The SRA have put forward a proposal which will see law firms do away with using traditional client accounts and make a switch to the use of third-party accounts instead.

The thought behind the proposal is the elimination of risk involved in the potential misuse of client's funds which the regulator has stated is a 'consistent danger to consumers'.

The maintenance of client accounts is also a significant drain on the resources of many law firms, especially firms smaller in stature.

Two options have been proposed in the preliminary publication put forward by the SRA. The first is an arrangement where it would be approving all third-party managed accounts before they came into operation and the second is an arrangement where the SRA would take a hands-off approach whilst ensuring that safeguards were in place. The second option is preferred by the regulator and is expected to be preferred by the sector in general.

A Law Society spokesman added further to the publication saying: 'We are interested in proposals that reduce burdens on solicitors.'

‘It is not clear to us that these arrangements will necessarily improve consumer protection or reduce risk, but we will be studying the proposals closely.’

While being an interesting proposal, it remains to be seen how receptive some of the bigger players in the sector will be to such an idea.