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GAZETTE
JULY 1994
• Every solicitor must preserve the
accounting records kept under the
Solicitors Accounts Regulations for
at least 10 years from the date of the
last entry, (Regulation 20).
• Where a solicitor-trustee situation
exists (see Regulation 2.(1)) and
where money which is the subject of
such a trust is held, received, or
paid, the provisions of Part III of
the Regulations apply.
• Each partner of a firm of solicitors is
responsible for securing compliance
by the firm with the provisions of
the Solicitors Accounts Regulations,
(Regulation 32).
• Regulation 21 requires that every
solicitor to whom the Regulations
apply (see Regulation 35) shall
deliver to the Society within six
months of the accounting date in
each practice year an Accountants
Report in a prescribed format signed
by an accountant approved by the
Society.
Sanctions for non-compliance
Failure by a solicitor to comply with
the Solicitors Accounts Regulations
may result in a direction by the Law
Society to the Registrar of Solicitors
to refuse the issue of a practising
certificate. Furthermore, under the
terms of the Solicitors Act 1954 and
1960, contravention of the regulations
constitutes misconduct and may be the
subject of a report by the Society to
the Disciplinary Committee of the
High Court.
Monitoring and enforcement - the
role of the Compensation Fund
Committee
The Compensation Fund Committee
of the Society is responsible for
enforcing and monitoring compliance
with the Regulations. In addition to
reviewing annual Accountants Reports
submitted in respect of each practice,
the Committee also initiates
inspections of practices (both on a
routine random basis and on a targeted
basis) by the Society's in-house team
of investigating accountants. The
Committee has expressed concern
about the frequency with which a
number of unsatisfactory procedures
and occurrences have been the
subject of comment by accountants.
In particular, the Committee
would like to stress the following
matters.
Books of Account
• Books of Account should be
maintained on an up to date basis at
all times so as to reflect all dealings
with clients' money received held or
paid, (Regulation 10).
Party and party costs/solicitor
and
client costs
• Party and party costs and solicitor
and client costs represent clients'
monies to the extent that these costs
include payment for items of outlay
(such as stamp duty, counsel's fees,
doctor's or engineer's fees) which
have not already been paid out on
behalf of that client from the
office (bank) account
and
there
fore the funds received in respect of
the undischarged outlay
must
be lodged to a client (bank)
account.
Where a remittance received by a
solicitor includes payment for
solicitor's fees together with
undischarged outlay the
recommended treatment is to lodge
the entirety of the remittance intact
to the client (bank) account. Then,
from such monies received, a
payment for outlay - properly
incurred on behalf of the client -
may be made from the client (bank)
account to the appropriate payee by
means of a client account cheque.
Where a bill of costs or other written
intimation (under Regulation 7(a)(ii)
and (iv)) of the amount of the costs
incurred has been delivered to the
client - a transfer may be effected
from the client (bank) account to the
office (bank) account in respect of
the solicitor's fee and for outlay
which has been discharged
previously from the office (bank)
account on the client's behalf.
Where solicitor's fees are received
in advance of the performance of
the services to which they relate and
where it would be open to the client
to sue for recovery of them in the
event of the non-performance of the
relevant services, such money, when
received, should be treated as
client's money and it should be
lodged to, and retained in a client
(bank) account until the legal
services to which it relates have
been performed.
Settlement monies
• The relationship between solicitors
and client is a fiduciary one
requiring full disclosure.
Where settlement monies and/or
party and party costs are received by
the solicitor, the client should be
informed
in writing
of the amount
received. The client should also be
requested to acknowledge in
writing receipt of settlement monies
paid or handed over to him by the
solicitor.
Solicitor/client
fees
• Appendix E of the Law Society's
A
Guide to Professional Conduct of
Solicitors in Ireland
deals with
solicitor/client fees. The Guide
states, inter alia, ". . . When
preparing a solicitor and client bill
or furnishing an abbreviated form
thereof, the solicitor should include
the following details in the bill to
the client:
(a) particulars of the work done; (b)
the professional fee charged; (c) the
disbursements; (d) the VAT charged
and the rate; (e) credits for
payments received by way of party
and party charges; and ( f ) a
statement of the client's right to
seek taxation
thereof."
Balancing and
reconciliation
• Six monthly balancing and
reconciliation statements
(Regulation 10.(3)) should be
prepared
twice yearly
on the
practice's Reporting Dates (as
defined in Regulation 2.(1)). Indeed,
over and above this minimum legal
requirement, it is good practice to
complete this exercise quarterly, or
even monthly, so that any errors can
be identified and rectified on a
timely basis.
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