SOLICITORS' ACCOUNTS RULES

SOLICITORS' ACCOUNTS RULES

SOLICITORS' ACCOUNTS RULES

ARRANGEMENT OF RULES
Rule Page
1. Citation ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... F 2
2. Interpretation ... ... ... ... ... ... ...... ... ... ... ... ... ... F 2
3. Obligation to pay into client account ... ... ... ... ... ... ... ... ... F 2
4. Payment into client account ... ... ... ...... ... ... ... ... ... ... F 2
5. Splitting ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... F 3
6. Restriction on payment into client account... ... ... ... ... ... ... F 3
7. Drawings from a client account ... ... ...... ... ... ... ... ... ... F 3
8. Further restrictions on drawings from client account ... ... ... ... ...
F4
9. Exceptions ... ... ... ... ... ... ...... ... ... ... ... ... ... F 4
10. Obligation to keep accounts ... ... ... ...... ... ... ... ... ... ... F4
11. Powers of Committee ... ... ... ... ...... ... ... ... ... ... ... F 5
12. Delivery of intimation and notification ... ... ... ... ... ... ... ... ... F 6
13. Requirement by Committee ... ... ... ... ... ... ... ... ... ... ... F 6
14. Saving of rights of solicitor ... ... ... ... ... ... ... F 6





SOLICITORS' ACCOUNTS RULES

(Cap. 159, section 73)

[1 June 1965.]

1. These rules may be cited as the Solicitors' Accounts Rules.

2. In these rules, unless the context otherwise requires-

'client' means any person on whose account a solicitor holds or
receives client's money;

'client account' means a current or deposit account at a bank in the
name of the solicitor in the title of which the word 'client' appears;

'client's money- means money held or received by a solicitor on

account of a person for whom he is acting in relation to the holding
or receipt of such money either as a solicitor or, in connexion with
his practice as a solicitor, as agent, bailee, stakeholder, solicitor-
trustee or in any other capacity, but not money to which the only
person entitled is the solicitor himself or, in the case of a firm of
solicitors, one or more of the partners in the firm;

,,solicitor' means a solicitor of the Court and any firm of solicitors;

'solicitor-trustee' means a solicitor who is a sole trustee or who is co-
trustee only with a partner, clerk or servant of his or with more than
one of such persons; and

'trust money' means money held or received by a solicitor which is not
client's money and which is subject to a trust of which the solicitor
is a trustee, whether or not he is solicitor-trustee of such trust.

3. (1) Subject to the provisions of rule 9, a solicitor who holds or
receives client's money, or money which under rule 4 he is permitted and
elects to pay in a client account, shall without delay pay such money
into a client account.

(2) For the purposes of this rule, a solicitor shall keep not less than
one client account and may keep as many such accounts as he thinks
fit.

4. There may be paid into a client account-

(a) trust money;

(b)such money belonging to the solicitor as may be necessary for
the purpose of opening or maintaining the account;

(e)money to replace any sum which may by mistake or accident
have been drawn from the account in contravention of rule
8(2); and





(d)a cheque or draft received by the solicitor, which under rule 5
he is entitled to split but which he does not split.

5. Where a solicitor holds or receives a cheque or draft which
includes client's money or trust money of one or more trusts

(a)he may where practicable split such cheque or draft and, if he
does so, he shall deal with each part thereof as if he had
received a separate cheque or draft in respect of that part; or

(b)if he does not split the cheque or draft, he shall, if any part
thereof consists of client's money, and may, in any other case,
pay the cheque or draft into a client account.

6. No money other than money which under rules 3, 4 and 5 a
solicitor is required or permitted to pay into a client account shall be
paid into a client account.

7. There may be drawn from a client account-

(a) in the case of client's money-

(i) money properly required for a payment to or on behalf of
the client;

(ii) money properly required for or towards payment of a
debt due to the solicitor from the client or in reimbursement of
money expended by the solicitor on behalf of the client;

(iii) money drawn on the client's authority; and

(iv) money properly required for or towards payment of the
solicitor's costs where a bill of costs or other written intimation
of the amount of the costs incurred has been delivered to the
client and the client has been notified that money held for him
will be applied towards or in satisfaction of such costs;

(b)in the case of trust money, including money held by the
solicitor as solicitor-trustee

(i) money properly required for a payment in the execution
of the particular trust; and

(ii) money to be transferred to a separate bank account kept
solely for the money of the particular trust;

(c)such money, not being money to which either paragraph (a) or
(b) applies, as may have been paid into the account under rule
4(b) or (d); and

(d)money which may by mistake or accident have been paid into
the account in contravention of rule 6:

Provided that in any case under paragraph (a) or (b) the money so
drawn shall not exceed the total of the money held for the time being in
such account on account of such client or trust.





8. (1) No money drawn from a client account under rule 7(a)(ii) or
(iv), (c) or (d) shall be drawn except by

(a) a cheque drawn in favour of the solicitor; or

(b)a transfer to a bank account in the name of the solicitor not
being a client account.

(2) No money other than money permitted by rule 7 to be drawn from a
client account shall be so drawn unless the Committee, upon an application
in writing made to it by the solicitor,

specifically authorizes in writing its withdrawal.

9. (1) Notwithstanding the provisions of these rules, a solicitor
shall not be under obligation to pay into a client account client's money
held or received by him which

(a)is received by him in the form of cash and is without delay paid
in cash in the ordinary course of business to the client or to a
third party; or

(b)is received by him in the form of a cheque or draft which is
endorsed over in the ordinary course of business to the client
or to a third party and is not passed by the solicitor through a
bank account; or

(c)he pays into a separate bank account opened or to be opened
in the name of the client or of some person named by the client.

(2) Notwithstanding the provisions of these rules, a solicitor shall
not pay into a client account client's money held or received by him
which

(a)the client for his own convenience requests the solicitor to
withhold from such account; or

(b)is received by him for or towards payment of a debt due to the
solicitor from the client or in reimbursement of money expended
by the solicitor on behalf of the client: or

(c)is paid to him expressly on account of costs incurred, in respect
of which a bill of costs or other written intimation of the amount
of the costs has been delivered, or as an agreed fee, or on
account of an agreed fee, for business undertaken or to be
undertaken.

(3) Where a cheque or draft includes other client's money as well
as client's money of the nature described in paragraph (2), such cheque
or draft shall be dealt with in accordance with rule 5.

(4) Notwithstanding the provisions of these rules, the Committee, upon
an application in writing made to it by a solicitor, may specifically
authorize the solicitor in writing to withhold any client's money from a
client account.

10. (1) Every solicitor shall at all times keep properly written up
such books and accounts as may be necessary





(a) to show all his dealings with-

(i) clients' money held, received or paid by him; and

(ii) any other money dealt with by him through a client
account; and

(b)to distinguish such money held, received or paid by him on
account of each separate client and to distinguish such money
from other money held, received or paid by him on any other
account.

(2) All dealings referred to in paragraph (1)(a) shall, within 3
working days after the date of such dealings, be recorded in

(a)a clients' cash book, or a clients' column on the credit side or
debit side, as may be appropriate, of a cash book; and

(b)a clients' ledger, or a clients' column on the credit side or debit
side, as may be appropriate, of a ledger,

and no other dealings shall be recorded in such clients' cash book and
ledger, or, as the case may be, in such clients' columns.

(3) All dealings of the solicitor relating to his practice as a solicitor
other than those referred to in paragraph (1)(a) shall, before the end of
the month following the month in which the dealings were carried out,
be recorded in a separate cash book and ledger or in separate columns
of a cash book and ledger.

(4) In addition to the books and accounts referred to in paragraphs
(2) and (3), every solicitor shall keep a record of all bills of costs,
distinguishing between profit costs and disbursements, and of all
written intimations under rule 7(a)(iv) delivered by the solicitor to his
clients, which record shall be contained in a bills delivered book or a file
of copies of such bills and intimations.

(5) In this rule each of the expressions 'book', 'ledger' and
'record' shall be deemed to include a loose-leaf book and such cards or
other permanent documents as are necessary for the operation of a
mechanical system of book-keeping.

(6) Every solicitor shall preserve for at least 6 years from the date of
the last entry therein all books, accounts and records kept by him under
this rule.

(7) Notwithstanding paragraph (1), the Committee may specifically
exempt a solicitor from such of the provisions of this rule as relate to
clients' money, upon receipt by it of an application for such exemption,
made in writing and containing an undertaking not to carry out any
dealings with clients' money.

11. (1) In order to ascertain whether the provisions of these rules
have been complied with, the Committee, acting either

(a) on its own motion; or





(b) on a written complaint lodged with it by a third party,

may require any solicitor to produce at such time and place as may be
fixed by the Committee, his books of account, bank pass books, loose-
leaf bank statements, statements of account, vouchers and any other
necessary documents for the inspection of any person appointed by the
Committee, and such person shall be directed to prepare for the
information of the Committee a report on the result of such inspection
and any such report may be used as a basis for proceedings under the
Ordinance.

(2) Upon being required so to do a solicitor shall produce such
books of account, bank pass books, loose-leaf bank statements,
statements of account, vouchers and documents at the time and place
fixed.

(3) Before instituting an inspection on a written complaint
lodged with it by a third party, the Committee shall require prima
facie evidence that a ground of complaint exists, and may require
the payment by such party to the Committee of a reasonable sum
to be fixed by it to cover the costs of the inspection, and the costs
of the solicitor against whom the complaint is made and the Com-
mittee may deal with any sum so paid in such manner as it
thinks fit.

(4) The, Committee may make such order for the payment of the costs
of any inspection required by the Committee under this rule as it thinks fit.

12. A written intimation of the amount of a solicitor's costs incurred
and a notification to a client that money held for him will be applied as
mentioned in rule 7(a)(iv) may be delivered to a client in the same
manner as a bill of costs is required to be delivered under section 66(2)
of the Ordinance.

13. Every requirement to be made by the Council of a
solicitor under these rules shall be made in writing under the hand
of the Secretary and sent by registered post to the last address of
the solicitor notified to the Society and, when so made and sent,
shall be deemed to have been received by the solicitor within 48
hours of the time of posting.

14. Nothing in these rules shall deprive a solicitor of any recourse
or right, whether by way of lien, set-off, counter-claim, charge or
otherwise, against moneys standing to the credit of a client account.
L.N. 103/64. L.N. 306/79. L.N. 65/65. Citation. Interpretation. Obligation to pay into client account. Payment into client account. Splitting. Restriction on payment into client account. Drawings from a client account. Further restrictions on drawings from client account. Exceptions. Obligation to keep accounts. L.N. 306/79. L.N. 306/79. L.N. 306/79. Powers of Committee. L.N. 306/79. Delivery of intimation and notification. Requirement by Committee. Saving of rights of solicitor.

L.N. 103/64. L.N. 306/79. L.N. 65/65. Citation. Interpretation. Obligation to pay into client account. Payment into client account. Splitting. Restriction on payment into client account. Drawings from a client account. Further restrictions on drawings from client account. Exceptions. Obligation to keep accounts. L.N. 306/79. L.N. 306/79. L.N. 306/79. Powers of Committee. L.N. 306/79. Delivery of intimation and notification. Requirement by Committee. Saving of rights of solicitor.

https://oelawhk.lib.hku.hk/items/show/2722

1964

v12

159

6