The Solicitors Accounts Regulations (SARs) have undergone significant updates, effective from 1 July 2023. These changes aim to enhance transparency, accountability, and safeguarding of client funds, thereby increasing the workload for solicitors and their accounting teams.
One of the key updates is the requirement for solicitors to prepare statements at a minimum three-monthly interval. This means that solicitors will need to prepare these statements every quarter, which could pose challenges for sole practitioners or those without a dedicated accounting team.
Another notable change is the reduction in the time frame for filing account reports. Previously, these reports were to be filed within six months of the accounting date. However, the new regulations have reduced this period to five months, which may cause difficulties for some firms and necessitate better planning.
The updated SARs also emphasise the importance of returning client monies promptly once the legal service is completed. This is a crucial step towards ensuring that client funds are not unnecessarily held in the client account. Furthermore, the regulations now require immediate action to clear old balances sitting on the ledger, emphasising the importance of timely disbursement of client monies.
In terms of electronic transfers, the updated SARs mandate the maintenance of a record of such transactions. This is part of maintaining proper books and records, and it doubles down on the need for transparency in handling client funds.
The new SARs also stipulate that the Law Society must be notified of a deficit that cannot be rectified within seven days of it coming to the solicitor's attention. This proactive approach aims to safeguard client funds by involving the Law Society early in the process.
Moreover, the updated regulations prohibit the transfer of small balances on old accounts to a registered charity without obtaining permission. This underlines the principle that even small amounts of client funds must be handled with due diligence and respect for the client's rights.
In conclusion, the updates to the SARs effective from 1 July 2023 brought about several changes aimed at enhancing the safeguarding of client funds, increasing transparency, and promoting accountability. These changes will require solicitors and their accounting teams to adapt their practices and procedures accordingly. It is essential for all involved parties to familiarise themselves with these updates to ensure compliance and maintain the highest standards of professional conduct.
If you require assistance or advice in relation to any of the above matters, please contact our team on 053 91 000 00 or email [email protected].
The contents of this article are meant as a guide only and are not a substitute for professional advice. The authors accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.
