September 3, 2026

This is an update to the Discipline Advisory originally issued on November 8, 2013. 

The Law Society has consistently recognized that the legal profession must take steps to prevent money laundering and, since 2004, has had a rule limiting the amount of cash that lawyers may accept. See Law Society Rules 3-59 (Cash transactions) and 3-70 (Records of cash transactions).

Rule 3-59 is commonly referred to as the “no cash rule”; however, lawyers may accept cash within certain parameters. Lawyers are generally precluded from receiving or accepting an aggregate amount greater than $7,500 in cash in respect of any one client matter. There are, however, limited circumstances under which a lawyer can accept cash in excess of that amount in connection with the provision of legal services. These exceptions are set out in subrules (2) and (4) and include instances where a lawyer receives cash from a law enforcement agency; pursuant to a court order; from a financial institution; for bail or for “professional fees” (includes a retainer), “disbursements,” or “expenses” (the words in quotations are defined in Rule 3-53).

Some lawyers have expressed uncertainty about how the exceptions are applied and what constitutes acceptance of $7,500 or more in cash with respect to any one client matter. Some lawyers have also expressed uncertainty about when refunds must be made in cash. The following Q&As may help when considering whether, and in what circumstances, you can accept cash and how to deal with it.

What specific purpose is the cash for? A retainer? 

When accepting cash for your “professional fees” (including a retainer), “disbursements” or “ expenses” in connection with the provision of legal services, it would be prudent to: 

(1) turn your mind to the purpose for which you are receiving the cash since the purpose affects the cash limits and the exceptions to those limits; document the circumstances and any client instructions; 

(2) ensure that cash received for a retainer is commensurate with the legal services to be provided (i.e., don’t let a client deposit $50,000 in your trust account for a $5,000 matter (also note BC Code rule 3.2-7 and commentary regarding dishonesty, crime or fraud);

(3) ensure that you have appropriate file systems in place so that, if you received cash for a retainer in an aggregate amount greater than $7,500 but the client later retains new counsel or your retainer is otherwise terminated, you do not inadvertently forward the retainer funds to new counsel or return them to the client by way of a trust cheque (or electronic funds transfer or bank draft) instead of cash; and 

(4) ensure that you have appropriate accounting systems in place to document and track a client’s cash transactions, in particular when you deposit a mix of cash and non-cash funds into trust that could lead to difficulty in monitoring the funds.

What if I accepted cash in trust greater than $7,500 for a retainer and my client asks me to forward it to new counsel?

Provide cash to the client’s new counsel. Do not write a trust cheque. A lawyer or law firm that receives or accepts cash in an aggregate amount greater than $7,500 under subrule (4) must make any refund out of such money in cash (Rule 3-59(4)). 

What if I accepted cash in trust incrementally? 

The limits on cash in Rule 3-59 apply even when cash is received incrementally, so it is important not only to know the purpose for the cash but to also track the receipt of cash in the aggregate.

If you received $5,000 cash for a client matter in March and $3,500 cash in June, you have received more than the $7,500 cash limit unless an exception in subrule (2) or (4) applies. Track the totals of cash received on any particular matter. In the aforementioned example, if you received $8,500 in cash in the aggregate for a retainer, and you need to issue a $500 refund, the refund must be in cash (subrule (5)). 

What do I do if I accepted cash in trust and also funds in other forms?

Let’s consider some scenarios.

• Assume you accepted $8,500 in cash in the aggregate in March and June for a retainer. You issued a bill. Next you accepted a $10,000 bank draft in July to top up the retainer and you issued another bill. The matter settled and you need to return $3,000 in trust to the client. How do you return the funds? Any time a lawyer receives or accepts cash in an aggregate amount greater than $7,500 under subrule (4) for professional fees, disbursements or expenses, the lawyer must make any refund out of such money in cash. You received a total of $8,500 in cash. In this case, the $3,000 would be refunded in cash. 
•  You accepted $8,500 funds in cash and a $10,000 bank draft for a retainer. You issued bills; however, you need to return $9,000. What do you do? You would return $8,500 in cash and $500 by trust cheque (or electronic funds transfer, or bank draft). 

A lawyer should not apply a practice of first funds in – first funds out in terms of cash received and billed. When refunding co-mingled funds, if cash over $7,500 is received, regardless of when the cash or other forms of payment are received, if the refund amount is equal or less than the cash received, that refund must be in cash.

If I will receive cash pursuant to a court order, can I receive an amount greater than $7,500, relying on Rule 3-59(2)(c)?

In Burgess (Re), 2011 LSBC 03, the hearing panel made clear that, in order to qualify for the court order exception (at that time Rule 3-51.1 ( (2)(b)), the terms of the order must specifically provide for a cash payment. It is not enough that an order cover the movement or payment of funds.

Ultimately, if you need, or choose, to deal with cash, you should be prudent. It is a best practice to document the permissible reason for accepting the cash and ensure that it is used for this reason. Be sure to track the cash in and out and ensure that, if it is received pursuant to one of the exemptions, the exemption actually applies.

What do I do if a client or third party deposits cash into my trust account without my knowledge or consent?

Lawyers must check all direct deposits to determine the form of funds received and they must accurately record the information. If you received cash, you must ensure that you can accept it. Know the difference between “receive” and “accept.” If you receive cash that you are not permitted to accept, follow the requirments in subrule (6). You must:

• make no use of the cash;
• return the cash, or if that is not possible, the same amount in cash, to the payer immediately; 
• make a written report to the Executive Director within seven days of receipt of the cash; and 
• comply with all other rules pertaining to the receipt of trust funds. 

If, for example, your client left $15,000 cash with your staff for a deposit for a real estate purchase and staff deposited the cash into trust, you received the cash but you are not permitted to accept it. You would follow the steps in Rule 3-59(6). 

What about recordkeeping?

Lawyers are obligated to record all cash payments (to general or trust) and cash withdrawals (from trust) in a cash receipt book of duplicate receipts that identifies specific information (Law Society Rule 3-70). Each receipt must be signed by the lawyer who receives or pays out the cash or an individual authorized by that lawyer to sign the receipt on the lawyer’s behalf, and by the person from whom the cash is received or paid out. Duplicate receipts are kept by the practice and the original given to the payer.

Questions? Failing to know your obligations with respect to the receipt or disbursement of cash, or not understanding them, is not a shield to disciplinary action. If you have a question about Rules 3-59 and 3-70, you are welcome to contact trustaccounting@lsbc.org. If you have a question about the BC Code, you are welcome to contact Practice Advice at practiceadvice@lsbc.org or 604.443.5797.