The Law Society has recently launched its own consultation on the SRA Accounts Rules, in a bid to understand its members’ views on possible changes to the Rules.
It is not very clear how the new consultation fits in with the SRA’s planned consultation this Spring, if at all. However, this is the first time that we have seen any suggestion of what the Accounts Rules could look like from Spring 2017. More details are available here.
The Law Society has asked solicitors to state which of the following option(s) they favour most and least, with reasons:
Option A
Retain the current Accounts Rules.
Option B
Replace the existing rules with an approach based on the Overseas Accounts Rules. The discussion paper includes Option B draft rules, covering approximately one side of A4 paper. These are very principles-based, with no detail at all.
Option C
Simplify and shorten the existing Accounts Rules. Draft Option C rules are included in the discussion paper, and there are 24 rules running to three and a half pages. All of the current timescales have been removed (same or next working day, 14 days, five weeks, etc.), and there is no mention of client account reconciliations, other than a requirement to “establish and maintain proper accounting systems and records, and proper internal controls over those systems”.
Option D
Simplify and shorten the Accounts Rules (as in Option C) and remove the requirement for a separate client account. The key point here is that, under this option, practices would be able to hold client money in an office account, permanently, with no obligation to operate a client account at all. Again, draft rules have been provided, along the lines of the Option C rules, but with any reference to client account removed.
Option E
Adopt a de minimis approach: disapplying certain rules to firms which only use client accounts sparingly. The discussion paper does not suggest any rules that might be disapplied.
Option F
Additional option – the removal of rule 1.2, which places duties on COFAs. It is not clear what the Law Society are getting at here, but the discussion paper states that there is a duplication of the obligation currently on the COFA, as the same obligation already rests on the COLP, and therefore a separate onus on the COFA is unnecessary.
The discussion paper does not say whether the consultation is only open to solicitors, but references to members, solicitors and practitioners would seem to suggest that non-solicitors may not take part.