Ethics Q&A

Q I am a legal aid practitioner.

All money I receive from the Legal Aid Board (LAB) in respect of profit costs, VAT and disbursements, is paid into my office account.

In fact, I do not have a client account and as far as I can tell, do not need one as the accounts rules apply to me.

I am concerned about the new accounts rules which became compulsory from 1 May this year.

I've heard that I may have to keep some of this money in a client account, which presumably means I will have to submit an accountant's report.

Is that right?

A The 1991 Accounts Rules did allow solicitors to place bulk payments from the LSC into their office accounts.

However, any unpaid professional disbursements included either had to be paid or transferred to a client account within 14 days of receipt.

Additionally, as that element of the payment was clients' money throughout, even while held in an office account, an accountant's report is required unless a dispensation has been granted.

The position is the same under the 1998 Accounts Rules, which define a professional disbursement as the fees of counsel, or other lawyer or of a professional or other agent or expert instructed by the solicitor.

In the 1998 Accounts Rules, Rule 21 deals with the treatment of payments to legal aid practitioners.

For the treatment of the new Standard Monthly Payments from the Legal Services Commission, see the interim guidance issued with the April 2000 edition of Dispatch.

This guidance is also available on the Law Society Web site at: www.legalaid.lawsociety.org.uk

X Question of ethics is compiled by the Law Society's professional ethics guidance team.

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