S.I. No. 516/2014 - Solicitors Accounts Regulations 2014

ARRANGEMENT OF REGULATIONS

PART I: Preliminary

1.

2.

3.

PART II: Client Account and Office Account

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

PART III (A):

Controlled Trusts

14.

15.

16.

17.

18.

19.

PART III (B):

Non-Controlled Trusts

20.

PART III (C):

Insolvency Arrangements

21.

22.

23.

24.

PART IV: Accounting Records

25.

PART V: Reporting Accountant’s Report

26.

27.

28.

29.

30.

31.

32.

33.

34.

PART VI: Investigation of Solicitors’ Practices

35.

36.

PART VII: General

37.

38.

39.

40.

FIRST SCHEDULE

Text of Section 66 of the Solicitors Act, 1954 (as substituted by Section 76 of the Solicitors (Amendment) Act, 1994 )

SECOND SCHEDULE

Reporting Accountant’s Report

S.I. No. 516 of 2014

SOLICITORS ACCOUNTS REGULATIONS 2014

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 21st November, 2014.

THE LAW SOCIETY OF IRELAND, in exercise of the powers conferred on them by sections 4 , 5 , 66 and 71 of the Solicitors Act, 1954 , (as substituted by section 76 of the Solicitors (Amendment) Act, 1994 and section 4 of the Solicitors (Amendment) Act, 2002 ) section 73 of the Solicitors (Amendment) Act 1994 and of every other power enabling them, and with the concurrence of the President of the High Court, HEREBY MAKE the following Regulations.

PART 1 PRELIMINARY

Citation, construction and commencement

• (2) Save as provided in clause (3) of this Regulation, these Regulations shall come into operation on the 1st day of December 2014 and thenceforth, subject to clause (3) of this Regulation, the Solicitors Accounts Regulations, 2001 to 2013 shall stand revoked.

• (3) The Solicitors Accounts Regulations, 2001 to 2013 shall remain in full force and effect in relation to a solicitor in respect of:

• (a) any accounting period in any practice year that has commenced before the 1st day of December 2014, until such time as the solicitor has duly complied with the provisions of Part V (Regulations 21 to 27, inclusive) as regards the furnishing to the Society of a reporting accountant’s report for any such accounting period or periods; and

• (b) any investigation of the solicitor, as provided for in Regulation 28 thereof, which commenced and has not been finally completed before the 1st day of December 2014; provided that where, in pursuance of such an investigation, further investigation is required after the 1st day of December 2014, the provisions of the Solicitors Accounts Regulations, 2014 shall apply to such further investigation.

Definitions

“accounting date” means the last date of his or her solicitors practice accounting period in each practice year which is selected by a solicitor and notified by him or her to the Society pursuant to Regulation 26(2);

“accounting period” means the period of one year ending on the accounting date, subject to the provisions of Regulations 26(2), 32 and 33;

“accounting records” means the books of account and all other documents required to be maintained and kept by a solicitor arising from his or her practice as a solicitor (including, where applicable, as a personal insolvency practitioner) in accordance with these Regulations, and in particular Regulation 25; and, for the avoidance of doubt, may include loose-leaf books, cards and such other forms of permanent documents of record as are appropriate for the operation of and the vouching of an efficient accounting system, whether written, mechanical or electronic;

“accounting statement” means a statement furnished to the Society pursuant to Regulation 36(1);

“Act” means the Solicitors Act, 1954 (No. 36 of 1954);

“Act of 1960” means the Solicitors (Amendment) Act, 1960 (No. 37 of 1960);

“Act of 1994” means the Solicitors (Amendment) Act, 1994 (No. 27 of 1994);

“Act of 2002” means the Solicitors (Amendment) Act, 2002 (No. 19 of 2002)

“Act of 2008” means the Civil Law (Miscellaneous Provisions) Act 2008 (No. 14 of 2008);

“Act of 2012” means the Personal Insolvency Act, 2012 (No. 44 of 2012);

“associated firms” means two or more firms of solicitors having one or more partners in common;

“authorised person” means a person authorised in writing by the Society for the purpose of exercising any of the Societys functions pursuant to section 66 (as substituted by section 76 of the Act of 1994) of the Act or these Regulations; and shall include any authorised representative or assistant of the authorised person;

“balancing date” means—

• (a) the date expiring six months after the commencement of the accounting period in each practice year; and

• (b) the accounting date at the end of the accounting period in each practice year;

“balancing statement” has the meaning assigned to it in Regulation 13(8)(a);

“bank” means—

• (a) a bank which is the holder of a licence under section 9 (1) of the Central Bank Act, 1971 ,

• (b) any financial institution referred to in subsection (4)(a)(ii) and (iii) of section 7 (as inserted by the Central Bank Act, 1989 ) of the Central Bank Act, 1971 , and

• (c) a bank or financial institution standing designated by order of the Minister for Justice, Equality and Law Reform under section 75(2) of the Act of 1994;

PROVIDED that such bank or financial institution, or the relevant branch thereof, is situate in the State;

“bill of costs” means a formal written intimation furnished by a solicitor to a client of the amount of professional fees and, where applicable, outlays payable by the client concerned to the solicitor in respect of the provision to such client, in the course of and arising from his or her practice as a solicitor, of legal services; and “interim bill of costs” shall be construed in accordance with Regulation 12(2);

“books of account” means that part of a solicitors accounting records as comprise the books of account required to be maintained by a solicitor pursuant to these Regulations;

“cheque” includes a transaction conducted electronically that is equivalent to a transaction by means of a cheque;

“client” includes the personal representative of a client and any person on whose behalf the person who gave or is giving instructions was or is acting in relation to any matter in which a solicitor or his or her firm had been or is instructed; and includes a beneficiary to an estate under a will, intestacy or trust and a debtor under an insolvency arrangement; and also includes any person on whose account a solicitor receives, holds, controls or pays clients moneys in the course of and arising from his practice as a solicitor;

“client account” means an account (whether a current bank account or a deposit bank account) opened and kept by a solicitor at a bank in his or her name designated for clients moneys, and in the title of which account the word “client” appears; provided that a reference in these Regulations to “a client account” or “the client account” or “client account” shall, unless the particular circumstances or the context (or both) otherwise require or requires, refer to the totality of client accounts opened and kept by the solicitor;

“client ledger account” means that part of the books of account of a solicitor which, in accordance with Regulation 25(1)(b), records in respect of each client matter, the financial transactions conducted by the solicitor with or on behalf of his or her client, on client account;

“clients’ moneys” means moneys received, held or controlled by a solicitor arising from his or her practice as a solicitor for or on account of a client or clients, whether the moneys are received, held or controlled by him or her as agent, bailee, stakeholder, trustee or in any other capacity, including moneys received by the solicitor on account of outlays not yet discharged; provided that “clients moneys” shall not include—

• (i) moneys received, held or controlled by a solicitor in respect of which he or she is a controlling trustee or a non-controlling trustee, or

• (ii) moneys 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, or

• (iii) moneys placed on joint deposit account or joint deposit receipt other than where the payees are all solicitors practising in the same solicitors practice, or

(iv)(save as provided for under Regulation 8(2)(a) and 8(3)(b) and without prejudice to the generality of the liability of a solicitor pursuant to the provisions of section 73 of the Act of 1994 and regulations made thereunder) interest received by a solicitor on clients moneys held by the solicitor on account of his or her clients generally on an interest-bearing “general client account” as defined in Regulation 8(1); or

• (v) moneys received, held or controlled by a personal insolvency practitioner in accordance with an insolvency arrangement;

“compliance partner” means a solicitor who is a partner in a solicitors practice which is a partnership of solicitors who is nominated from time to time by the members of the partnership and notified in writing to the Society as the partner responsible for completing and signing on behalf of all the partners the Form of Acknowledgement in respect of each reporting accountant’s report furnished to the Society in relation to the solicitors practice pursuant to these Regulations;

“controlled trust” means a trust or an administration of an estate of which a solicitor is a controlling trustee;

“controlling trustee” means a solicitor who is a sole trustee of a trust or a sole executor or administrator of an estate or who is a co-trustee or co-executor or co-administrator only with his or her partner or employee, or with more than one of such persons;

“controlled trust account” means an account (whether a current bank account or a deposit bank account) opened and kept by a controlling trustee at a bank in his or her name solely for moneys subject to a particular controlled trust, and in the title of which account the word “trustee” or “executor” or “administrator” appears or which is otherwise clearly designated as a trust account; provided that a reference in these Regulations to “a controlled trust account” or “the controlled trust account” or “controlled trust account” shall, unless the particular circumstances or the context (or both) otherwise require or requires, refer to the totality of controlled trust accounts opened and kept by the controlling trustee;

“controlled trust ledger account” means that part of the books of account of a solicitor which, in accordance with Regulation 25(1)(b), records in respect of each controlled trust matter of which he or she is a controlling trustee, the financial transactions conducted by the solicitor with or on behalf of the controlled trust, on controlled trust account;

“controlled trust moneys” means moneys received, held or controlled by a controlling trustee which are subject to a controlled trust of which the controlling trustee is a controlling trustee;

“Council” means the Council of the Society;

“debt settlement arrangement” has the meaning given in the Act of 2012

“debtor” means, in relation to an insolvency arrangement, the debtor who has entered into that insolvency arrangement;

“deposit account” means a deposit account or a savings account or a deposit receipt account maintained in the name of a solicitor or his or her firm at a bank and designated as a client account or a controlled trust account or a non-controlled trust account or an insolvency arrangement account of that solicitor or his or her firm;

“documents” includes deeds, wills, papers, books of account, records, vouchers, correspondence and files and shall be construed to include any documents stored in an electronic or other non-written form or on film or otherwise;

“draft” means a bank draft and includes a transaction conducted electronically that is equivalent to a transaction by means of a draft;

“employed solicitor” means a solicitor who is employed by another solicitor or by any other person or body and who is not engaged in the provision of legal services whether as a sole practitioner or as a partner in a firm of solicitors and who does not, in the course of his or her practice as a solicitor, handle or in any way deal with clients moneys or controlled trust moneys or non-controlled trust moneys or insolvency arrangement moneys or other moneys other than for and on behalf of his or her employer;

“form of acknowledgement” means the form of acknowledgement to be completed and signed by a sole practitioner or a compliance partner pursuant to Regulation 27;

“insolvency arrangement” means a debt settlement arrangement or a personal insolvency arrangement;

“insolvency arrangement account” means an account (whether a current bank account or a deposit bank account) opened and kept by a personal insolvency practitioner at a bank, which account is used solely for the purposes of receiving payments from or on behalf of a debtor and transmitting such payments to creditors (after the deduction of any fees, costs and outlays payable to the personal insolvency practitioner permitted to be made under the Act of 2012, regulations made thereunder, these Regulations and the insolvency arrangement) and in the title of which account the words “insolvency arrangement” appears or which is otherwise clearly designated as an insolvency arrangement account; provided that a reference in these Regulations to “an insolvency arrangement account” or “the insolvency arrangement account” or “insolvency arrangement account” shall, unless the particular circumstances or the context (or both) otherwise require or requires, refer to the totality of insolvency arrangement accounts opened and kept by the personal insolvency practitioner;

“insolvency arrangement ledger account” means that part of the books of account of a solicitor which, in accordance with Regulation 25(1)(b), records in respect of each insolvency arrangement matter of which he or she is appointed personal insolvency practitioner, the financial transactions conducted by the solicitor with or on behalf of the insolvency arrangement, on insolvency arrangement account;

“insolvency arrangement moneys” means moneys received, held or controlled by a personal insolvency practitioner which are subject to an insolvency arrangement in respect of which he is appointed personal insolvency practitioner;

“interest” means, in relation to moneys received by a solicitor or his or her firm for or on account of a client, or a controlled trust. or a non-controlled trust or an insolvency arrangement, the amount of interest that would be earned if such moneys had been held as an individual amount in a deposit account of the solicitor’s choosing at the bank (or, if more than one bank, the principal bank) to the practice of the solicitor for a period commencing seven days after the receipt by the solicitor or his or her firm of such moneys and ending when the solicitor or his or her firm actually pays out such moneys to, or on behalf of, such client, or controlled trust, or non-controlled trust or insolvency arrangement;

“legal services” means services of a legal or financial nature provided by a solicitor arising from that solicitors practice as a solicitor, and includes any part of such services and, for the avoidance of doubt, includes any investment business services provided by a solicitor who is not an authorised investment business firm; and “investment business services” and “authorised investment business firm” have the meanings respectively assigned to them in section 2 of the Investor Compensation Act, 1998 ;

“matter” means:

— a separate matter in respect of which a solicitor provides legal services to a client;

— a separate matter relating to a controlled trust, of which a solicitor is a controlling trustee;

— a separate matter, relating to a non-controlled trust of which a solicitor is a non-controlling trustee; or

— a separate matter relating to an insolvency arrangement in respect of which a solicitor is appointed a personal insolvency practitioner;

“moneys” includes moneys in a currency other than that of the State, cheques, bank notes, postal orders, money orders or any form of negotiable or non-negotiable instrument, moneys deposited or otherwise credited to a bank account or moneys deposited or otherwise credited to a bank or other financial institution outside the State;

“non-controlled trust” means a trust or an administration of an estate of which a solicitor is a non-controlling trustee;

“non-controlled trust account” means an account (whether a current bank account or a deposit bank account) opened and kept by a non-controlling trustee at a bank in the names of each of the trustees of the non-controlled trust or each of the executors or administrators (as the case may be) and in the title of which account the word “trustee” or “executor” or “administrator” appears or which is otherwise clearly designated as a non-controlled trust account; provided that a reference in these Regulations to “a non-controlled trust account” or “the non-controlled trust account” or “non-controlled trust account” shall, unless the particular circumstances or the context (or both) otherwise require or requires, refer to the totality of non-controlled trust accounts opened and kept by the non-controlling trustee;

“non-controlled trust ledger account” means that part of the books of account of a solicitor which, in accordance with Regulation 25(1)(b), records in respect of each non-controlled trust matter of which he or she is a non-controlling trustee, the financial transactions conducted by the solicitor with or on behalf of the non-controlled trust, on non-controlled trust account;

“non-controlled trust moneys” means moneys received, held or controlled by a non-controlling trustee which are subject to a non-controlled trust of which the non-controlling trustee is a non-controlling trustee;

“non-controlling trustee” means a solicitor who is a co-trustee of a trust or a co-executor or co-administrator of an estate with one or more other persons who is or are not a partner or employee of the solicitor;

“office account” means an account (whether a current bank account or a deposit bank account) opened and kept by a solicitor at a bank in his or her name through which moneys belonging to the solicitor are transacted in the course of and arising from his or her practice as a solicitor including acting as a Personal Insolvency Practitioner; provided that a reference in these Regulations to “an office account” or “the office account” or “office account” shall, unless the particular circumstances or the context (or both) otherwise require or requires, refer to the totality of office accounts opened and kept by the solicitor;

“office balancing statement” has the meaning assigned to it in Regulation 13(9);

“office ledger account” means that part of the books of account of a solicitor which, in accordance with Regulation 25(1)(b), records in respect of each matter the financial transactions conducted by the solicitor on office account;

“office side of the client ledger account” refers to the record of financial transactions conducted by a solicitor in respect of each matter on office account and for the avoidance of doubt, reference to the “office side of the client ledger account” incorporates, where appropriate, office side of the controlled trust ledger account, office side of the non-controlled trust ledger account and office side of the insolvency arrangement ledger account;

“outlays” means disbursements made or to be made or expenses incurred or to be incurred by a solicitor for and on behalf of a client in respect of the provision to that client of legal services;

“personal insolvency arrangement” has the meaning given in the Act of 2012;

“personal insolvency practitioner” means a solicitor who is authorised in accordance with the Act of 2012 to carry on the practice of a personal insolvency practitioner;

“practice year” means any year ending on the 31st December;

“professional fees” means fees (not including outlays) charged by a solicitor to a client in a bill of costs furnished to that client and payable to the solicitor in respect of legal services which have been provided to the client; and includes fees represented by moneys actually held by the solicitor in client account to the credit of the client concerned;

“Registrar” means the holder of the office of Registrar of Solicitors appointed by the Society pursuant to section 8 of the Act;

“Regulation” means a regulation in these Regulations;

“reporting accountant” has the meaning assigned to it in Regulation 26(4);

“reporting accountants report” has the meaning assigned to it in Regulation 26(1);

“Society” means the Law Society of Ireland and, as appropriate, includes the Council or a committee appointed by the Council or a member of the Council or an employee or agent of the Society;

“sole practitioner” means a solicitor who is practising as a sole principal in a solicitors practice;

“solicitor” means a person who has been admitted as a solicitor and whose name is on the roll of solicitors and who practises on his own account either as a sole practitioner or as a solicitor in partnership with other solicitors; and a reference to a solicitor includes a reference to a firm of solicitors unless the context otherwise requires and includes a former solicitor or a deceased solicitor unless the context otherwise requires;

“Solicitors Accounts Regulations, 2001 to 2013” means the Solicitors Accounts Regulations, 2001 to 2006 ( S.I. No. 421 of 2001 , S.I. No. 719 of 2005 and S.I. No. 111 of 2006 ), the Solicitors (Interest on Clients’ Moneys) Regulation 2004 ( S.I. No. 372 of 2004 ) and the Solicitors Accounts (Amendment) Regulations 2013 ( S.I. No. 494 of 2013 ).

“Solicitors Acts” means the Solicitors Acts, 1954 to 2008;

“solicitors practice” means a solicitors practice carried on either by a sole practitioner or by a partnership of solicitors comprising two or more partners.

• (2) Other words and phrases in these Regulations shall, where applicable, have the meanings assigned to them in the Acts.

• (3) The Interpretation Acts, 1937 to 1997 shall apply for the purposes of the interpretation of these Regulations as they apply for the purposes of the interpretation of an Act of the Oireachtas, except insofar as they may be inconsistent with the Solicitors Acts (or any other Act that amends or extends the Solicitors Acts) or with these Regulations.

• (4) For the purposes of section 31 of the Act of 1960, Part V (comprising Regulations 26 to 34, inclusive) of these Regulations shall be deemed to be “Accountants Certificate Regulations”.

• (5) Insofar as the provisions of these Regulations on the one hand and the provisions of the Act of 2012, and the Personal Insolvency Act 2012 (Accounts and Related Matters) Regulation 2013 ( S.I. No. 247 of 2013 ) on the other hand, relate to the same subject matter, the two sets of provisions shall, whenever possible, be treated as complementary, so that both sets of provisions shall be applicable and neither provision shall narrow the effect of the other; but in case of conflict the provisions of the Act of 2012 and the Personal Insolvency Act 2012 (Accounts and Related Matters) Regulation 2013 ( S.I. No. 247 of 2013 ) shall prevail.

Solicitors to whom these Regulations apply

• (2) Wherever in these Regulations an obligation is specified as being that of a solicitor, such obligation of the solicitor shall be a personal one notwithstanding that the solicitor may have caused some other person or persons to perform the act or function comprising such obligation; and it shall be assumed unless and until the contrary be shown to the satisfaction of the Society that such other person or persons had the express or implied authority of the solicitor to perform such act or function.

• (3) These Regulations shall not apply to—

• (a) a solicitor who is an employed solicitor during the entire of the practice year or years and the accounting period in question;

• (b) a solicitor in the full-time service of the State within the meaning of subsection (3) of section 54 (as substituted by section 62 of the Act of 1994) of the Act; and

• (c) a solicitor who is in the part-time service of the State, in respect of moneys received, held, controlled or paid by him or her in the course of such service.

• (4) A solicitor, to whom clause (3) of this Regulation has applied at the time of he or she making application to the Society for a practising certificate for a practice year, shall be required to notify the Society if at any time during that practice year he or she proposes to change to being a solicitor to whom clause (1) of this Regulation applies; such notification to the Society to be made not later than fourteen days prior to such change taking place.

• (5) Where the Society deem it appropriate in any particular circumstances, the Society may require a solicitor, who represents to the Society that he or she is a solicitor to whom these Regulations do not or should not apply, to verify such representation by means of a statutory declaration or in such other formal manner as the Society may direct; provided that the Society may, in addition, conduct their own investigation in order to confirm the veracity of any such representation.

PART II CLIENT ACCOUNT AND OFFICE ACCOUNT

General duty to pay clients moneys into client account

• (2) A solicitor who receives, holds or controls moneys in respect of outlays not yet disbursed shall, without delay, pay such moneys into client account and shall treat such moneys in all respects as clients moneys.

• (3) A solicitor may, in the course of and arising from his or her practice as a solicitor, open and keep in a bank or banks more than one client account as he or she thinks fit.

Where discretion to pay into client account

• (a) controlled trust moneys or non-controlled trust moneys;

• (b) moneys to replace moneys which for any reason have been withdrawn from the client account in contravention of Regulation 9(2);

• (c) moneys received by the solicitor which include an amount being paid to the solicitor by or on behalf of a client on account of outlays actually disbursed by the solicitor in the course of the provision of legal services to that client;

• (d) moneys which represent interest on clients moneys, as provided for in Regulation 8.

• (2) A solicitor shall not hold moneys to which the solicitor is beneficially entitled in a client account for longer than three months.

• (3) In clause (2) of this Regulation, “moneys to which the solicitor is beneficially entitled” means:

• (a) moneys held by the solicitor for—

• (i) professional fees in respect of all or part of the amount of which the solicitor is entitled, as provided for in Regulation 7(1)(a)(iii), to transfer from client account to office account, or

• (ii) outlays in respect of which the solicitor is entitled, as provided for in Regulation 7(1)(a)(ii), to withdraw from client account;

• (b) moneys held by the solicitor which, pursuant to Regulation 12, should be the subject-matter of a bill of costs furnished to the client concerned; or

• (c) moneys which are held in client account to the credit of a client matter which the solicitor is himself or herself beneficially entitled to share together with one or more clients, to the extent of the amount of the beneficial share of the solicitor.

• (4) For the avoidance of doubt, it shall be a breach of these Regulations for a solicitor to pay into or hold in a client account moneys other than clients moneys and moneys referred to in clause (1) or in clauses (2) and (3) of this Regulation.

Treatment of ‘mixed’ moneys and exceptions to requirement to lodge clients moneys to client account

• (2) Where a solicitor receives insolvency arrangement moneys co-mingled with other moneys, a solicitor shall not pay or lodge the insolvency arrangement moneys into an account other than an insolvency arrangement account. For the avoidance of doubt, it shall be a breach of these Regulations for insolvency arrangement moneys to be co-mingled with those of the personal insolvency practitioner or with those of any other person.

• (3) Without prejudice to the generality of Regulation 4(1), a solicitor shall not be required to pay into client account such clients moneys received by him or her which he or she pays into a separate bank account in the name of the client or (where so instructed by the client in writing) of some other person.

• (4) Without prejudice to the generality of Regulation 4(1), a solicitor (hereinafter in this clause referred to as “the purchasers solicitor”) who, when acting for a purchaser of property, receives a cheque or draft from or on behalf of his or her client or from a lender to his or her client which is drawn in favour of the purchasers solicitor or is drawn in favour of the client who endorses it either generally or specifically to the purchasers solicitor and where the proceeds of such cheque or draft are required to be paid, without delay, to the vendor (or the solicitor for the vendor) in respect of the balance (other than the deposit) of the purchase price of the property in question, the purchasers solicitor shall not be required to pay the proceeds of such cheque or draft into a client account; provided that the application of such proceeds for that purpose is apparent from the purchasers solicitors file maintained in relation to such client matter.

• (5) Without prejudice to the provisions of clauses (3) and (4) of this Regulation and for the avoidance of doubt, it shall be a breach of these Regulations—

• (a) for a solicitor, having received clients moneys, to fail, without reasonable cause, to pay such clients moneys into the appropriate client account (or client accounts); and

• (b) for a solicitor, having received clients moneys, to fail, without reasonable cause, to record such receipt in his or her accounting records.

• (6) The Society may, upon application by a solicitor, give directions in writing to the solicitor regarding the holding of clients moneys in an account other than a client account.

Withdrawals from client account

• (a) in the case of clients moneys—

• (i) moneys properly required for the payment to the client concerned or (in accordance with the instructions of the client concerned) to another person or other persons on behalf of the client;

• (ii) moneys properly required for or towards payment of an amount due to the solicitor by the client concerned in respect of outlays actually disbursed by the solicitor on behalf of that client in the course of the provision of legal services to the client; and

• (iii) moneys properly available to be applied by the solicitor in satisfaction (in whole or in part) of professional fees payable by the client concerned where it has been made clear to such client that clients moneys held by the solicitor for the client are being or will be applied by the solicitor in satisfaction (in whole or in part) of such professional fees; provided that such moneys shall be transferred in a timely manner from client account to office account; and

• (iv) moneys which are then transferred into another client account in accordance with the instructions of the client concerned.

• (b) in the case of controlled trust moneys or non-controlled trust moneys-

• (i) moneys properly required for a payment in the due execution of the controlled trust or non-controlled trust concerned; and

• (ii) moneys to be then transferred into a controlled trust account or a non-controlled trust account opened and maintained solely for the controlled trust moneys or the non-controlled trust moneys of the controlled trust or non-controlled trust concerned.

• (c) moneys which for any reason have been paid into the client account by mistake or otherwise in contravention of these Regulations.

PROVIDED that, in any case arising under subclause (a) or (b) of this clause, the moneys so withdrawn shall not exceed the total of the moneys held for the time being in client account on behalf of the client concerned or the controlled trust or non-controlled trust concerned.

• (2) For the avoidance of doubt, it shall be a breach of these Regulations—

• (a) for a debit balance to arise on any client ledger account, other than a debit balance which is totally offset by a credit balance arising on another client ledger account in respect of the same client; and

• (b) for a solicitor to discharge personal or office expenditure from client account.

• (3) In clause (1)(a)(iii) of this Regulation and in Regulations 11, 12 and 23, “in a timely manner” means within a period not exceeding three months after the date on which the solicitor concerned has furnished to the client concerned a bill of costs (or an interim bill of costs as the case may be) specifying the amount of the professional fees payable by the client and in respect of which professional fees the solicitor may properly apply clients moneys of the client concerned in satisfaction (in whole or in part) thereof.

Interest

“dedicated account” means an account (whether a current account or deposit account) opened and kept by a solicitor at a bank in his or her name designated for client moneys, controlled trust moneys, non-controlled trust moneys or insolvency arrangement moneys received, held or controlled by him or her in respect of a specific client;.

“general client account” means an account (whether a current account or deposit account) opened and kept by a solicitor at a bank in his or her name designated for clients’ moneys, received, held or controlled by him or her in respect of more than one client.

• (2) A solicitor to whom these Regulations apply, shall, in respect of client moneys or controlled trust moneys or non-controlled trust moneys or insolvency arrangement moneys received by that solicitor for or on behalf of a client or a controlled trust or a non-controlled trust or an insolvency arrangement,

• (I) hold such moneys in an interest bearing account and account for interest thereon while so held; or

• (II) account for interest thereon.

Such obligation to account shall be discharged as follows:

• (a) where such moneys are held in a dedicated account which is an interest bearing account, by ensuring that all interest which accrues on such account is lodged to the credit of that account as additional, as the case may be client moneys, controlled trust moneys, non-controlled trust moneys or insolvency arrangement moneys held for or on behalf of that client or controlled trust or non-controlled trust or insolvency arrangement until such time as they are paid out of such account; and

• (b) in all other cases, by accounting for all interest, in excess of €100 (one hundred euro), which would have been earned on such moneys had they been held as an individual amount to the credit of an interest bearing dedicated account of the solicitors choosing at the bank(or if more than one bank, the principal bank) to the practice of the solicitor for the period commencing seven days after the receipt by the solicitor of such moneys and for so long thereafter as they are so held and, where appropriate, paying that interest concerned out of:

• (i) general client account up to but not exceeding the amount of interest at that time standing to the credit of the general client account; or

• (ii) office account; or

(iii)(immediately following a transfer of the amount due from office account to the general client account) the general client account.

• (3) A solicitor shall, within a period of three months or by the next accounting date (whichever is the later) after the date on which an amount of interest has been credited by the bank to an interest bearing general client account either:

• (a) transfer from the general client account to office account, the amount of such interest so credited, to the extent it has not already been paid out of general client account by the solicitor to an individual client or clients entitled to be paid interest, or treated as additional client moneys held by the solicitor, and designate such amount transferred as being interest earned on client account; or

• (b) credit to the appropriate client ledger account of the individual clients concerned the amount of interest due to those clients and, each such amount so credited to a client ledger account shall thereafter be treated by the solicitor as additional clients moneys held by the solicitor for that client.

• (4) For the avoidance of doubt, where a solicitor holds client moneys, controlled trust moneys, or insolvency arrangement moneys in a non interest bearing account the solicitor has the same obligation to account for interest on those moneys, as if held in an interest bearing account.

• (5) Where client moneys are received by a solicitor for or on behalf of a client, the client (without prejudice to any other legal remedy) may refer, any question relating to interest on such client money to the Law Society, and the Society (after providing reasonable opportunity to the client and to the solicitor to make submissions to the Society on such question) shall determine such question and shall duly notify the client and the solicitor in writing of such determination.

• (6) Nothing in this Regulation shall:

• (a) affect any arrangement in writing, whenever made, between a solicitor and a client as to the application of client moneys received by the solicitor or his or her firm for or on account of that client or interest thereon;

• (b) deprive a solicitor of any legal recourse or right, whether by way of lien, charge or otherwise, that the solicitor may have against client moneys of a client standing to the credit of a client account.

Manner of withdrawal from client account

• (2) A solicitor shall not withdraw moneys from a client account as provided for in Regulation 7(1)(a)(ii) or (iii) or Regulation 7(1)(c) other than by—

• (a) a cheque drawn on that client account in favour of the solicitor, the proceeds of which are then paid into the office account; or

• (b) a transfer from client account to office account.

(3)(a) Where a solicitor withdraws moneys from a client account by means of a cheque drawn on that client account, the payee details, to be recorded on the client account cheque and the cheque stub or requisition docket or other document of record in respect thereof maintained and kept by the solicitor, shall include the name of the payee or other person who is to be credited with such payment.

• (b) Where a solicitor withdraws moneys from a client account by means of a cheque drawn on that client account which is made payable to a bank in order to purchase a draft or other negotiable or non-negotiable instrument, the payee details, to be recorded on the client account cheque and the cheque stub or requisition docket or other document of record in respect thereof maintained and kept by the solicitor, shall include the name of the person shown as payee on such draft or other negotiable or non-negotiable instrument.

• (4) A solicitor shall not withdraw moneys from a client account, other than moneys permitted by and in accordance with Regulation 7, unless the Society, upon application by the solicitor, give directions in writing in respect of such other withdrawal.

Transfers between client ledger accounts

• (a) the solicitor shall maintain and keep in respect of each such transfer such accounting records and other documents as will enable such transaction to be appropriately vouched; and

• (b) the solicitor shall record each such transaction in his or her books of account in the manner provided for in Regulation 13.

Office account

• (2) A solicitor shall, without delay, pay all moneys received by him or her in respect of professional fees into client account or office account.

• (3) Where a solicitor pays moneys received by him or her in respect of professional fees into client account pursuant to clause (2) of this Regulation, the solicitor shall then transfer such moneys in a timely manner from client account to office account, as provided for in Regulation 7(1)(a)(iii)

• (4) A solicitor shall, without delay, record as a debit on the office side of the relevant clients ledger account the amount of professional fees in any bill of costs furnished to a client.

• (5) For the avoidance of doubt, it shall not be permissible under these Regulations for a credit balance to arise on the office side of a client ledger account; and, where such a credit balance does arise, it shall be a breach of these Regulations for the solicitor to fail, without delay, to correct the position as appropriate in the particular circumstances consequent on an investigation by him or her as to how such credit balance has arisen, including whether such credit balance has arisen as a result of:

• (a) a failure to comply with Regulation 4(2) by lodging moneys in respect of outlays not yet disbursed to office account instead of to client account; or

• (b) a failure to comply with clause (4) of this Regulation by not recording as a debit on the office side of the relevant client ledger account the amount of professional fees in a bill of costs furnished to a client and where the subsequent receipt (in whole or in part) of such amount from the client has been recorded as a credit on the office side of that client ledger account; or

• (c) the payment into office account of moneys received from a client in excess of an amount payable by that client for professional fees the subject of a bill of costs, the furnishing of which has been recorded as provided for in clause (5) of this Regulation; or

• (d) another accounting or posting error;

PROVIDED that it shall not be a breach of these Regulations for a credit balance to arise on the office side of a client ledger account where that credit balance is totally offset by a debit balance or balances arising on the office side of one or more other client ledger accounts in respect of the same client.

Duty to furnish bill of costs

• (2) Nothing in clause (1) of this Regulation shall prevent a solicitor from furnishing to a client an interim bill of costs for interim professional fees for legal services already provided in a client matter but where the client matter concerned has not yet been completed; provided that, where clients moneys held in client account on behalf of the client concerned are clients moneys which that client has designated as being in respect of such interim professional fees for legal services already provided by the solicitor, the solicitor shall be required to furnish to that client an interim bill of costs for the amount of such interim professional fees; and, thereafter, the provisions of Regulation 7(1)(a)(iii) shall apply to the transfer in a timely manner of such moneys from client account to office account.

• (3) For the avoidance of doubt, it shall be a breach of these Regulations for a solicitor to withdraw moneys from a client account, as provided for in Regulation 9(2), in respect of professional fees or interim professional fees or outlays not properly payable to the solicitor at the time of such withdrawal.

Books of account to be maintained by solicitor

• (2) Without prejudice to the generality of clause (1) of this Regulation, a solicitor shall maintain books of account:

• (a) which will show the true financial position in relation to the solicitors transactions with clients moneys and with other moneys transacted by him or her through client account as referred to in Regulation 5(1); and

• (b) which shall, in respect of each client, distinguish separately between, on the one hand, clients moneys and moneys as specified in subclause (a) of this clause and, on the other hand, any other moneys received, held, controlled or paid by him or her.

(3)(a) Without prejudice to the generality of clause (1) of this Regulation, a solicitor shall at all times maintain a separate client ledger account for each client matter dealt with where clients moneys are received, held, controlled or paid by the solicitor.

• (b) A solicitor shall, where applicable, maintain and keep on the relevant client matter file appropriate evidence of outlays disbursed out of moneys withdrawn from client account or disbursed out of moneys withdrawn from office account and recouped out of clients moneys withdrawn from client account.

• (4) Without prejudice to the generality of clause (1) of this Regulation, a solicitor shall record each of his or her transactions with clients moneys and with any other moneys transacted through client account as referred to in clause (2)(a) of this Regulation, as appropriate:

(a)(i) in a clients cash book, or

• (ii) in a journal, where the particular transaction involves the transfer from one client ledger account to another client ledger account, such journal record to include a narrative explaining each such transaction; and

• (b) in a client ledger.

• (5) Without prejudice to the generality of clause (1) of this Regulation and of Part III(A) (relating to controlled trusts) and Part III(B) (relating to non-controlled trusts) of these Regulations, a solicitor shall, as appropriate, record his or her transactions with controlled trust moneys or non-controlled trust moneys in the same way as is provided for in subclauses (a) and (b) of clause (4) of this Regulation in respect of clients moneys.

• (6) Without prejudice to the generality of clause (1) of this Regulation, and of Part III(C) (relating to insolvency arrangements) a personal insolvency practitioner shall, as appropriate, record his or her transactions with insolvency arrangement moneys in the same way as is provided for in subclauses (a) and (b) of clause (4) of this Regulation in respect of clients moneys.

• (7) Without prejudice to the generality of clause (1) of this Regulation, a solicitor shall record in his or her books of account each of his or her transactions on office account with moneys (other than clients moneys or moneys referred to in clause 2(a) of this Regulation and other than controlled trust moneys or non-controlled trust moneys and other than insolvency arrangement moneys) as appropriate, in the following books of account:

• (a) an office cash book (or the office side of a clients cash book);

• (b) an office ledger (or the office side of a client ledger);

• (c) an office ledger control account (to record the totals of all items that have been posted individually to the debit and credit columns of the office ledger); and

• (d) nominal ledger accounts (to record the totals of all items that have been posted individually other than to the debit and credit columns of the client ledger or the debit and credit columns of the office ledger).

(8)(a) A solicitor shall, as of each balancing date, prepare a statement (hereinafter in this Regulation referred to as a “balancing statement”) comparing and balancing:

• (i) the total of the credit balances due to his or her clients as extracted from the client ledger accounts, including credit balances in respect of controlled trust moneys or non-controlled trust moneys held in client account, controlled trust ledger accounts, and insolvency arrangement ledger accounts, provided that, without prejudice to the generality of Regulations 7(2)(a), 18(4)(a) and 23(4)(a) the solicitor shall not offset debit balances against credit balances, other than a debit balance or balances arising on one or more ledger account or accounts which is or are totally offset by a credit balance or balances on one or more other ledger account or accounts in respect of, as the case may be, the same client within the client ledger, the same controlled trust or the same insolvency arrangement;

• (ii) the balance on the client ledger control account, controlled trust ledger control account and insolvency arrangement ledger control account; and

• (iii) the balance or balances of each client account, controlled trust account and insolvency arrangement account opened and kept by the solicitor, as appearing from up-to-date statements from the bank or banks in which such account or accounts is or are so opened and kept, as adjusted for outstanding withdrawals and lodgments.

• (b) Each balancing statement shall be completed not later than two months after the balancing date to which it relates.

• (c) A solicitor shall maintain and keep a copy of each such balancing statement.

• (d) The balancing statements in respect of the accounting period in question shall be furnished by the solicitor to his or her reporting accountant; and the information therein shall in turn be provided to the Society in the form of and as Appendix 3 to the reporting accountants report for the accounting period in question.

(9)(a) Without prejudice to the generality of Regulation 11(5), a solicitor shall, on or within not later than two months after each balancing date, extract a list of all debit and credit balances as of such balancing date arising on the office side of the client ledger account, controlled trust ledger account, and insolvency arrangement ledger account.

• (b) A solicitor shall, not later than two months after the accounting date at the end of each accounting period, prepare a statement (hereinafter in these Regulations referred to as an “office balancing statement”) comparing and balancing as of that accounting date:

• (i) the balance on the office ledger control account; and,

• (ii) the total of the debit and credit balances, as extracted from the office side of the client ledger account, controlled trust ledger account, and insolvency arrangement ledger account..

• (c) The lists of all debit and credit balances prepared pursuant to subclause (a) of this clause together with the office balancing statement in respect of the accounting period in question shall be furnished by the solicitor to his or her reporting accountant; and the information therein shall in turn be provided to the Society in the form of and as Appendix 5 to the reporting accountants report for the accounting period in question.

PART III (A)

CONTROLLED TRUSTS

General duty where controlled trust moneys received

Where discretion to pay into controlled trust account

• (a) controlled trust moneys subject to the controlled trust concerned;

• (b) moneys to replace controlled trust moneys which for any reason have been withdrawn from the controlled trust account in contravention of Regulation 18; or

• (c) moneys which represent interest on controlled trust moneys, as provided for in Regulation 8.

• (2) A controlling trustee shall not hold moneys to which the controlling trustee is beneficially entitled in a controlled trust account for longer than three months.

• (3) In clause (2) of this Regulation, “moneys to which the controlling trustee is beneficially entitled” has the same meaning, mutatis mutandis, as “moneys to which the solicitor is beneficially entitled” as provided for in Regulation 5(3).

Treatment of moneys which include trust moneys

• (2) For the avoidance of doubt, it shall be a breach of these Regulations—

• (a) for a controlling trustee, having received controlled trust moneys, to fail, without reasonable cause, to pay (or transfer via client account) such controlled trust moneys to the appropriate controlled trust account (or controlled trust accounts); and

• (b) for a controlling trustee, having received controlled trust moneys, to fail, without reasonable cause, to record such receipt in his or her accounting records.

• (3) The Society may, upon application by a controlling trustee, give directions in writing to the controlling trustee regarding the holding of controlled trust moneys in an account other than a controlled trust account.

Moneys to be paid into controlled trust account

Withdrawals from controlled trust account

• (a) controlled trust moneys properly required for a payment in the execution of the controlled trust concerned;

• (b) moneys, not being controlled trust moneys subject to the controlled trust concerned, which for any reason have been paid into the controlled trust account by mistake or otherwise in contravention of these Regulations.

• (2) The provisions of Regulation 9 (relating to the manner of withdrawal from client account) shall apply, mutatis mutandis, to the manner of withdrawal from controlled trust account.

• (3) A controlling trustee shall not withdraw moneys from a controlled trust account, other than moneys permitted by and in accordance with clause (1) of this Regulation, unless the Society, upon application by the solicitor, give directions in writing in respect of such other withdrawal.

• (4) For the avoidance of doubt, it shall be a breach of these Regulations-

• (a) for a debit balance to arise on any controlled trust ledger account, other than a debit balance which is totally offset by a credit balance arising on another controlled trust ledger account in respect of the same controlled trust; and

• (b) for a solicitor to discharge personal or office expenditure from a controlled trust account.

Duty of controlling trustee to maintain accounting records

• (a) to show separately in respect of each controlled trust of which he or she is a controlling trustee all his or her transactions with controlled trust moneys received, held, controlled or paid by him or her on behalf of each such controlled trust; and

• (b) to distinguish controlled trust moneys from all other moneys received, held, controlled or paid by him or her on any other account.

PART III (B)

NON-CONTROLLED TRUSTS

General duty to pay non-controlled trust moneys into non-controlled trust account

• (2) For the avoidance of doubt, it shall be a breach of these Regulations for a solicitor to discharge personal or office expenditure from a non-controlled trust account.

PART III (C)

INSOLVENCY ARRANGEMENTS

General duty to pay insolvency arrangement moneys into insolvency arrangement account

Moneys to be paid into insolvency arrangement account

• (a) insolvency arrangement moneys received from or on behalf of the relevant debtor in respect of payments due under the insolvency arrangement; or

• (b) refunds from a creditor, the personal insolvency practitioner or, as applicable, the bank for the credit of the relevant debtor, in order to correct any error in making the payments referred to at Regulation 23(1)(a), 23(1)(b), 23(1)(c), 23(1)(d) and in reversing the payments referred to at 23(1)(e); or

• (c) moneys which represent interest on insolvency arrangement moneys.

• (2) A personal insolvency practitioner shall not hold moneys to which the personal insolvency practitioner is beneficially entitled in an insolvency arrangement account for longer than three months.

• (3) No moneys, other than moneys which, as provided for in this Regulation or Regulation 21, a personal insolvency practitioner is required or permitted to pay into an insolvency arrangement account, shall be paid into an insolvency arrangement account; and, where moneys are for any reason wrongly so paid, the personal insolvency practitioner shall, immediately on becoming aware of that fact, transfer the amount of such moneys to the account into which such moneys should have been paid in the first instance.

• (4) For the avoidance of doubt, it shall be a breach of these Regulations:

• (a) for a personal insolvency practitioner, having received insolvency arrangement moneys, to fail, without reasonable cause, to pay such insolvency arrangement moneys to the appropriate insolvency arrangement account(s); and

• (b) for a personal insolvency practitioner, having received insolvency arrangement moneys, to fail, without reasonable cause, to record such receipt in his or her accounting records.

Withdrawals from insolvency arrangement account

• (a) moneys properly required for the payment on behalf of the debtor to a creditor according to his or her entitlement under the insolvency arrangement;

• (b) moneys properly required for or towards payment of an amount due to the personal insolvency practitioner under the Act of 2012 and Regulations made pursuant to the Act of 2012 and in accordance with the insolvency arrangement in respect of outlays actually disbursed by the personal insolvency practitioner on behalf of that debtor in the course of the provision of legal services to the debtor for which the personal insolvency practitioner has adequate documentary proof that the moneys are properly due at the time of withdrawal; and

• (c) moneys properly available to be applied by the personal insolvency practitioner in satisfaction (in whole or in part) of professional fees payable under the Act of 2012 and Regulations made pursuant to the Act of 2012 and in accordance with the insolvency arrangement where it has been made clear to such debtor that such moneys held by the personal insolvency practitioner are being or will be applied by the personal insolvency practitioner in satisfaction (in whole or in part) of such professional fees; provided that such moneys shall be transferred in a timely manner from the insolvency arrangement account to office account; and

• (d) bank charges, where appropriate; and

• (e) moneys that have been transferred into the insolvency arrangement account in error for which the personal insolvency practitioner has adequate documentary proof demonstrating such error.

• (2) The provisions of Regulation 9 (relating to the manner of withdrawal from client account) shall apply, mutatis mutandis, to the manner of withdrawal from an insolvency arrangement account.

• (3) A personal insolvency practitioner shall not withdraw moneys from an insolvency arrangement account, other than moneys permitted by and in accordance with clause (1) of this Regulation.

• (4) For the avoidance of doubt, it shall be a breach of these Regulations-

• (a) for a debit balance to arise on any insolvency arrangement ledger account, other than a debit balance which is totally offset by a credit balance arising on another insolvency arrangement ledger account in respect of the same insolvency arrangement; and

• (b) for a solicitor to discharge personal or office expenditure from an insolvency arrangement account.

Duty of personal insolvency practitioner to maintain accounting records