Legal Profession Act
(Chapter 161, Section 72(1))
Legal Profession (Solicitors’ Accounts) Rules
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 —
“accounting corporation”, “accounting firm” and “accounting LLP” have the same meaning respectively, as in the Accountants Act (Cap. 2);
[S 660/2006 wef 01/01/2007]
“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;
“public accountant” has the same meaning as in the Accountants Act 2004;
[S 109/2004 wef 01/04/2004]
“Public Accountants Oversight Committee” means the Public Accountants Oversight Committee appointed under section 4 of the Accountants Act 2004;
[S 109/2004 wef 01/04/2004]
“solicitor” means an advocate and solicitor of the Supreme Court and includes a firm of solicitors, a limited liability law partnership, 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.
(4)  No money shall be drawn from a client account by a cash cheque except with the written authority of the client.
[S 109/2004 wef 01/04/2004]
(5)  Unless the solicitor has engaged or employed a book-keeper for the purposes of rule 11(8), no sum exceeding $5,000 shall be drawn from a client account except upon a cheque (or other instruction effecting the withdrawal) signed by 2 solicitors.
[S 109/2004 wef 01/04/2004]
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 one month of his commencing practice on his own account (either alone or in partnership) and thereafter not less than once in every succeeding month 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.
(8)  Subject to rule 11A, a solicitor may engage or employ a book-keeper to keep his books and accounts properly written up and reconciled as required by this rule.
[S 109/2004 wef 01/04/2004]
[S 207/2007 wef 15/07/2007]
Engagement of book-keeper
11A.—(1)  A solicitor shall not engage or employ a book-keeper for the purposes of rule 11(8) unless he has obtained the written approval of the Council to do so.
(2)  An application for the approval of the Council to engage or employ a book-keeper for the purposes of rule 11(8) shall be submitted to the Council in such form as the Council may require and shall be accompanied by a statutory declaration affirmed or sworn —
(a)if the proposed book-keeper is an accounting firm, by the sole proprietor or managing partner (as the case may be) of the accounting firm —
(i)stating that no proprietor or partner of the accounting firm, as the case may be, is an immediate family member of the solicitor;
(ii)undertaking that he will inform the Council in writing immediately if the book-keeper encounters any of the difficulties referred to in paragraph (8); and
(iii)undertaking that he will inform the Council in writing immediately if there are any changes in the matters referred to in sub-paragraph (i);
(b)if the proposed book-keeper is an accounting corporation, by the managing director of the accounting corporation —
(i)stating that no director or member of the accounting corporation is an immediate family member of the solicitor;
(ii)undertaking that he will inform the Council in writing immediately if the book-keeper encounters any of the difficulties referred to in paragraph (8); and
(iii)undertaking that he will inform the Council in writing immediately if there are any changes in the matters referred to in sub-paragraph (i);
(ba)if the proposed book-keeper is an accounting LLP, by the manager of the accounting LLP —
(i)stating that no partner or manager of the accounting LLP is an immediate family member of the solicitor;
(ii)undertaking that he will inform the Council in writing immediately if the book-keeper encounters any of the difficulties referred to in paragraph (8); and
(iii)undertaking that he will inform the Council in writing immediately if there are any changes in the matters referred to in sub-paragraph (i);
[S 660/2006 wef 01/01/2007]
(c)if the proposed book-keeper is a firm or body corporate providing book-keeping services (other than an accounting firm , accounting corporation or accounting LLP), by the sole proprietor, managing partner or managing director of the firm or body corporate (as the case may be) —
(i)stating that no relevant person is an immediate family member of the solicitor;
(ii)undertaking that he will inform the Council in writing immediately if the book-keeper encounters any of the difficulties referred to in paragraph (8);
(iii)stating the professional qualifications of persons who will provide book-keeping services to the solicitor on behalf of the firm or body corporate and any relevant experience they may have in preparing accounts for a solicitor; and
(iv)undertaking that he will inform the Council in writing immediately if there are any changes in the matters referred to in sub-paragraph (i) or (iii); or
(d)if the proposed book-keeper is an individual, by the book-keeper —
(i)stating that he is not an immediate family member of the solicitor;
(ii)undertaking that he will inform the Council in writing immediately if he encounters any of the difficulties referred to in paragraph (8);
(iii)stating his professional qualifications and, if he is not a public accountant, any relevant experience he may have in preparing accounts for a solicitor; and
(iv)undertaking that he will inform the Council in writing immediately if there are any changes in the matters referred to in sub-paragraph (i) or (iii).
(3)  The Council may, in its discretion, refuse to grant its approval for a solicitor to engage or employ a book-keeper for the purposes of rule 11(8) if —
(a)the book-keeper or any person who will provide book-keeping services to the solicitor on behalf of the book-keeper does not, in the opinion of the Council, possess the requisite professional qualifications or relevant experience to carry out his duties;
(b)the book-keeper or (if the proposed book-keeper is a firm or body corporate) any relevant person is an immediate family member of the solicitor;
(c)the Council is of the view that the book-keeper or (if the proposed book-keeper is a firm or body corporate) any relevant person is unlikely to act independently of the solicitor; or
(d)a notice of disqualification under paragraph (4) or rule 3(2) of the Legal Profession (Accountant’s Report) Rules (R 10) has been issued in respect of the proposed book-keeper or (if the proposed book-keeper is a firm or body corporate) any relevant person.
(4)  Where —
(a)the Public Accountants Oversight Committee has made a disciplinary order against a public accountant under section 52(2) of the Accountants Act 2004 (Act 4 of 2004) (or an equivalent provision under the repealed Accountants Act (Cap. 2)) or against an accounting corporation or accounting firm or accounting LLP under section 53(2) of the Accountants Act 2004 (or an equivalent provision under the repealed Accountants Act);
(b)the Council is satisfied that a solicitor has not complied with these Rules and a book-keeper engaged by the solicitor for the purposes of rule 11(8) has failed to inform the Law Society promptly of any difficulties referred to in paragraph (8); or
(c)the Council is satisfied that a book-keeper or any relevant person does not satisfy the minimum requirements as to qualifications, independence or experience required by the Council or any statutory declaration furnished to the Council under paragraph (2) was false in regard to any of those requirements,
the Council may, in its discretion, at any time notify the book-keeper that he is not qualified to be engaged or employed as a book-keeper for the purposes of rule 11(8).
(5)  The Council may give notice, of the fact that a book-keeper is not qualified to be engaged as a book-keeper for the purposes of rule 11(8), to any solicitor who appears to the Council to be likely to engage or employ that book-keeper for the purposes of rule 11(8) or for the purpose of giving an accountant’s report under the Legal Profession (Accountant’s Report) Rules (R 10).
(6)  After a book-keeper has been notified that he is not qualified to be engaged as a book-keeper for the purposes of rule 11(8) and until such notice of disqualification has been withdrawn by the Council, he shall not —
(a)be engaged or employed as a book-keeper for the purposes of rule 11(8); and
(b)be qualified to give an accountant’s report under the Legal Profession (Accountant’s Report) Rules (R 10).
(7)  In coming to its decision, the Council shall (if the decision is based on any matter referred to in paragraph (4)(a)) take into consideration any observation or explanation made or given by the book-keeper or on his behalf by the Public Accountants Oversight Committee.
(8)  Subject to paragraph (9), the difficulties which a book-keeper shall be required to undertake to inform the Council under paragraph (2)(a)(ii), (b)(ii), (ba) (ii), ( c) (ii) and (d) (ii) are as follows:
(a)the book-keeper is unable to reconcile the balance in the client’s cash book (or client’s column in the cash book) with the client’s account bank statements in any month;
(b)the book-keeper is unable to properly write up the books and accounts as required by rule 11; or
(c)the solicitor fails to respond to such query from the book-keeper as is necessary to enable the book-keeper to carry out his duties referred to in sub-paragraph (a) or (b).
(9)  The difficulties referred to in paragraph (8) shall not include trivial breaches due to clerical errors or mistakes in book-keeping, that were rectified upon discovery and did not result in any loss to the client.
(10)  A book-keeper engaged or employed by a solicitor for the purposes of rule 11(8) shall submit to the Council annually a statutory declaration as described in paragraph (2) and the statutory declaration shall be submitted not later than 2 weeks after each anniversary of the date when the Council granted its written approval for the book-keeper to be so engaged or employed by the solicitor.
(11)  In this rule, “immediate family member”, in relation to a solicitor, means a spouse, a child, an adopted child, a step-child, a sibling or a parent of the solicitor or (if the solicitor is a partner or director of a law firm, a limited liability law partnership, a law corporation or a Joint Law Venture) of any partner or director of that law firm, limited liability law partnership, law corporation or Joint Law Venture (as the case may be).
(12)  In paragraphs (2)(c)(i), (3)(b), (c) or (d) or (4)(c), “relevant person” means, in relation to a firm or a body corporate providing book-keeping services to a solicitor, any proprietor, partner, director, member or employee of the firm or body corporate (as the case may be), or any person who will provide book-keeping services to the solicitor on behalf of the firm or body corporate.
(13)  Nothing in this rule shall deprive a solicitor of the right on the grounds of privilege as between solicitor and client to decline to produce to the book-keeper any document which the book-keeper may consider necessary for him to inspect for the purposes of carrying out his duties referred to in paragraph (8)(a) or (b).
(14)  Where the solicitor so declines, the book-keeper shall set out the circumstances and particulars of the difficulty encountered when he informs the Council of the difficulty.
[S 109/2004 wef 01/04/2004]
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.
Notice given by Council to book-keepers
14A.  Every notice to be given by the Council to a book-keeper under these Rules —
(a)  shall be in writing under the hand of the Director or a member of the Council designated by the Council for this purpose; and
(b)  if the book-keeper is an accountant, an accounting firm, an accounting corporation or an accounting LLP, may be served on the book-keeper by sending the notice by registered post to the address of the book-keeper provided to the Council in relation to an application under rule 11A or appearing in the Register of Public Accountants, Register of Accounting Firms or Register of Accounting Corporations (as the case may be) kept and maintained under the Accountants Act 2004 (Act 4 of 2004).
[S 109/2004 wef 01/04/2004]
[S 660/2006 wef 01/01/2007]
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.
Power to waive provisions
16.  The Council may, if it thinks fit in any particular case, waive any of the provisions of these Rules in writing, subject to such terms and conditions as the Council may impose.
[S 109/2004 wef 01/04/2004]