SRA Handbook

Persons governed by the rules

Version 21 of the Handbook was published on 06/12/2018. For more information, please click 'History' Above

Rule 4: Persons governed by the rules

4.1

Save as provided in rule 4.2 below, Parts 1 to 6 of these rules apply to you.

4.2

In relation to an MDP, the rules apply to you only in respect of your regulated activities.

4.3

Part 6 of the rules (accountants' reports) also applies to reporting accountants.

4.4

If you have held or received client money, but no longer do so, whether or not you continue in practice, you continue to be bound by some of the rules.

Guidance notes

(i)

"You" is defined in the Glossary. All employees of a recognised body or licensed body are directly subject to the rules, following changes made by the Legal Services Act 2007. All employees in a recognised sole practice are also directly subject to the rules under section 34A of the Solicitors Act 1974. Non-compliance by any member of staff will also lead to the principals being in breach of the rules - see rule 6. Misconduct by an employee can also lead to an order of the SRA or the Solicitors Disciplinary Tribunal under section 43 of the Solicitors Act 1974 imposing restrictions on his or her employment.

(ii)

Rules which continue to apply to you where you no longer hold client money include:

(a)

rule 7 (duty to remedy breaches);

(b)

rule 17.2 and 17.8, rule 29.15 to 29.24 and rule 30 (retention of records);

(c)

rule 31 (production of documents, information and explanations);

(d)

Part 6 (accountants' reports), and in particular rule 32A and rule 33.5 (delivery of final report), and rule 35.2.

(iii)

The rules do not cover trusteeships carried on in a purely personal capacity outside any legal practice. It will normally be clear from the terms of the appointment whether you are being appointed in a purely personal capacity or in your professional capacity. If you are charging for the work, it is clearly being done in a professional capacity. Use of professional stationery may also indicate that the work is being done in a professional capacity.

(iv)

A solicitor who wishes to retire from private practice will need to make a decision about any professional trusteeship. There are three possibilities:

(a)

continue to act as a professional trustee (as evidenced by, for instance, charging for work done, or by continuing to use the title "solicitor" in connection with the trust). In this case, the solicitor must continue to hold a practising certificate, and money subject to the trust must continue to be dealt with in accordance with the rules.

(b)

continue to act as trustee, but in a purely personal capacity. In this case, the solicitor must stop charging for the work, and must not be held out as a solicitor (unless this is qualified by words such as "non-practising" or "retired") in connection with the trust.

(c)

cease to be a trustee.

(v)

A licensed body may undertake a range of services, comprising both "traditional" legal services and other, related, services of a non-legal nature, for example, where a solicitor, estate agent and surveyor set up in practice together. Where a licensed body practises in this way (an MDP), only some of the services it provides (reserved and other legal activities, and other activities which are subject to one or more conditions on the body's licence) are within the regulatory reach of the SRA. Other, "non-legal", activities of the licensed body may be regulated by another regulator, and some activities may not fall within the regulatory ambit of any regulator.