SRA Accounts Rules – Clarification of the new rules for disbursement payments

Ahead of the 25 November 2019 introduction of the new rules, the SRA held their annual Compliance Officers Conference on 30 October 2019.


New rule 2.1(d) gives one definition of client money as money held or received by the firm “in respect of your fees and any unpaid disbursements if held or received prior to delivery of a bill for the same.”  New Rule 4.3 further states that the client must be given a bill of costs, or other written notification of costs prior to the transfer of funds being made from the client to office account.

This suggested that a bill would have to be issued in advance of monies being transferred from the client to office bank accounts, even solely in respect of a disbursement. This would be a significant change from the current rules.

However, at the Conference it was stated that a Guidance Note would be published by the SRA clarifying their stance on the above. Some background was however given to their position during the Conference which suggested the following:

  • Disbursements become office money under Rule 2.1(d) once they have been incurred. Per the SRA, this would be when third party providing the service states it has been completed, either by raising an invoice or other methods of correspondence.
  • In respect of “written notification of costs”, the SRA would also determine that the above correspondence from the third party would be adequate, even though it is not addressed to the client.

This means, that in the SRA’s words, “firms acting as they are now should remain compliant once the new Rules have been introduced.”

For further information on the above, or any aspects of the new SRA Accounts Rules, please do not hesitate to contact Sam Evans or any member of the Professional Practices team on 01772 821021.

Below is also a link to the SRA webpage regarding the Compliance Officer Conference, which has videos of some of the speaker’s presentation and copies of their slides, which may prove useful to review in advance of 25 November.