Sol AC

Question 1

When are periodic statements and reconciliation of accounts required?

Answer 1

AT least every 5 weeks

(exc: when money held or received jointly with client and third party)

Question 2

What are the exceptions of the requirement of account records that are filed at the SRA?

Answer 2

1. When money is received from the Legal Aid Agency
2. total balance of ALL client accounts does not exceed an average of 10,000 GBP and a maximum of 250,000 GBP

Question 3

What are the exceptions of holding client money in client account?

Answer 3

When client is informed in advance that:

1. Money held for disbursements made by firm on behalf of client
2. When the firm does not maintain a client account for any other reason

Question 4

What are the exceptions to the rule for paying client funds promptly into client account?

Answer 4

1. Alternative written arrangement with client
2. Payments received from Legal Aid Agency
3. Sol holds money as trustee or other appointment of office

Question 5

What kind of property searches are considered disbursements?

Answer 5

Postal property searches

(NOT electronic prop searches)

Question 6

What method of recording is used to deal with an invoice addressed to the firm?

Answer 6

principal method of payment should be used (includes a seprate VAT element)

Question 7

How often must client accounts be reconciled against bank statements?

Answer 7

At least once every 5 weeks

Question 8

Is VAT charged on disbursements?

Answer 8

No, the VAT is passed on to client

Question 9

On which side is abatement of professional costs recorded?

Answer 9

Client side

Question 10

What method of recording is used to deal with an invoice addressed to the firm?

Answer 10

principal method of payment should be used (includes a separate VAT element)

Question 11

How do you deal with an invoice addressed to the client?

Answer 11

Agency method

(no separate VAT element)

Paid from client account if sufficient funds or business account if insuff funds

Question 12

What are the differences b/w the agency and principal methods of payment?

Answer 12

Agency: invoice addressed to client; paid from client account (if sufficient funds); NO separate VAT element

Principal: addressed to firm; paid from business account (even if sufficient money in client account); separate VAT element
(counsel fee is an exception to the principal method; cross out firm name and put client name and pass to client; treated as agency method payment)

Question 13

A woman is buying a residential property. The solicitors for the seller and the buyer are using the Law Society’s Conveyancing Protocol. The solicitors are now preparing for completion.

If the solicitors do not agree otherwise, what method will be used to complete the transaction?

Answer 13

Post

The Law Society’s Conveyancing Protocol provides that completion will be by post in compliance with the Code for Completion by Post unless the solicitors agree otherwise.

Question 14

If a solicitor issues a bill for professional fees and/or disbursements and there is sufficient money in the client’s account to cover the bill, the solicitor may immediately transfer the money owed from the client account to the business account. True or False?

Answer 14

False

the sol can move the money