RF3 notes – Part 2
2.1–2 Main practising details, any other practising address
2.1. Main practising details
Client money and controlled trust money
For practice in England and Wales, "client money" and "controlled trust money" are defined in rule 13 of the Solicitors' Accounts Rules 1998.
For practice outside England and Wales,
- "client money" means money held or received for or on behalf of a client, and
- "controlled trust money" means money which is subject to a controlled trust of which you are a trustee. (See rule 15 and rule 24 of the Solicitors' Code of Conduct.)
All the questions in this section relate to the practising year 1 November 2007 to 31 October 2008. They apply to all offices where a solicitor practises, including offices of your organisation and any other organisation(s) through which you practise.
Change the answer to any question if it is printed incorrectly on the form and include the date any changes became effective. Do not use liquid paper.
Change the relevant fee calculation if changing an answer means the compensation fund contribution payable is different. For example, if you are shown on the form as a partner, but became a consultant before the beginning of the practising year 2006/2007 and have not held client money directly or indirectly during that practising year, you should change your compensation fund contribution on the fee calculation page.
Questions A1 to B2
- Answer all four questions, even though some of them, at first sight, may appear to be covering the same ground.
- Change the answer to any question if it is printed incorrectly on the form.
- If you change the answer to A1 or A2, you may also need to change the fee calculation, because your compensation fund contribution may have changed.
- The answers to questions A1 to B2 should cover all office(s) of your organisation from which your relevant practice is carried on, and any other organisation(s) through which you practise. Examples include the following:
- a) If the question relates to practice in England and Wales and you are a partner, the answer should cover all English and Welsh offices of the partnership. If you are an employee, the answer should relate to the office at which you are based.
- b) If the question relates to practice anywhere in the world, and you are a member of a limited liability partnership (LLP) or a director of a company which is a recognised body, the answer should cover all offices of the recognised body.
- c) If the question relates to practice outside England and Wales and you are a partner in another law firm as well as being a partner in your firm, the answer should cover all offices of both firms which are outside England and Wales.
- Your answers to questions A1 and A2 determine whether you must pay the higher rate of compensation fund contribution. Your answers to questions B1 and B2 determine whether you must deliver an accountant's report.
Question A1
Have you held or received client money in the 12 months to 31 October 2008?
- The answer is "yes" if you have held or received client money in relation to practice from an office either in, or outside of, England and Wales.
- If the money was held or received in relation to practise outside England and Wales, the answer is "yes"—even if the solicitor is exempt from the overseas accounts provisions in respect of that money.
- You will always have held or received client money (whether or not you were a signatory to the client account) if
- a) you were a partner, or were held out as a partner, in a partnership; and
- b) the partnership held or received client money.
This does not apply if the practice was outside England and Wales and the partnership was an LLP formed under the law of a jurisdiction which gives the LLP a separate legal personality (for example, Jersey, California or Texas).
- If you were a partner, but became a consultant before the beginning of the practising year (1 November 2007 to 31 October 2008), the answer to question A1 is "no"—unless you held or received client money in a capacity other than as a partner in your firm.
- If a cheque was made out to you and was signed over to a client, beneficiary or employer, you "received" the money, even though it was not banked in you name.
Question A2
Have you held or received client money through a recognised body in the 12 months to 31 October 2008?
- The answer is "yes" if you were a director, member or shareowner of
- a) a recognised body which held or received client money in respect of practise anywhere in the world, or
- b) a body corporate which directly or indirectly owned the whole or any part of a recognised body, which held or received client money in respect of practise anywhere in the world.
- The recognised body could be either an LLP incorporated in the United Kingdom, a company incorporated in England and Wales or a company incorporated in another European jurisdiction.
- Even if the recognised body is exempt from the overseas accounts provisions in respect of that money, the answer is "yes".
Question B1
Are you required to deliver one or more accountant's reports in respect of practice in England and Wales in the 12 months to 31 October 2008?
- The answer is "yes"—if, in respect of practice in England and Wales in the 12 months to 31 October 2008, you
- a) held or received client money,
- b) held or received controlled trust money,
- c) operated a client's own account as signatory,
- d) were a director of a company (a recognised body) which held or received client money or controlled trust money, or
- e) were a member of an LLP (a recognised body) which held or received client money or controlled trust money.
- You will always have held or received client money in respect of practise in England and Wales (whether or not you were a signatory to the client account) if
- a) you were a partner, or were held out as a partner, in a partnership; and
- b) the partnership held or received client money in connection with the practise of its English or Welsh office(s).
- You may hold or receive controlled trust money in your capacity as a partner—for example, when a will or trust appoints "the partners" in a firm as the only executors or trustees.
- You may hold or receive client money or controlled trust money in a capacity other than as a partner—for example, when a will or trust appoints you by name as an executor or trustee.
- A solicitor who ceases to be a partner and becomes a consultant often remains a trustee of one or more controlled trusts and, thus, continues to hold controlled trust money.
- A client's own account means an account in the name of a client (not a solicitor's separate designated client account). A solicitor may be a signatory of a client's own account either under a power of attorney or, for example, as signatory for a company or charity.
- If you are required to deliver one or more accountant's reports in respect of practise in England and Wales, but not in respect of the practice of your firm, please answer "yes", but add a note "not through this firm". This is to make sure that you are not asked to send an accountant's report in respect of your firm. It would be helpful if you also give the name of the other firm.
Question B2
Are you required to deliver one or more accountant's reports in respect of practice outside England and Wales in the 12 months to 31 October 2008?
- The general rule is that a solicitor is required to deliver one or more accountant's reports in respect of practise outside England and Wales if, in the 12 months to 31 October 2008, the solicitor held or received client money or controlled trust money either
- a) directly (as an individual or partner), or
- b) indirectly (through a body corporate).
- You will have held or received money directly if, for example, any of the following circumstances apply:
- a) You held or received client money or controlled trust money as a sole practitioner.
- b) You were a partner, or were held out as a partner, in a partnership, and the partnership held or received client money. (This will be the case whether or not the solicitor was a signatory to the client account.)
- c) You held or received controlled trust money as a partner, where a will or trust appointed "the partners" in the firm as the only executors or trustees.
- d) You held or received client money or controlled trust money as an individual, where a will or trust appointed you by name as an executor or trustee.
- e) You received a cheque made out to you, which was signed over to a client, beneficiary or employer without being banked in your name. (In this case, you have received the money but have not held it.)
As an exception to the general rule in relation to partnerships, a solicitor does not have to deliver an accountant's report in respect of money held or received as a partner if
- a) a majority of the partners were lawyers of jurisdictions other than England and Wales, and
- b) UK lawyers did not form the largest national group of lawyers in the partnership.
The solicitor is required to deliver an accountant's report in respect of client money or controlled trust money which the solicitor held or received in some other capacity—as a named trustee, for example.
- You will have held or received money indirectly if any of the following circumstances apply:
- a) You were a member of an LLP, or a director of a company, which was a recognised body incorporated in England and Wales and which held or received client money.
- b) You were a member of an LLP, or a director of a company, which was a recognised body incorporated outside England and Wales and which held or received client money; provided that
- (i) solicitors owned a controlling majority of the shares, if the recognised body was a company with shares;
- (ii) solicitors constituted a controlling majority of the members, if the recognised body was an LLP or a company without shares.
- c) In relation to a body corporate, which was not a recognised body and which held or received client money, you were
- (i) a director or shareowner, if the body corporate was a company with shares and solicitors owned a controlling majority of the shares;
- (ii) a director or member, if the body corporate was a company without shares and solicitors constituted a controlling majority of the members; or
- (iii) a member if the body corporate was not a company and solicitors constituted a controlling majority of the members.
- d) You were a partner in a non-UK LLP which held or received client money, provided that
- e) You were a director or shareowner of a company with shares, which was not a recognised body and in which solicitors owned a controlling majority of the shares, and
- (i) you held or received controlled trust money as trustee; and
- (ii) the only other trustee(s) were director(s), shareowner(s) and/or employee(s) of the company.
- f) You were a director or member of a company without shares, which was not a recognised body and in which solicitors constituted a controlling majority of the members, and
- (i) You held or received controlled trust money as trustee; and
- (ii) the only other trustee(s) were director(s), member(s) and/or employee(s) of the company.
- g) You were a member of a body corporate which was not a company or a recognised body, in which solicitors constituted a controlling majority of the members, and
- (i) you held or received controlled trust money as trustee; and
- (ii) the only other trustee(s) were member(s) and/or employee(s) of the body corporate.
- h) You were a partner in a non-UK LLP, which was not a body corporate, but had separate legal identity in which solicitors constituted a controlling majority of the partners, and
- (i) you held or received controlled trust money as trustee; and
- (ii) the only other trustee(s) were employee(s) of the LLP.
- In respect of practise in Scotland or Northern Ireland,"solicitors owned a controlling majority" should be read as "solicitors and/or RELs owned a controlling majority"; and "solicitors constituted a controlling majority" should be read as "solicitors and/or RELs constituted a controlling majority".
Status
Your status in the organisation should be listed here.
Welsh language practising certificate
Please tick if you wish to receive your practising certificate in Welsh. Each Welsh practising certificate has an English translation on the reverse side.
Date started in organisation
If you have returned to work after a break (e.g. career break, maternity leave), indicate the date you returned to practice.
Roles (in the organisation)
We use roles to identify contact persons in firms and organisations. Please tick the box if you hold the role in your firm or organisation.
Organisation's designated complaints-handling person
If you work in private practice, you must ensure that yo u tell your clients who to contact if they want to complain (see rule 2.05 of the Solicitors' Code of Conduct). Tick the box if you are the person mainly responsible for handling complaints for your firm.
Money laundering reporting officer
Please tick the box if you are the person responsible for compliance with the Money Laundering Regulations 2007. The nominated person should be of sufficient seniority and in a position of sufficient responsibility to enable him or her to have access to all of the firm's client files and business information. Firms regulated by the Financial Services Authority (FSA) will need to obtain its approval of the appointment of the nominated officer, as this is a controlled function under the FSA's rules.
Practice manager
Occasionally, we contact organisations on practice management issues. Tick the box if you are the most appropriate person for this purpose.
Qualified to supervise
Please tick the box if you are the person within your organisation who is qualified to supervise in compliance with rule 5.02 of the Solicitors' Code of Conduct 2007.
2.2. Any other practising address
Please check the details and amend as necessary.