Regulatory Breaches

Quick Reference SAR Breaches

General

  • To fail to lodge, without reasonable cause, all client money received to the appropriate client account(s)
  • To fail to record, without reasonable cause, said money in the practice’s accounting records
  • Holding monies in the client account to which the solicitor is beneficially entitled for more than 3 months, for eg
      • Money due to the solicitor in respect of professional fees, which the solicitor is entitled to transfer from client account to office account
      • Outlays expended by the solicitor, which they are entitled to withdraw from the client account
      • Money held on a client matter which the solicitor is beneficially entitled to share with one or more other clients, to the extent of the amount of the share of the solicitor
  • Mingling Insolvency Arrangement monies with those of the practitioner or any other client
      • Any insolvency arrangement monies received must only be lodged to the insolvency arrangement account
  • Withdrawing more monies from a client account than is held on behalf of the client concerned, thus causing a debit balance to arise on the client ledger account, unless the debit is completely offset by a credit on another ledger held in respect of the same client
      • In this instance, a matter to matter transfer should be posted
  • Withdrawing funds from a client bank account to discharge personal or office expenditure
  • Causing, and not correcting in a timely manner, a credit balance on the office side of a client ledger, providing it is not offset in its entirety by a debit balance on another ledger or ledgers held in respect of the same client
      • In this instance, fees, outlays and receipts should be checked and reallocated to the correct matters
  • Taking fees, interim fees or outlays not properly due at the time of the withdrawal

Controlled Trusts

  • To fail to lodge, without reasonable cause, all client money received to the appropriate controlled trust account(s)
  • To fail to record, without reasonable cause, said money in the practice’s accounting records
  • To cause a debit balance to arise on the client ledger of a controlled trust account, unless the debit is completely offset by a credit on another controlled trust ledger held in respect of the same controlled trust
  • To withdraw funds from a controlled trust account to discharge personal or office expenditure

Non-Controlled Trusts

  • It is the duty of the solicitor to pay non-controlled trust monies into a non-controlled trust account and it is a breach of regulations to withdraw funds from a non-controlled trust account to discharge personal or office expenditure

Insolvency Arrangements

  • To fail to lodge, without reasonable cause, all insolvency arrangement monies received to the appropriate insolvency arrangement account(s)
  • To fail to record, without reasonable cause, said money in the practice’s accounting records
  • To cause a debit balance to arise on the ledger of an insolvency arrangement account, unless the debit is completely offset by a credit on another insolvency arrangement ledger held in respect of the same insolvency arrangement
  • To withdraw funds from an insolvency arrangement account to discharge personal or office expenditure