Operation of Special Accounts

Introduction

The **SRA Accounts Rules** (in force from 25 November 2019) contain specific provisions for certain types of bank account that a law firm may operate. Depending on the type of account, **different levels of regulation and disclosure** apply. This chapter examines the three principal 'special' accounts tested in SQE1: **joint accounts** (Rule 9), **clients' own accounts** operated as signatory (Rule 10), and **third-party managed accounts** ('TPMAs') (Rule 11). The key theme is that for each of these the **full client money regime in Rules 2 to 8 is switched off**, leaving only a carefully defined residue of obligations.

Assessment focus

For SQE1 FLK2 (Business Law and Practice / Solicitors Accounts), you must be able to **identify which account type a scenario concerns** and then state **which Accounts Rules apply and which are disapplied**. The most heavily examined point is the **TPMA** under **Rule 11.1**: candidates must know that money in a TPMA is **not client money**, that **no SRA permission is required** (only notification on the SRA's TPMA form), and that the firm must take reasonable steps to ensure the client understands the contractual terms, including **how fees are paid and who bears them**. Questions are single best answer (SBAQs) set in **realistic firm scenarios**; you must apply the rules, not merely recite them. This is a closed-book assessment.

Study tips

1) Memorise the **disapplication formula**: for joint accounts and clients' own accounts, **Rules 2 to 8 do not apply except** specified parts of Rule 8. 2) **Joint account (Rule 9)** keeps only **Rule 8.2** (bank statements at least every five weeks) and **Rule 8.4** (central record of bills/notifications of costs). 3) **Client's own account as signatory (Rule 10)** keeps Rule 8.2 and 8.4 **plus Rule 8.3** (reconciliation at least every five weeks) — the **extra reconciliation duty** is the favourite distractor. 4) **TPMA (Rule 11)** — money is **not client money** (so Rules 2 to 8 are simply irrelevant), **no permission needed**, **notify the SRA**, and **inform the client** of the contractual terms. 5) Remember that disapplying the Accounts Rules **never** disapplies the **SRA Code of Conduct** duties to safeguard client money and act in the client's best interests.