Page 281 - IOM Law Society Rules Book

ADVOCATES ACCOUNTS RULES 2008

(viii) Although the advocate does not open a separate ledger account for the lender, the
mortgage advance credited to that account belongs to the lender, not the borrower,
until completion takes place. Improper removal of these mortgage funds from a client
account would be a breach of rule 22.
(ix) Reconciliations should be carried out as they fall due, and in any event no later than the
due date for the next reconciliation. In the case of a separate designated client
account operated with a passbook, there is no need to ask the bank, building society or
other financial institution for confirmation of the balance held. In the case of other
separate designated client accounts, the advocate should either obtain statements at
least monthly, or should obtain written confirmation of the balance direct from the bank,
building society or other financial institution. There is no requirement to check that
interest has been credited since the last statement, or the last entry in the passbook.
(x) In making the comparisons under rule 32(7)(a) and (b), it is improper to use credits of one
client against debits of another when checking total client liabilities because it fails to
show up the shortage.
(xi) The effect of rule 32(9)(b) is that the advocate must ensure that the bank issues hard
copy statements. Statements sent from the bank to its advocate customer by means
of electronic mail, even if capable of being printed off as hard copies, will not suffice.
(xii) Rule 32(9)(d) – retention of client’s instructions to withhold money from a client account –
does not require records to be kept centrally; however this may be prudent, to avoid
losing the instructions if the file is passed to the client.
(xiii) An advocate who holds client money (or controlled trust money) in a currency other than
sterling should hold that money in a separate account for the appropriate currency.
Separate books of account should be kept for that currency.

(xiv) The requirement to keep paid cheques under rule 32(10)(a) extends to all cheques drawn
on a client account, or on an account in which client money is held outside a client
account under rule 16(1)(a), or on an account in which controlled trust money is held
outside a client account under rule 18(c).

Rule 33 – Accounting records for clients’ own accounts

(1) When an advocate operates a client’s own account as signatory under rule 11, an
advocate must retain, for at least six years from the date of the last entry, the statements or
passbooks as printed and issued by the bank, building society or other financial institution,
and/or the duplicate statements, copies of passbook entries and cheque details permitted in
lieu of the originals by rule 11(3) or (4); and any central register kept under paragraph (2)
below.

(2) An advocate must either keep these records together centrally, or maintain a central
register of the accounts operated under rule 11.

(3) If, when an advocate ceases to operate the account, the client requests the original
statements or passbooks, the advocate must take photocopies and keep them in lieu of the
originals.

(4) This rule applies only to advocates in private practice.
Note

Advocates should remember the requirements of rule 32(8) (central record of bills, etc).

Rule 33 – Accounting records for clients’ own accounts page 38