules which simply cannot be ignored by the solicitor firm.
Read the reformed rules – they have been condensed to 7 pages!
Review the firms internal controls and systems
Document any decisions you as a firm decide on, providing rationale behind such decisions.
Consider training so all staff are aware of the new rules / definitions and the implications thereon
From 25th November, 2019 it is mandatory for all solicitor firms to include the ‘clickable SRA logo’ – more information can be found here.
Should you wish to speak to any of our solicitor accounts specialists, then please do not hesitate to get in touch.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.