What you need to know following the new SRA reporting regime becoming effective from 25 November.
The new SRA reporting regime became effective from 25 November and the SRA have brought its revised guidance into one area and has supplemented the rules with a Q&A to assist its firms.
It has also updated its guidance on ‘the prescribed circumstances in which you can withdraw client money from client account to pay to a charity of your choice’.
It allows withdrawals of residual client account balances of less than £500 on any one client matter provided the balance is paid to a charity of the solicitor’s choice.
It also highlights that where balances are over this limit additional conditions apply and for these the solicitor should note that evidence will be required and the solicitor should expect that the ‘reporting accountant …. will look at whether you have followed these prescribed circumstances’.
The circumstances are:
‘We [SRA] expect you [solicitor] to make more intensive efforts to locate the rightful owner for larger or more recent residual balances or for balances where more details are held about the client.
You record the steps taken to return the money to the rightful owner and retain those records, together with all relevant documentation for at least six years.
You keep appropriate accounting records, including:
a central register which records the name of the rightful owner on whose behalf the money was held, the amount, name of the recipient charity (and their charity number) and the date of the payment; and
all receipts from the charity and confirmation of any indemnity provided against any legitimate claim subsequently made for the sum they have received.’
It is also highlighted that ‘for amounts over £500 you [the solicitor] will need our [SRA] authority before removing this money from the client account.’