ETHICS Q & A

Q Rule 38 of the Solicitors' Accounts Rules 1998 requires me to retain a copy of the letter of engagement from my accountant on my file.

If I do not have this, what are the consequences?A If you do not have such a letter on file, you will have breached the 1998 Accounts Rules or the 1991 Accountant's Report Rules.

Rule 38 says you must have on the file a signed copy of your letter of engagement to the reporting accountant (or the signed original of a letter from the reporting accountant setting out the terms of the engagement).

Both you and the reporting accountant must sign.

Whether under the 1991 Accountant's Report Rules, or under the 1998 Accounts Rules, the appropriate letter of engagement should have been on your file from the date the accounting report is retained.

For preparation of reports under the 1998 Accounts Rules a new letter of engagement is required referring to the new rules.

Aide MemoireX The new Indemnity Insurance Rules will be effective from 1 September 2000.

Solicitors must ensure that they have their new indemnity insurance in place by that date.X The Establishment of Lawyers Directive 98/5/EC will be implemented in England and Wales on 22 May 2000.

Lawyers from other EU states who are EU nationals and established in the UK will have to register with one of the UK Law Societies or Bars.

Lawyers already practising in the UK will have until 21 November 2000 to make their applications, unless they wish to take advantage of their new rights under the Directive at an earlier date.X Question of ethics is compiled by the Law Society's professional ethics guidance team.

Questions for publication should be sent to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch; tel: 020 7242 1222.