Legal Profession (Solicitors’ Accounts) Rules

Legal Profession Act

(Chapter 161, Section 72(1))

R 8

REVISED EDITION 1999

(1st January 1999)

[8th August 1985]

Citation

1. These Rules may be cited as the Legal Profession (Solicitors’ Accounts) Rules.

Definitions

2.—(1) In these Rules, unless the context otherwise requires —

“approved finance company” means any finance company registered under the Finance Companies Act (Cap. 108) which is approved by the Minister to accept deposits of client’s money for the purposes of these Rules;

“bank” has the same meaning as in the Banking Act (Cap. 19);

“bank pass book” and “bank statement” mean, respectively, a pass book and a statement issued by a bank in respect of any client account maintained at such bank, and includes a pass book and a statement issued by an approved finance company in respect of a client account maintained at such finance company;

“client” means any person on whose account a solicitor holds or receives client’s money;

“client account” means —

(a)	a current or deposit account maintained in the name of a solicitor at a bank; or
(b)	a deposit account maintained in the name of a solicitor with an approved finance company,

in the title of which account the word “client” appears;

“client’s money” means money held or received by a solicitor on account of a person for whom he is acting in relation to the holding or receipt of such money either as a solicitor, or in connection with his practice as a solicitor, agent, bailee, stakeholder or in any other capacity, but does not include —

(a)	money held or received on account of the trustees of a trust of which the solicitor is solicitor-trustee; or
(b)	money to which the only person entitled is the solicitor himself or, in the case of a firm of solicitors, one or more of the partners in the firm;

“solicitor” means an advocate and solicitor of the Supreme Court and includes a firm of solicitors, a law corporation and a Joint Law Venture;

“solicitor-trustee” means a solicitor who is the sole trustee or co-trustee only with one or more of his partners or employees;

“trust money” means money held or received by a solicitor which is not client’s money and which is subject to a trust of which the solicitor is a trustee whether or not he is the solicitor-trustee of such trust.

(2) In these Rules, the references to accounts, books, ledgers, journals and records shall include loose-leaf books and such cards or other permanent documents or records as are necessary for the operation of any system of book-keeping, computerised, mechanical or otherwise.

Client accounts

3.—(1) Subject to rule 9, every solicitor who holds or receives client’s money, or money which under rule 4 he is permitted and elects to pay into a client account, shall without delay pay such money into a client account.

(2) Any solicitor may keep one client account or as many such accounts as he thinks fit.

Moneys to be paid into client account

4. There may be paid into a client account —

(a)	trust money;
(b)	such money belonging to the solicitor as may be necessary for the purpose of opening or maintaining the account;
(c)	money to replace any sum which for any reason may have been drawn from the account in contravention of rule 8(2); and
(d)	money received by the solicitor, which under rule 5 he is entitled to split but which he does not split.

Splitting of moneys

5. Where a solicitor holds or receives money which includes client’s money or trust money of one or more trust —

(a)	he may where practicable split such money and, if he does so, he shall deal with each part thereof as if he had received a separate sum of money in respect of that part; or
(b)	if he does not split the money, he shall, if any part thereof consists of client’s money, and may, in any other case, pay the money into a client account.

No money other than money under rules 3, 4 and 5 to be paid into client account

6.—(1) No money, other than money under rules 3, 4 and 5 which a solicitor is required or permitted to pay into a client account, shall be paid into a client account.

(2) It shall be the duty of a solicitor into whose client account any money has been paid in contravention of this rule to withdraw the money without the delay on discovery.

Moneys which may be drawn from client account

7.—(1) There may be drawn from a client account —

(a)

in the case of client’s money —

(i)	money properly required for a payment to or on behalf of the client;
(ii)	money properly required in full or partial reimbursement of money expended by the solicitor on behalf of the client;
(iii)	money drawn on the client’s authority;
(iv)	money properly required for or towards payment of the solicitor’s costs where a bill of costs or other written intimation of the amount of the costs incurred has been delivered to the client and the client has been notified that money held for him will be applied towards or in satisfaction of such costs; and
(v)	money to be transferred to another client account;

(b)

in the case of trust money —

(i)	money properly required for a payment in the execution of the particular trust; and
(ii)	money to be transferred to a separate bank account kept solely for the money of the particular trust;

(c)

such money, not being money to which sub-paragraph (a) or (b) applies, as may have been paid into the account under rule 4(b) or 5(b); and

(d)

money which for any reason may have been paid into the account in contravention of rule 6.

(2) In the case of client’s money and trust money referred to in paragraph (1)(a) and (b), the money so drawn shall not exceed the total of the money held for the time being in the client account on account of the client or trust.

Money from client account — how drawn

8.—(1) Except as provided under rule 7, no money shall be drawn from a client account unless the Council upon an application made to it by the solicitor specifically authorises in writing such withdrawal.

(2) No money shall be drawn from a client account under rule 7(1)(a)(ii) or (iv), (c) or (d) except by —

(a)	a cheque drawn in favour of the solicitor; or
(b)	a transfer to a bank account in the name of the solicitor not being a client account.

(3) No money shall be drawn from a client account under rule 7(1)(c) or (d) by a cash cheque.

Where solicitor under no obligation to pay client’s money into client account

9.—(1) Notwithstanding the provisions of these Rules, a solicitor shall not be under obligation to pay into a client account client’s money held or received by him —

(a)	in the form of cash, and is without delay paid in cash in the ordinary course of business to the client or on his behalf to a third party;
(b)	in the form of a cheque or draft which is endorsed over in the ordinary course of business to the client or on his behalf to a third party and is not passed by the solicitor through a bank account or an account with an approved finance company account; or
(c)	which he pays into a separate bank account or into a separate account with an approved finance company opened or to be opened in the name of the client or of some person designated by the client in writing.

(2) Notwithstanding the provisions of these Rules, a solicitor shall not pay into a client account, money held or received by him —

(a)

which the client for his own convenience requests the solicitor in writing to withhold from such account;

(b)

for or towards payment of a debt due to the solicitor from the client or in reimbursement of money expended by the solicitor on behalf of the client; or

(c)

which is expressly paid to him —

(i)	on account of costs incurred, in respect of which a bill of costs or other written intimation of the amount of the costs has been delivered for payment; or
(ii)	as an agreed fee (or on account of an agreed fee) for business undertaken or to be undertaken.

(3) Where money includes client’s money as well as money of the nature described in paragraph (2), that money shall be dealt with in accordance with rule 5.

(4) Notwithstanding the provisions of these Rules, the Council may upon an application made to it by a solicitor specifically authorise him in writing to withhold any client’s money from a client account.

Transfers between accounts

10. No sum shall be transferred from the ledger account of one client to that of another, except in circumstances in which it would have been permissable under these Rules to have withdrawn from the client account the sum transferred from the first client and to have paid into the client account the sum so transferred to the second client.

Cash books, ledgers, journals, etc.

11.—(1) Every solicitor shall at all times keep properly written up in the English language such cash books, ledgers and journals and such other books and accounts as may be necessary —

(a)

to show all his dealings with —

(i)	client’s money received, held or paid by him; and
(ii)	any other money dealt with by him through a client account;

(b)

to show separately in respect of each client all money of the categories specified in sub-paragraph (a) which is received, held or paid by him on account of that client; and

(c)

to distinguish all money of the categories mentioned in sub-paragraph (b) received, held or paid by him, from any other money received, held or paid by him.

(2) All dealings referred to in paragraph (1)(a) shall be recorded as may be appropriate —

(a)	in a client’s cash book or a client’s column of a cash book; or
(b)	in a record of sums transferred from the ledger account of one client to that of another,

and in addition —

(i)	in a client’s ledger or a client’s column of a ledger; and
(ii)	in a journal.

(2A) No other dealings shall be recorded in such client’s cash book and ledger mentioned in paragraph (2) or, as the case may be, in such client’s columns and journal.

(2B) All dealings of the solicitor relating to his practice as solicitor other than those referred to in paragraph (1)(a) shall, subject to compliance with the Legal Profession (Solicitors’ Trust Accounts) Rules (R 9), be recorded in such other cash book and ledger or such other columns of a cash book and ledger and such journal as the solicitor may choose to maintain.

(3) In addition to the books and accounts referred to in paragraphs (2) and (2B), every solicitor shall keep a record of all bills of costs (distinguishing between profit costs and disbursements) and of all written intimations under rules 7(1)(a)(iv) and 9(2)(c)(i) delivered or made by the solicitor to his clients, which record shall be contained in a bills delivered book or a file of copies of such bills and intimations.

(4) Every solicitor shall within 3 months of his commencing practice on his own account (either alone or in partnership) and thereafter not less than once in every succeeding period of 3 months cause the balance of his clients’ cash books (or clients’ column of his cash book) to be reconciled with his clients’ bank statements and shall keep in the cash book or other appropriate place a statement showing the reconciliation.

(5) No solicitor shall make use of any computerised system of book-keeping for the purpose of this rule unless any information which is recorded on such computerised system is capable of being reproduced in the form of a printed document within a reasonable time.

(6) Every solicitor shall preserve for a period of at least 6 years from the date of the last entry therein —

(a)	all accounts, books, ledgers and records kept by him under this rule; and
(b)	all bank statements received by him in respect of any client’s account.

(7) Unless authorised in writing by the Council, no money may be withdrawn from a bank account or a deposit account with an approved finance company, being or forming part of a client account, otherwise than under the signature of a solicitor who holds a current practising certificate.

Power of Council to require production of books of account, etc.

12.—(1) In order to ascertain whether these Rules have been complied with, the Council acting —

(a)	on its own motion; or
(b)	on a written complaint lodged with it by a third party,

may require any solicitor to produce at a time and place to be fixed by the Council, his books of account, bank pass books, loose-leaf bank statements, statements of account, vouchers and any other necessary documents for the inspection of any person appointed by the Council and to supply to that person any necessary information and explanations and that person shall prepare for the information of the Council a report on the result of such inspection.

(2) Such report may be used as a basis for proceedings under the Act.

(3) Upon being required to do so, a solicitor shall produce such books of account, bank pass books, loose-leaf bank statements, statements of account, vouchers and documents at the time and place fixed.

(4) Before making any appointment under paragraph (1), the Council shall consider any objection made by any such solicitor to the appointment of a particular person on personal or other proper grounds.

(5) Before instituting an inspection on a written complaint lodged with it by a third party, the Council —

(a)	shall require prima facie evidence that a ground of complaint exists; and
(b)	may require the payment by that party to the Council of a reasonable sum to be fixed by it to cover the costs of the inspection, and the costs of the solicitor against whom the complaint is made.

(6) The Council may deal with any sum so paid in such manner as it thinks fit.

Intimation of costs incurred

13. A written intimation of the amount of a solicitor’s costs incurred and a notification to a client that money held for him will be applied as mentioned in rule 7(1)(a)(iv) may be delivered to a client in the same manner as a bill of costs is required to be delivered under section 118 of the Act.

Requirements of Council — how made

14. Every requirement to be made by the Council of a solicitor under these Rules —

(a)	shall be made in writing under the hand of the Director or a member of the Council designated by the Council for the purpose; and
(b)	may be served on the solicitor by sending the document by registered post to his usual or last known address.

Saving

15. Nothing in these Rules shall deprive a solicitor of any recourse or right, whether by way of lien, set-off, counter-claim, charge or otherwise, against moneys standing to the credit of a client account.

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