Amendments to the Solicitors' Accounts Rules 1998 (SAR) were made on 17 March 2004.

They relate to regular payments from the Legal Services Commission (LSC), the retention of paid cheques, and the use of client account.

Rule 15 - use of client account

Rule 15 note (ix) has been amended to reflect the Wood and Burdett decision of the Solicitors' Disciplinary Tribunal.

This case made it clear that providing banking facilities through client account does not form part of a solicitor's practice.

The note reminds solicitors that they are likely to lose the exemption under the Financial Services and Markets Act 2000 if a deposit is taken in circumstances that do not form part of a solicitor's practice.

The amended rules are on the Law Society's Web site at www.lawsociety.org.uk.

The interim guidance on regular payments remains on the Web site but must not be used after 30 April 2005.

The rules and interim guidance are also available from the Society's professional ethics department on tel: 0870 606 2577.

Rule 21 - regular payments from the LSC

A new rule 21(2) deals with payments made to solicitors by the LSC under the civil and criminal contracting arrangements.

These payments must be placed in an office account.

Solicitors must, within 28 days of submitting a report to the LSC, pay outstanding professional disbursements on matters reported as completed, or transfer

a sum for those amounts to a client account.

Solicitors may now operate under the new rule, and must do so no later than 1 May 2005.

Rule 32(10) - paid cheques

Solicitors are now permitted to retain digital images of client account paid cheques instead of the original paper cheques.

The change takes effect from 17 March 2004.