Regulatory and Compliance Training & Consultancy

SRA Code of Conduct and SRA Accounts Rules Amendments

17 January 2012

The Solicitors Regulation Authority (SRA) published the new SRA Handbook on 6 October 2011. The SRA Handbook includes the new SRA Code of Conduct which replaced the Solicitors Code of Conduct 2007 and the SRA Accounts Rules which in turn replaced the Solicitors Accounts Rules 1998. Notwithstanding the fact that the new SRA Handbook had been in issue for less than three months, the first amendments have already been made with the second edition of the SRA Handbook having been published on 23 December 2011.

The second edition incorporates a number of changes which make the SRA Handbook consistent with the Law Society's designation as a licensing authority for Alternative Business Structures (ABS) under The Legal Services Act 2007.

In addition, the SRA have taken the opportunity to make a number of other amendments including correcting omissions, minor typographical errors and points of clarification.

The main changes are as follows:

SRA Code of Conduct

• Outcome (1.16) has been amended to clarify that the requirement to disclose to clients an act or omission which could give rise to a claim, applies only in relation to current clients.
• In Chapter 14 the definition of separate business has been amended to exclude a legitimate overseas practice in which a solicitor has an interest.

SRA Accounts Rules

The Order designating the Law Society as a licensing authority on 23 December 2011 contains provisions which mean that:

• the client accounts of ABSs will have the same statutory protection as that afforded by the Solicitors Act to those of “traditional” firms. Rule 13.6 has, therefore, been deleted and guidance note (iii) to rule 13 details the statutory provision for licensed bodies;
• the duty to whistleblow in suspicious circumstances has been extended to the reporting accountant of a licensed body; rule 35.1(a) has been amended to refer to the statutory provision for licensed bodies.

Other changes to the SRA Accounts Rules:

• Rule 29.24(c) has been amended to clarify that there is no requirement to keep hard copies of “on-line” authorities for client account withdrawals, although the information recorded must be capable of being reproduced reasonably quickly in printed form for at least six years.
• Note (i)(d) to rule 22 has been expanded to clarify the position in relation to interest earned on a separate designated client account as a result of the tax regime.

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Available downloads: SRA Handbook, SRA Accounts Rules, SRA Code of Conduct