Appointment of Second Signatories and Book-keepers:

Frequently Asked Questions

Answers to Frequently Asked Questions on the Legal Profession (Solicitors' Accounts) Rules in respect of client money (the 'Rules')

For information on conveyancing money please click here.

A) GENERAL ENQUIRIES

1. When I open a client account, does it have to be a specific type of account?

A: A client account can be a current account or a deposit account maintained at a bank or an approved finance company(as defined in the Rules)and the word ‘client’ must appear in the title of the account.

2. May I open more than one client account?

A: You may keep one client account or as many such accounts as you think fit.

3. Can money required to open or maintain a client account be paid into the client account?

A: Yes, money belonging to the solicitor for the purpose of opening or maintaining the client account may be paid into the account.

4. Is there any prohibition against opening a Syariah account for my client account?

A: The Rules do not prohibit the opening of a Syariah account. However, the client should instruct or be agreeable to the opening of such an account and the client must be aware of the limitations set by Islamic law on interests.

5. Can money be drawn from a client account by a cash cheque or bearer cheque?

A: No cash or bearer cheques are to be issued from a client account except with the leave of the Court.

6. Can money be drawn from a client account by means of an automated teller machine, telephone banking service or on-line banking service?

A: No, you may not do so as this is prohibited under the Rules.

7. May I issue bearer cheques to a remittance agent who encashes the cheque and deducts his fees from the amount before remitting the balance amount to my client.

A: No, law practices are not permitted to issue bearer cheques. The remittance agent’s fee has to be paid separately and not be deducted from the cheque amount payable to the client. A suggestion that you may wish to consider is to issue a separate cheque from your office account to the remittance agent for payment of the agent’s fee and thereafter reimburse from the client account.

8. May I withdraw money from a client account by an uncrossed cheque made payable to ‘Alicia’ without cancelling the word ‘bearer’?

A: A cheque made payable to ‘Alicia’ without cancelling the word ‘bearer’ is a bearer cheque. Under the Rules, money from a client account cannot be drawn via a bearer’s cheque. However, if a cheque is uncrossed but the word ‘bearer’ is cancelled, that is not a bearer’s cheque. The Rules do not prohibit withdrawal of money from the client account using such a cheque, subject to compliance with all other provisions of the Rules

9. May I withdraw from the client account money required for payment towards my solicitor’s cost?

A: A bill or written intimation of the amount of the costs must be delivered to the client. You must notify the client that such amount will be deducted in satisfaction of your costs and you must allow a lapse of 2 working days after giving the notification before transferring the amount out of the client account.

10. In a litigation matter, if my client is awarded party-party cost, is this to be paid into the client account?

A: Yes, party-party costs must be paid into the client account.

11. If the client agrees that I retain the party-party costs (as payment towards fees), can I pay it directly to the office account?

A: If the client consents that the party-party costs be used to fully pay your solicitor and client costs, such consent should be given in writing and you must tender your bill or other intimation of costs to the client first before you receive and pay the money into your office account.

12. Do I need to pay into the client account money held or received as an agreed fee?

If there is an agreement in writing with your client as to the agreed fee, you may pay the amount directly to your office account.

13. What happens if my law practice dissolves – may I still hold any unclaimed client money of the dissolved law practice?

A: You may still hold unclaimed client money of the dissolved law practice if you have a valid practising certificate to comply with section 77(2) of the Legal Profession Act.

B) SECOND SIGNATORIES

1. How do I know if I need a second signatory?

A: Under Rules 8(5) and 8(6) of the Rules, withdrawal of client money by way of a cheque or other instruction must be signed by 2 solicitors for –

• Any amount exceeding $5,000 but not exceeding $30,000 if the law practice has not engaged a book-keeper for purposes of Rule 11(8) of Rules.

• Any amount exceeding $30,000.

2. I do not have a second signatory to the client account and I do not have an approved book-keeper that meets the requirements under the Rules. What are the restrictions on my dealings with client money?

A: If you do not have a second signatory to the client account and you do not have an approved book-keeper that meets the requirements under the Rules, you may only make withdrawals of less than $5,000.

3. Who can be a second signatory?

A: Under Rule 8(7), a solicitor can be a second signatory to a client account if:

• he has been in practice as a solicitor in Singapore or employed as a legal service officer for 3 or more years in aggregate;

• he is holding a current practising certificate; and

• his practising certificate is not subject to any condition imposed under section 25A or 27A of the Legal Profession Act prohibiting him from signing a cheque or other instruction effecting a withdrawal from a client account.

4. Can a foreign lawyer be a second signatory?

A: Unless he has a practising certificate to practise law in Singapore, a foreign lawyer cannot be a second signatory.

5. How do I find a second signatory?

A: You may request any solicitor who meets the requirements under Rule 8(7) to be a second signatory to your client account.

The responsibility is on you to ensure that the person you wish to appoint as your second signatory meets the statutory requirements.

Contact the Communications Department at 65300238 for assistance if you need to contact solicitors who have volunteered to be a second signatory.

6. What are my duties if I am a second signatory?

A: A second signatory must take reasonable steps to check that monies to be withdrawn is deposited into and is to be withdrawn from the client or trust account, as the case may be.

A second signatory must review supporting documents shown to him or her by the first signatory solicitor to support the withdrawal from the client or trust account, as the case may be.

A second signatory must observe the confidentiality of client matters for which he is performing his duties as a second signatory.

For details on the responsibilities and duties of a second signatory, refer to the Practice Direction of Council here.

7. Can fees be charged by my second signatory?

A: Yes, the Council of the Law Society permits a second signatory to charge a fair and reasonable fee, as agreed between you and your second signatory, for carrying out his duties and responsibilities as a second signatory.

For details, refer to Council's Practice Direction 3 of 2011.

8. Can I have more than one second signatory?

A: Yes.

9. How do I check if a potential second signatory has conditions attached to his practising certificate?

A: To ascertain if there are conditions attached to the practising certificate of the person that you wish to appoint as second signatory, you may wish to request to have sight of his practising certificate. If in doubt, please check with the Law Society.

10. Who do I contact if I have a query on the Rules?

A: Please send your queries by e-mail to the Compliance Department of the Law Society at compliance@lawsoc.org.sg.

BOOK-KEEPERS

1. Is it compulsory to engage a book-keeper?

A: The Rules provide that you may engage a book-keeper.

2. Who can be a book-keeper under the Rules?

A: A book-keeper may be an accounting firm, an accounting corporation, a firm or corporation providing book-keeping services or an individual pursuant to Rule 11A of the Rules.

3. Does the book-keeper have to satisfy any criteria to be appointed as an approved book-keeper under the Rules?

A: The book-keeper must have the necessary qualifications, must undergo a mandatory training course prescribed by the Council of the Law Society and he cannot be an employee of the law practice.

Such a book-keeper must satisfy the following criteria:

• Have at least one of the following qualifications:

• London Chamber of Commerce and Industry (‘LCCI’)

• Association of Accounting Technicians (‘AAT’)

• Certified Accounting Technician (‘CAT’)

• A diploma in accounts from a polytechnic

• Passed ACCA level 2

• Degree in Accountancy

For those possessing only the qualification set out in (i), (ii) and (iii) above, the book-keeper or relevant person must also have at least one year's experience in writing up relevant books of accounts for a law practice. For a book-keeper or relevant person who does not possess any of the qualifications described above, the book-keeper or relevant person must declare that he has written up the relevant books of accounts of a law practice for 5 years.

• Be independent:, that is, not an employee, parent, spouse, sibling or child of the solicitor;

• He, or in the case of a relevant person, the proprietor, managing partner or managing director of his firm or corporation must submit the required statutory declaration to Council on an annual basis or whenever there is a change of book-keeper by the law practice; and

• He must have completed the mandatory book-keepers course prescribed by the Council of the Law Society and if he has not, he must undertake to complete the said course within 12 months of being so appointed.

4. How do I appoint a book-keeper under the Rules?

A: A sole solicitor, managing partner or director of any such law practice must apply annually in writing to the Council of the Law Society for approval to engage a book-keeper. The application must be accompanied by the relevant statutory declaration of the book-keeper.

In the statutory declaration, the book-keeper must declare (inter alia): (a) that he has completed the course specified in the Rules or if he has not yet undertaken the course, that he will do so within 12 months of appointment as book-keeper;

• that there is no employee or family relationship with the solicitor;

• that he undertakes to inform Council in writing if the law practice draws from a client account a sum exceeding $30,000 without a second signatory.

For details, refer to Council's Practice Direction 1 of 2011 on approved book-keepers as well as a specimen statutory declaration which sets out the matters that must be declared by the book-keeper.

5. If I engage a book-keeper pursuant to the Rules, does the book-keeper have any specific duties?

A: The book-keeper must keep your books and accounts properly written up and reconciled as required under Rule 11 of the Rules.

The book-keeper is required to inform Council of the Law Society pursuant to his undertakings:

• If he is unable to reconcile the balance in the client’s cash book (or client's column in the cash book) with the bank statements for all or any of the law practice’s client accounts, conveyancing accounts or conveyancing (CPF) accounts in any month;

• if he is unable to properly write up the books and accounts as required by Rule 11 of the Rules;

• if the law practice has received, held or authorised the withdrawal of client’s conveyancing money in contravention of the applicable provisions of these Rules or the Conveyancing Rules, or both;

• if the law practice fails to respond to his query as is necessary to enable him to carry out his duties; and

• if the law practice draws from a client account a sum exceeding S$30,000.00 without a second signatory.

6. Who do I contact if I have a query on the Rules?

A: Please send your queries by e-mail to the Compliance Department of the Law Society at compliance@lawsoc.org.sg.

Note: Applications received by via fax or e-mail using photocopies of the application form or accompanied by photocopies of the requisite SD will not be processed.