These updated client asset rules aim to boost clarity and consumer confidence

The Law Society of Scotland has updated its rules in relation to client assets to increase protections for consumers.

The rules clarify existing obligations for solicitor firms which take on another firm’s client assets, including trusts, and highlight that they must identify and contact the owners as soon as practicable, and assess what action may be required to protect their best interests, including seeking and acting on instructions. The rules also emphasise that solicitors should safeguard these assets to the same extent as the assets they hold for their own clients.

The rule changes, which were considered at the Law Society’s AGM in June this year, came into effect this month on 1 November 2025.

A new rule requiring law firms to maintain a central record of client trusts where solicitors at the firm are acting as trustees in their professional capacity will come into effect next year on 1 November 2026 to ensure firms have sufficient time to prepare. It will also allow for the Law Society to obtain a copy of the record of trusts held by firms if required.

Law Society guidance accompanying the rules has been developed to support solicitors.

David Gordon, lay convener of the Law Society of Scotland’s Regulatory Committee, said: “These are important changes that improve protections for consumers who have placed money or property in trust. They will provide increased clarity on where trusts are held and by whom, alongside additional assurances for clients whose files or assets have moved to a different firm.

“These rules will also update and streamline processes for law firms taking custody of client files in the unfortunate circumstances of another legal firm going into administration. Safeguarding all client files and assets and ensuring an orderly transfer must be the highest priority in such cases.”

The Law Society’s rules in relation to anti money laundering (AML) have also been updated and come into effect on 1 November 2025. They permit a more flexible approach to firm reinspection charging and largely replicate an existing provision from the Society’s accounts rules in relation to a solicitor’s duty not to act dishonestly, which will be applicable to the AML rules. The changes also introduce a more proportionate process for annual Incidental Financial Business Certificate requirement for solicitors than currently provided for in the practice rules.