Solicitors (Scotland) Act 1980

Accounts rules S

35 Accounts rules. S

(1) The Council shall, subject to section 34(2) and (3), make rules (in this Act referred to as “accounts rules”)—

(a) as to the opening and keeping by solicitors [F1 and incorporated practices] of accounts and deposits at the banks specified in subsection (2) [F2 or with a building society] for moneys not belonging to them received by them in the course of their practice;

(b) as to the opening and keeping by solicitors [F1 and incorporated practices]of—

(i) a deposit or share account with a building society. . . F3 , or

(ii) an account showing sums on loan to a local authority,

being in either case for a client whose name is specified in the title of the account;

(c) as to the keeping by solicitors [F1 and incorporated practices] of books and accounts containing particulars and information as to money not belonging to them received, held or paid by them in the course of their practice;. . . F4

(d) as to the action which the Council may take to enable them to ascertain whether or not the rules are being complied with. [F5 ; and

(e) as to the recovery from solicitors of fees and other costs incurred by the Council in ascertaining whether or not a soliciotr who has failed to comply with the accounts rules has remidied that failure and is complying with the rules.]

(2) The banks mentioned in paragraph (a) of subsection (1) are—

(a) the Bank of England;

(b) . . . F6

(c) the National Savings Bank;

F7 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F8 (e) a person (other than a building society) who has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits;

F8 (ea) an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to accept deposits;]

(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F9

and the rules may specify the location of the banks’ or companies’ branches at which the accounts are to be kept.

[F10 (2A) Paragraphs (e) and (ea) of subsection (2) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.]

(3) If any solicitor fails to comply with any rule made under this section that failure may be treated as professional misconduct for the purposes of Part IV.

(4) Rules made under this section shall not apply to a solicitor—

(a) who is in employment as solicitor to a Minister of the Crown or a Government Department or as an assistant or officer appointed to act under the direction of such solicitor; or

[F11 (b) who is in employment to which Part V of the Legal Aid (Scotland) Act 1986 applies;]

(c) who is in employment in an office connected with the administration of a local authority or a statutory undertaking or a designated body to which he has been appointed by the authority or the statutory undertakers or the persons responsible for the management of that body by reason of his being a solicitor,

so far as regards monies received, held or paid by him in the course of that employment.

In this subsection—

• “local authority” means a local authority within the meaning of the M1 Local Government (Scotland) Act 1973;

• “statutory undertakers” means any persons (including a local authority) authorised by any enactment or statutory order or any scheme made under or confirmed by an enactment to construct, work or carry on any railway, light railway, tramway, road transport, water transport, canal, inland navigation, dock, harbour, pier or lighthouse undertaking or any undertaking for the supply of gas, electricity, hydraulic power or water;

• “designated body” means any body whether corporate or unincorporate for the time being designated by the Council for the purposes of this section.

Textual Amendments

F1 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 13

F2 Words inserted by Solicitors (Scotland) Act 1988 (c. 42, SIF 76:2), s. 6(1), Sch. 1 para. 9

F3 Words repealed by Solicitors (Scotland) Act 1988 (c. 42, SIF 76:2), s. 6(2), Sch. 2

F4 Word repealed by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. II para. 4(a), Sch. 4

F5 S. 35(1)(e) added by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. II para. 4(b)

F6 S. 33(2)(b) repealed by Trustee Savings Banks Act 1985 (c. 58, SIF 110), ss. 4(3), 7(3), Sch. 4

F7 S. 35(2)(d) repealed (26.3.2001) by S.I. 2001/1149, art. 3(2), Sch. 2

F8 S. 35(2)(e)(ea) subsituted for s. 35(2)(e) (1.12.2001) by S.I. 2001/3649, arts. 1, 222(2)

F9 S. 35(2)(f) repealed by Banking Act 1987 (c. 22, SIF 10), s. 108(1)(2), Sch. 6 para. 9, Sch. 7 Pt. I (in Sch. 7 Pt. I the repeal is expressed to include the word “and” immediately preceding paragraph (f))

F10 S. 35(2A) inserted (1.12.2001) by S.I. 2001/3649, arts. 1, 222(3)

F11 S. 35(4)(b) substituted by Legal Aid (Scotland) Act 1986 (c. 47, SIF 77:2), ss. 43, 45, Sch. 3 para. 7, Sch. 4 para. 3(1)

Modifications etc. (not altering text)

C1 S. 35 modified (1.10.2004) by The Solicitors (Scotland) Act 1980 (Foreign Lawyers and Multi-national Practices) Regulations (S.S.I. 2004/383), {reg. 14}

C2 S. 35(2) amended (1.1.1993) by 1992/3218, reg. 82(1), Sch. 10 Pt. I para. 11

Marginal Citations

M1 1973 c. 65.

36 Interest on client’s money. S

(1) Accounts rules shall make provision for requiring a solicitor [F12 or and incorporated practice], in such cases as may be prescribed by the rules,. . . F13

(a) to keep in a separate deposit or savings account at a bank [F14 or with a building society], or on a separate deposit receipt at a bank, for the benefit of the client money received for or on account of a client; or

[F15 (aa) to keep in—

(i) a deposit or share account with a. . . F16 building society; or

(ii) an account showing sums on loan to a local authority,

being in either case an account kept by the solicitor in his [F12 or, as the case may be, the incorporated practice in its]own name for a specified client, money so received; or]

(b) to make good to the client out of the solicitor’s [F12 or, as the case may be, the incorporated practice’s] own money a sum equivalent to the interest which would have accrued if the money so received had been kept as mentioned in paragraph (a) [F17 or (aa)].

(2) The cases in which a solicitor [F18 or incorporated practice] may be required to act as mentioned in subsection (1) may be defined among other things by reference to the amount of any sum received or balance held or the period for which it is or is likely to be retained or held or both; and the rules may include provision for enabling a client (without prejudice to any other remedy) to require that any question arising under the rules in relation to the client’s money be referred to and determined by the Society.

(3) Except as provided by the rules, a solicitor [F19 or incorporated practice] shall not be liable by virtue of the relation between solicitor and client to account to any client for interest received by the solicitor [F19 or, as the case may be, the incorporated practice] on monies lodged in an account [F20 at a bank or with a building society], or on deposit receipt, at a bank, being monies received or held for or on account of his [F19 or, as the case may be, its] clients generally.

(4) Nothing in this section or in the rules shall affect any arrangement in writing whenever made between a solicitor and his client [F21 or an incorporated practice and its client] as to the application of the client’s money or interest on it.

Textual Amendments

F12 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 14(a)

F13 Word repealed by Law Reform (Miscellaneous Provisions) (Scotland) Act 1980 (c. 55, SIF 36:3), s. 25(a)(i)

F14 Words inserted by Solicitors (Scotland) Act 1988 (c. 42, SIF 76:2), s. 6(1), Sch. 1 para. 10(a)

F15 S. 36(1)(aa) inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1980 (c. 55, SIF 36:3), s. 25(a)(ii)

F16 Word repealed by Solicitors (Scotland) Act 1988 (c. 42, SIF 76:2), s. 6(2), Sch. 2

F17 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1980 (c. 55, SIF 36:3), s. 25(a)(iii)

F18 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 14(b)

F19 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 14(c)

F20 Words inserted by Solicitors (Scotland) Act 1988 (c. 42, SIF 76:2), s. 6(1), Sch. 1 para. 10(b)

F21 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 14(d)

Modifications etc. (not altering text)

C3 S. 36 modified (1.10.2004) by The Solicitors (Scotland) Act 1980 (Foreign Lawyers and Multi-national Practices) Regulations (S.S.I. 2004/383), {reg. 14}

37 Accountant’s certificates. S

(1) This section shall have effect for the purpose of securing satisfactory evidence of compliance with the accounts rules.

(2) Subject to the following provisions of this section, every solicitor [F22 and incorporated practice] to whom the accounts rules apply shall, in accordance with the rules made under subsection (3), deliver to the Council a certificate by an accountant (in this section referred to as an “accountant’s certificate”).

(3) The Council shall make rules (in this Act referred to as “accountant’s certificate rules”) prescribing—

(a) the qualifications to be held by an accountant by whom an accountant’s certificate may be given;

(b) the nature and extent of the examination to be made by an accountant of the books and accounts of a solicitor or his firm [F23 or of an incorporate practice] and of any other relative documents with a view to the signing of an accountant’s certificate;

(c) the intervals at which an accountant’s certificate shall be delivered to the Council, not being more frequent than once in each practice year;

(d) the accounting period for which an accountant’s certificate shall be delivered or the different accounting periods for which in different circumstances an accountant’s certificate shall be delivered;

(e) the period within which an accountant’s certificate shall be delivered; and

(f) the form and content of an accountant’s certificate.

(4) The accountant’s certificate rules may include such other provisions as the Council consider necessary or proper for the purpose of giving effect to the foregoing provisions of this section and for regulating any incidental, consequential or supplementary matters.

(5) The delivery of an accountant’s certificate in pursuance of subsection (2) shall not be required in the case of—

(a) a solicitor who [F24 or incorporated practice which], in agreement with the Council, furnishes to the Council and keeps in force a fidelity bond by an insurance office or other institution accepted by the Court as cautioners for a judicial factor appointed by the Court for such amount as the Council may determine, guaranteeing the intromissions of the solicitor or his firm [F25 or, as the case may be, of the incorporated practice] with money held by him or them [F24 or, as the case may be, it] for or on behalf of clients; or

(b) a solicitor [F24 or incorporated practice] who satisfies the Council that during the accounting period to which the accountant’s certificate would ordinarily relate he has not in the course of his practice [F24 or, as the case may be, it has not] held or received any money on behalf of clients.

(6) If the Council are of the opinion that satisfactory evidence of compliance with the accounts rules for the time being in force will be secured by some method other than by delivery of an accountant’s certificate under subsection (2), they may make rules—

(a) prescribing—

(i) that other method;

(ii) the terms and conditions to be observed in connection therewith; and

(iii) the procedure to be followed by solicitors [F26 or incorporated practices] desiring to adopt that other method, and

(b) containing such incidental, consequential and supplementary provisions relative thereto as the Council may consider necessary or proper;

and a solicitor who satisfies the Council that he [F26 or, as the case may be, an incorporated practice which satisfies the Council that it] is complying with rules made under this subsection shall not be required to deliver an accountant’s certificate in pursuance of subsection (2).

(7) A certificate under the hand of the secretary of the Society certifying that a specified solicitor [F27 or incorporated practice] has or has not, as the case may be, delivered to the Council an accountant’s certificate, or supplied any evidence required from him [F27 or, as the case may be, it] under this section or under the accountant’s certificate rules or, as the case may be, under any rules made under subsection (6), shall, unless the contrary is proved, be evidence of the fact so certified.

(8) Failure by a solicitor to comply with any provision of this section or of the accountant’s certificate rules or of any rules made under subsection (6), so far as applicable to him, may be treated as professional misconduct for the purposes of Part IV.

Textual Amendments

F22 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 15(a)

F23 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 15(b)

F24 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 15(c)

F25 Words inserted by virtue of Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 15(c) (which provided that after the word “firm” there should be substituted the words inserted in the text)

F26 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 15(d)

F27 Words inserted by Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73, SIF 76:2), s. 56, Sch. 1 Pt. I para. 15(e)

Modifications etc. (not altering text)

C4 S. 37 applied (with modifications) (1.10.2004) by The Solicitors (Scotland) Act 1980 (Foreign Lawyers and Multi-national Practices) Regulations (S.S.I. 2004/383), {reg. 13}

C5 S. 37 modified (1.10.2004) by The Solicitors (Scotland) Act 1980 (Foreign Lawyers and Multi-national Practices) Regulations (S.S.I. 2004/383), {reg. 14}