The Gazette 1994

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). 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. 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 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 The Compensation Fund Committee of the Society is responsible for • Regulation 21 requires that every solicitor to whom the Regulations Sanctions for non-compliance

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.

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. • 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. • 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." Solicitor/client fees Settlement monies

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). 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 Party and party costs/solicitor and

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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