Client money Flashcards
What is the definition of client money in rule 2.1?
money held/received:
* Re regulated services
* On behalf of third party re regulated services
* As a trustee/holder of office/appointment
* Re fees and unpaid disbursements if prior to delivery of bill
What are the rules in rule 3 regarding client accounts?
- Only maintain client account at bank/building society
- Ensure name of client account includes
o Name of authorised body
o Word “client” - Must not use to provide banking facilities
What are the exceptions to the rule that client money must be paid prompty into the client account?
- conflict with trustee duties
- payment from legal aid agency for costs
- agreement in writing for alternative arrangements in individual circumstances
When will a firm be allowed to keep money in a non-client account?
- Only client money received is re fees/unpaid disbursements prior to delivery of bill
- Disbursements relates to costs incurred on behalf of client and authorised body is liable and
- Authorised body does not maintain a client account
What are the rules associated where client money is held in a non-client account?
- 2.5: Must be returned promptly as soon as no longer any reason to hold money
- 4.3(a): must give bill/notification of costs
- 8.1(a): should keep accurate records showing receipts and payments in ledger
What must happen if there are any breaches of client account rules?
Promptly correct including replacing any improperly withdrawn
How much interest must a firm account to the client for?
A fair sum
What is rule 5.1 on when money can be withdrawn from a client account?
- For purpose held
- Following receipt of instructions
- On SRA’s prior written authorisation/prescribed circumstances
Can money be withdrawn from a client account if there are insufficient funds for that client?
no
What is rule 4.3 regarding client money being held to pay costs?
- Must give bill/written notification
- Before you transfer money
- For specific sum
