Repayment (Client money)-FS

Question 1

What is the principle of repayment in the context of client money under the Solicitors Accounts Rules?

Answer 1

It is the duty to return client money promptly when there is no longer a proper reason to retain it.

Question 2

Rule 2.4 – Availability on Demand

Answer 2

Law firms must ensure that client money is available on demand, unless otherwise agreed with the client.

Question 3

Rule 2.5 – Obligation to Return Funds

Answer 3

Client money must be returned promptly as soon as there is no proper reason to continue holding it.

Question 4

When must a solicitor return client money under Rule 2.5?

Answer 4

As soon as there is no longer a proper reason to hold the funds, the money must be returned promptly.

Question 5

Can a solicitor delay returning client funds if there is no outstanding legal matter?

Answer 5

No. If there is no proper reason to hold the funds, they must be returned promptly in accordance with Rule 2.5.

Question 6

What does “available on demand” mean in Rule 2.4 of the Solicitors Accounts Rules?

Answer 6

It means client money must be accessible to the client without undue delay, unless a different arrangement has been made.

Question 7

When must client money be repaid?

Answer 7

• When the legal work is complete
• When there is no outstanding disbursement or bill
• When the client requests repayment
• When there is no lawful or agreed reason to hold it

Question 8

Why is the principle of repayment linked to accounting entries in the client account?

Answer 8

Because repayment requires understanding when and how to make accurate accounting entries, especially in tracking when client money should be removed from the client account.