Common breaches

Law Society investigating accountants ensure that solicitor firms are operating in full compliance with the Solicitors (Accounts) Regulations 2023. The most common breaches of the regulations are set out below.


  • Accounts must be kept up to date: Under Regulation 13(1), proper up to date books of account must be maintained.

  • Balancing statements must be prepared: Under Regulation 2, the accounting date is effectively the year end date, and the balancing dates are the other three quarterly dates for the balancing statements, which are three, six and nine months after the commencement of each accounting period (e.g. if the year-end is 31 December, the balancing dates are 30 March, 30 June, 30 September and 31 December).

  • Inadequate record of transactions: Under Regulation 25(1)(a), a clear record of transactions must detail the identity of the source and recipient of all money received and paid.

  • Inadequate record of electronic transactions: Under Regulation 25(1)(h), a clear record of all electronic transfers of funds must be maintained on a dedicated file.

  • Deficits going undetected for long periods of time: Under Regulation 7(2) (3), if a solicitor cannot rectify a deficit within seven days of it coming to their attention, they notify the Society in writing.

  • Lack of knowledge of solicitors of their accounts: Under Regulation 13(3), balancing statements must be approved and dated, in writing, by the compliance partner

  • Solicitors not opening bank accounts regarding estates: Under Regulation 2, clients’ moneys now specifically include moneys received by the solicitor acting as personal representative of an estate and can now be lodged to the client account.

  • Failure to maintain back up of computerised accounts: Under Regulation 25(2), backups must be performed promptly and stored securely other than on the practice’s office premises.


Under regulation 5(4) the following activities are prohibited:

  • Personal expenditure paid from client account,

  • Personal moneys passed through the client account,

  • Moneys being held in the client account where no instructions are received or imminent, and

  • Moneys lodged to the client account where no legal service was provided.

Under Regulation 5(4) it shall be a breach of the regulations for a solicitor to:

  • hold any personal moneys in the client account, or to pass any such funds through a client account; or

  • pay funds into the client account other than in respect of the provision of legal services.

Permitted activity – mortgage loans

  • Regulation 5(1) provides that the client account may receive the proceeds of a loan from a financial institution for the purchase of a property, provided the funds are discharged from the client account promptly


The following fee transfers and unauthorised withdrawals are prohibited:

  • Money transferred from client to office account without evidence of a client authority.

  • Moneys taken under the guise of fees: Under Regulation 7(1)(a)(iii), the client must be advised in writing (whether in a bill of costs or otherwise) that clients moneys held are being or will be used to pay (in whole or in part) professional fees and that moneys will transfer from the client to office account within 3 months

  • Taking fees without reference to a specific client: Under Regulation 7(2)(c), when a solicitor transfers moneys from the client account, they must relate such a transfer to a specific client

  • Withdrawals to make payments in cash without documentary evidence: Under Regulation 9(3), where a withdrawal relates to a cash payment from a client, documentary evidence must be kept (e.g. the witnessed signature of the cash recipient of the moneys)

  • Receiving moneys without providing the client with a full statement: Under Regulation 12(2): where a solicitor has provided legal services…the solicitor shall furnish to the client…a statement disclosing all moneys received, paid or held in respect of each client matter.

  • Non-compliance with S150 - S152 LSRA 2015 – section 12(3): A solicitor must maintain, on each client file, documentary evidence of compliance with Section 68 of the Act of 1994 or Sections 149 to 153 (inclusive) of the Act of 2015


The most common breaches regarding delays in dealing with client moneys relate to Regulation 13(8)(e):

“A solicitor shall review the listing of client ledger balances and controlled trust balances for undue or unnecessary delays in dealing with client matters, in particular:

  1. moneys due to clients or

  2. moneys due to be paid for or on behalf of clients

  3. where the listing discloses unnecessary or undue delays in dealing with client matters, the solicitor is required to take immediate action to deal with those matters, where appropriate, with same to be approved, in writing, by the compliance partner”

In practical terms, the following activities represent breaches of regulation 13(8)(e):

  • Witness expenses not being paid.

  • Outlays not reimbursed to clients.

  • Counsel fees not being paid.

  • Stamping not completed.

  • Registrations not being completed.

  • Non-compliance with undertakings.

  • Beneficiaries of estates not being paid.

  • Moneys due to clients not being paid out – this constitutes a breach of 13(8)(e), as above, and 5(5), which sets out that “a solicitor must return any moneys held in client account on behalf of client on completion of the provision of legal services. Such moneys shall not be held for a period of longer than six months after the completion of the provision of legal services, unless otherwise permitted by these Regulations.”.

In addition, the following are common breaches when dealing with client moneys:

  • Failing to account fully to clients for moneys received: Solicitors must be careful not to breach regulation 12(2): which states that “upon the completion of legal services, the solicitor shall provide the client, whether as part of a bill of costs or otherwise, with ‘a statement disclosing all moneys received, paid or held in respect of each client matter”

  • Not maintaining a record of outstanding client ledger balances: Regulation 13(8)(f) states that a solicitor ‘shall list client ledger balances outstanding two years or more as at the accounting date, disclosing the reason the balance is outstanding and, where appropriate, any action taken or proposed to clear the balances. Such a list should be approved by the compliance partner and provided to the Law Society in the form of and as Appendix 6 to the reporting accountants report for the accounting period in question’.

  • Professional fees must be transferred from client to office account within three months: Under Regulation 7(1)(a)(iii), “the client must be advised in writing (whether in a bill of costs or otherwise) that clients moneys held are being or will be used to pay (in whole or in part) professional fees and that moneys will transfer from the client to office account within 3 months.”


  • Where an interest earning client deposit account is available at the bank to a practice, the solicitor has an obligation to hold client moneys in an interest bearing account and/or account for interest thereon, this obligation discharged by either holding such moneys in a dedicated account or by accounting for interest in excess of €100 which would have been earned had the clients moneys been held in a dedicated account for the period commencing seven days after receipt of such moneys

  • Regulation 8(3) states that where a solicitor holds client moneys in a non-interest bearing account the solicitor has the same obligation to account for interest on those moneys as if held in an interest bearing account

  • Regulation 8(5) sets out that arrangements in writing with a client as to the application of client moneys received and interest thereon are not affected by Regulation 8

  • Regulation 8(6) sets out the obligations and provisions where an interest charge is applied or proposed to be applied by a bank

  • Regulation 8(7) states that it is not a breach of the Regulations to hold clients’ moneys in an account where an interest charge is being applied to that account and the solicitor cannot open or hold moneys in an interest-bearing account at the bank to the practice


  • Borrowing from clients: Under Regulation 35(1), the solicitor shall not borrow money from a client unless the client has been independently legally advised in regard to the making of the loan. Moneys held in the client account on behalf of the client shall not be used for or as part of any loan arranged in accordance with Regulation 35(1)

  • Loans by solicitor to clients: Under Regulation 36, a solicitor shall not, either directly or indirectly, lend moneys to clients or to any person for the purpose of obtaining that person's instructions to act. A solicitor shall not use the client account or any moneys contained therein in respect of any loan arrangement to or between clients.

  • Arranging loans for clients from other clients of the practice: Under Regulation 36(4), no sum in respect of a private loan from one client to another client should be paid out of client funds held in the client account for the client lender either by means of a client ledger transaction between the clients or to the client borrower directly.

  • Inadequate documentation in relation to loans: Under Regulation 37, supporting documentation shall be maintained on the client file, including evidence in writing of the loan agreement, the amount of the loan, the date of agreement of the loan, the terms of repayment and evidence of any independent legal advice provided to the client in respect of the loan.


  • Staff must not have unrestricted access to client funds: There must be an authorised signatory. Under Regulation 9(5), an “authorised signatory” shall be…a solicitor who is a partner or sole practitioner in the firm with a practising certificate in force, who is authorised to sign cheques or to conduct electronic transfers of funds on the client account.

  • Where there is more than one authorised person, a person who is not referred to above may act as an authorised co signatory where at least one of the authorised signatories is a solicitor within the meaning set out above.

  • A person who is not a solicitor with the meaning of 9(5) above may act as a sole authorised signatory for a firm, if the Law Society is satisfied that there are exceptional circumstances permitting such a person to act and has granted prior approval in writing for same


  • Under Regulation 27, where a firm is required to provide the Law Society with a reporting accountant’s report, the compliance partner shall complete and sign the Form of Acknowledgement

  • On the Form of Acknowledgement, the compliance partner shall confirm, inter alia, that

    1. each balancing statement has been approved;

    2. each office balancing statement has been approved;

    3. the listing of client ledger balances has been reviewed for undue or unnecessary delays in dealing with client matters…[and] immediate action has been taken, where appropriate, to deal with those matters;

    4. the list of client ledger balances outstanding two years or more at the accounting date has been approved; and

    5. appropriate back-ups of computerised information are performed promptly and are securely stored

  • Where the compliance partner is unable to provide confirmation in respect of the obligations under Regulation 27(2) …they shall set out in detail the rationale for same in the Form of Acknowledgement


  • Under Regulation 3(2), responsibility for any breach lies with the solicitor responsible for the breach and with the sole practitioner or each and every partner in the firm.

  • Employed solicitors: A solicitor practising otherwise than as a partner or principal, that handles or in way deals with client moneys, is subject to the regulations


  • Under Regulation 38(1), a solicitor shall maintain and keep a register of undertakings, noting all undertakings given by the solicitor from the commencement date onwards.

  • Under regulation 38(2), the register of undertakings shall include the date the undertaking was given, the identity of the client in respect of which the undertaking was given, the identity of the legal entity in receipt of the undertaking and the date the undertaking was complied with.


  • If a solicitor does not produce their accounting records for inspection by the Law Society, they may be required to do so by order of the High Court.

  • Under Regulation 39(4), “if a solicitor or the partner, employee or agent of the solicitor, who is required to make available accounting records to an authorised person for inspection under Regulation 39(3), refuses, neglects or otherwise fails without reasonable cause to duly comply with such requirement, the Law Society may, on notice to the solicitor, apply to the High Court under the Solicitors Acts for an order requiring the solicitor to make available for inspection at his or her place or places of business or such other place as the Law Society may require such accounting records as the Law Society (including the authorised officer) deem necessary for the purpose specified in Regulation 39(1) or as the Court thinks fit.”


  • Delays in filing the reports: Under Regulation 26(1), solicitors must ensure that their reporting accountants report is furnished within five months of the accounting date. Where a solicitor ceases to practice a final report must be submitted within three months

  • Extension request and lack of engagement with the Society on late reports: Under Regulation 26(1)(b), where an extension of time to file the reporting accountant’s report is sought in writing at least 14 days prior to the expiry of the five month period after the accounting date, the Law Society may extend by one month if sought 14 days before due date.

  • Who can act as the reporting accountant:

  1. A practising member of one of the professional accounting bodies

  2. Maintains a minimum level of professional indemnity insurance cover

  3. Under Regulation 26 (4)(b), the following persons are excluded from acting as a reporting accountant: a spouse, co-habitee, parent, child, sibling, dependent, associate or a person with whom a solicitor has a mutual business interest

  • Notification of resignation of Reporting Accountant and reason: Under Regulation 26(5)(d), a reporting accountant shall notify the Law Society in writing of their resignation or their cessation of operation as a reporting accountant, giving a 21 day notice period. Reasons for the resignation or cessation must be provided, unless it is not appropriate to do so.

  • Additional examination work required of the Reporting accountant: Regulation 28(2) sets out the steps the reporting accountant may be required to take when they carry out their examination of a solicitor’s accounting records in the course of preparing the reporting accountant’s report.

  • Reporting balances outstanding two years or more: Under Regulation 28(2) (Step 13), if client ledger balances are outstanding two years or more as at the accounting date provided by the Compliance Partner, these balances must be reported to the Society.

  • Reporting accountant’s obligation to report a deficit: Under Regulation 28(6): If the reporting accountant suspects that

    1. there is a deficit of clients’ funds in the practice which cannot be rectified within seven days; or

    2. there are entries in the accounting records which have been made to conceal the existence of a deficit,

    the reporting accountant may notify the Registrar of Solicitors directly of that opinion or those reasonable grounds

  • Northern Ireland firms are required to provide accountant’s report for the Northern Ireland office: Under Regulation 31(3), where a solicitor is the holder of practising certificates issued by both the Law Society of Ireland and the Law Society of Northern Ireland, the solicitor is, in addition to any obligations under these Regulations, required to furnish the Law Society with a copy of the accountant’s report furnished to the Law Society of Northern Ireland. The accounting dates for the firms in respect of the reports furnished should be the same accounting date in both jurisdictions.