Trust accounts — pooled or separate?
Lawyers are reminded that, in accordance with section 62 of the Legal Profession Act and Part 3 of the Law Society Rules, funds received in trust are to be deposited into an interest- bearing trust account. In most cases, client trust funds are deposited to a pooled trust account, with interest payable to the Law Foundation. A lawyer, however, may obtain specific instructions from a client to set up and deposit the funds into a separate trust account, with interest accruing to the benefit of the client.
In each case, that lawyer should take into account the amount of the deposit, the time it will be held and the applicable interest rate to ensure that the return will outweigh the administrative costs and specific financial fees involved in a separate account.
Lawyers occasionally deposit funds in a pooled trust account in expectation of an early payout. If a process becomes protracted and the funds will remain in trust longer than anticipated, it is appropriate to reconsider whether to place the funds in a separate trust account.
Client instructions to deposit funds other than to a trust account must be in writing (Rule 3-51(3)) and the client should acknowledge in writing if the deposit is to an account that is not insured by CDIC or CUDIC (Rules 3-51(4) and 3-49).