Lawyers should verify electronic deposits to their trust accounts
BC lawyers who receive trust deposits by electronic transfer should exercise caution by confirming with their respective financial institutions that the deposits are valid and cannot be reversed before dealing with the funds.
The Benchers have become aware of instances in which lawyers received deposits in their trust accounts by electronic transfer (their financial institutions had reflected the funds as credited to their trust accounts). The deposits, however, were subsequently reversed. If a lawyer were to have paid out any of the funds by trust cheque prior to the funds being reversed, the trust cheque would have been dishonoured and the lawyer in breach of undertaking. The Law Society is looking further into this issue with the Canadian Payments Association to determine what problems may arise in wire transfers and what constitutes the best practice for lawyers to follow when receiving funds electronically.
Lawyers who have experienced any similar issues are invited to contact Don Terrillon, Auditor (email@example.com), at the Law Society office.