Regulatory and Compliance Training & Consultancy

Residual Client Ledger Balances

September 2014

READ THE LATEST RESIDUAL BALANCES GUIDANCE DOCUMENT HERE

The Solicitors Regulation Authority (SRA) has recently issued guidance aimed at Compliance Officers for Finance and Administration (COFA's) which suggests that any firm considering applying to the SRA for a waiver under Rule 20.1(k) of the SRA Accounts Rules 2011 to pay such balances over to a charity should consider delaying their application pending the introduction of Version 11 of the SRA Accounts Rules 2011 due to be introduced in October 2014. Forthcoming amendments to the SRA Accounts Rules 2011 will see the upper limit for paying monies to charity under Rule 20.1(j) of the SRA Accounts Rules 2011 increased from £50 to £500.

The SRA states in their guidance that with waiver applications under Rule 20.1(k) of the SRA Accounts Rules 2011 taking up to twelve weeks to process, firms should delay any pending applications until after the new rules come into force on 1 October 2014.

The SRA‘s guidance also highlights the importance that the COFA should note the decision taken and reinforces the importance that firms must take ’adequate steps' to trace clients in order to return funds to them in the first instance.

We will shortly be updating our residual client ledger balances information sheet to take account of the changes to the SRA Accounts Rules 2011 and, perhaps more importantly, the SRA's expectations of what is needed to comply with Rule 20.2 of the accounts rules. If you would like to receive a copy when it is published and to be kept updated generally on the latest legal regulatory and compliance news, including the latest developments relating to the roles of COLP and COFA, sign up for our FREE newsletter.