On November 7th, 2013 the Council of the Law Society approved the Solicitors Accounts Regulations which came into force on 1 December 2014. Prior to the 2014 Regulations, the following five statutory instruments relating to solicitors’ accounting records were set out:
- Solicitors Accounts Regulations 2001
- Solicitors (Interest on Client’s Moneys) Regulations 2004
- Solicitor Accounts (Amendment) Regulations 2005
- Solicitors Accounts (Amendment) Regulations 2006
- Solicitors Accounts (Amendment) Regulations 2013
The Law Society has introduced one statutory instrument to deal with all the Solicitors Accounts Regulations. It can be noted that no fundamental changes to provisions of the existing Solicitors Accounts Regulations have been made.
The amendments were made in regards to the following:
- Client account and office account
- Controlled trusts
- Non controlled trusts
- Insolvency arrangements
- Minimum accounting records
- Reporting accountant’s report
- Investigation of solicitors’ practices
As previously mentioned, one of the most important Solicitor Account Regulations amendments that has been made reflects the changes in where moneys can be lodged. Correspondingly, failing to lodge moneys into the appropriate account is now considered a breach. Also, solicitors must keep books of account and relevant documents showing the financial position of the solicitor’s transactions with client’s moneys.
These changes apply to solicitors who provide legal services as a sole practitioner or as a partner in a firm of solicitors and solicitors who act as personal insolvency practitioners (PIPs).
One important note regarding the PIP is that if you are a Solicitor involved in PIP you can now claim that this is regulated under the Solicitors Accounts Regulations.
Under the new PIP regulation solicitors must pay all moneys received directly to an insolvency arrangement account. Solicitors are also now required to include information in relation to control trusts and insolvency arrangement accounts in the balancing statements.
According to www.lawsociety.ie, in the new Solicitors Accounts Regulations, solicitors are also asked to maintain a record of lodgements to insolvency arrangement accounts and to obtain returned paid cheques and copies of bank drafts in relation to these accounts.
If you have more questions about the Solicitors Accounts Regulations 2014 do not hesitate to contact Ormsby & Rhodes and our specialists will advise you accordingly.