A large commercial law firm will ditch its client account in favour of a third-party managed account by the end of the year, a leading payment processor has predicted.
The Solicitors Regulation Authority is planning a new definition of ‘client money’ which would exclude fees and disbursements. The move is part of its overhaul of the Solicitors Accounts Rules, which could also open the way for more solicitors to hold client money in third-party managed accounts.
Solicitors are being asked by the Law Society whether separate client accounts should be abolished, as part of a consultation on the accounts rules. The society is seeking views on six options in advance of a review by the Solicitors Regulation Authority this spring.
The Solicitors Disciplinary Tribunal has voiced “serious doubts” over whether a solicitor, aged 79 and “with almost 50 years of exemplary service”, should have been referred to it for prosecution. Reginald Hemmings told the tribunal he found the experience “extremely distressing”.
Practising solicitors should be allowed to deliver advice to the public from unregulated firms, subject to restrictions, the Solicitors Regulation Authority has suggested as part of a phased review of how it regulates both individuals and organisations.
A solicitor who lied to High Court and was found guilty of contempt – leading the now Lord Chief Justice to refer him to the Solicitors Regulation Authority – has been struck off by the Solicitors Disciplinary Tribunal.
Plans to offer solicitors the option of a “third-party managed accounts” instead of the traditional client account have divided opinions, with some criticising a lack of detail and questioning whether the move would reduce fraud.
The Solicitors Regulation Authority has delayed the introduction of the second phase of its reforms of the rules on submitting accountants’ reports from next month to November this year.
Giving reporting accountants more responsibility in identifying risks to client money will encourage law firms to play the “blame game”, the Solicitors Disciplinary Tribunal has warned.
Consumers of legal services do not all need the same level of protection and some of them, such as big corporations, might not need “any protection at all”, the SRA has said in a policy statement on its approach to regulation.