Q: My firm does civil and criminal legal aid work. We have been treating standard monthly payments and monthly payments from the Legal Services Commission (LSC) as office money in accordance with the interim guidance which you issued in 2000 (and updated in 2001). I was told then that the intention was to amend the accounts rules to make specific provision for such money. Has this happened?

A: Yes. This was one of the changes to the Solicitors' Accounts Rules 1998 made on 17 March 2004. Details of the amendments were set out (see [2004] Gazette, 25 March, 43). Standard monthly payments and monthly payments are included in the term 'regular payments' for the purposes of the new rule 21(2), which requires such money to be held in an office account. The rule change has the effect of removing the option (given in the interim guidance) of holding the money in a client account. A further requirement is that the solicitor must, within 28 days of submitting a report to the LSC notifying completion of a matter, either pay any outstanding professional disbursements or make an appropriate transfer from office to client account to cover those disbursements. The new rule will be compulsory from 1 May 2005, although solicitors can choose to adopt it before then. The interim guidance may be followed until 30 April 2005.

The changes can be found on the Law Society's Web site. Copies are also available from professional ethics.