The new Solicitors' Incorporated Practice Rules 2004 came into force on 13 February 2004 and replaced the Solicitors' Incorporated Practice Rules 2001.

Although they have been reworded and reorganised the requirements of the new rules have not changed substantially.

The two main changes are:

- The abolition of compensation fund covenants.

Under the new rules members of recognised bodies, and owners of shares in recognised bodies, are no longer required to submit compensation fund covenants.

The abolition of this requirement does not operate retrospectively, but covenants held by the Law Society will not be enforced in relation to events that occurred on or after the date on which the new rules came into force (see council statement).

- The need to replace a sole director or member following certain events.

A recognised body which is a company must appoint an additional or replacement director within 14 days if the only (or last remaining) director who is a solicitor or a registered European lawyer dies, abandons the practice or would have a professional problem in continuing as director.

A recognised body that is a limited liability partnership must comply with similar provisions and must also have a new or replacement member in place within six months if the membership falls below two.

The new rules can be found at: http://guide.lawsociety.org.uk (chapter 3, annex 3D, with further guidance in 3.17-3.19), or from the Law Society's professional ethics department, tel: 0870 606 2577.

Law Society Council statement

On 13 February 2004 the Solicitors' Incorporated Practice Rules 2001 were replaced by the Solicitors' Incorporated Practice Rules 2004.

The Solicitors' Incorporated Practice Rules 2004 do not require members and shareowners of recognised bodies to deliver compensation fund covenants to the Law Society.

The council, when making the new rules, decided also that a covenant submitted under the old rules (the Solicitors' Incorporated Practice Rules 2001 or the Solicitors' Incorporated Practice Rules 1988) will not be enforced in respect of any grant made from the compensation fund as a result of default or failure to account occurring after the Solicitors' Incorporated Practice Rules 2004 came into force.