Notice to the Profession
July 15, 2019

The Benchers have approved changes to the trust account and cash transactions rules. The changes are based on the Federation of Law Societies model rules and are part of the Law Society’s ongoing commitment to combat money laundering.  

  1. Trust account only for legal services – new Rule 3-58.1

Rule 3-58.1, the new trust account rule, explicitly provides that funds paid into or out of a trust account must be directly related to legal services provided by the lawyer or law firm. The definition of “trust funds” in Rule 1 is narrowed so that funds received by a lawyer that are not “directly related to legal services” are not considered to be trust funds. In addition, on completion of the legal services to which the funds relate, a lawyer or law firm must take reasonable steps to obtain appropriate instructions to pay out the funds as soon as practicable. 

Subject currently to Rule 3-55(6), lawyers who allow monies that are not directly related to legal services may be subject to discipline (see Discipline Advisory, Lawyers are Gatekeepers and the resource “Highlights of changes to trust account and cash rules, July 2019” for examples where lawyers have got in trouble).

  1. Cash transaction rule – Rule 3-59

Another change to the cash transaction rule concerns refunds. A lawyer who receives or accepts cash for professional fees, disbursements or expenses in an aggregate amount greater than $7,500 must make any refund in cash. Do not write a trust cheque in these circumstances. As well, the cash limit under the rule has increased by one cent (from less than $7,500 to $7,500), to be consistent with the Federation’s model rule.

  1. Summary of trust and cash rule changes

To further understand your obligations, read the updated rules referenced below on the Law Society website and see the resource “Highlights of changes to trust account and cash transaction rules, July 2019."

  • an amendment to the definition of “trust funds” (Rule 1);
  • a new trust account rule (Rule 3-58.1);
  • amendments to the cash transactions rule (Rule 3-59);
  • new defined terms for “disbursements,” “expenses” and “professional fees” (Rules 3-53 and 3-98);
  • amendment to the definition of “public body” (Rule 3-53);
  • moving and amending the definition of “financial institution” (Rules 3-53 and 3-98);
  • an amendment to the records of cash transactions requirements (Rule 3-70).

Lawyers who have an ethical question with respect to the use of a trust account, including accepting or refunding cash or trust funds, are welcome to contact a practice advisor ( or 604.443.5797). Lawyers with a trust accounting question, should contact a trust auditor ( or 604.697.5810).