Special Compensation Fund claims

The Special Compensation Fund, funded by all practising lawyers in BC, is available to compensate persons who suffer loss through the misappropriation or wrongful conversion of money or property by a BC lawyer acting in that capacity. Although instances of misappropriation in the profession are rare, the Special Compensation Fund is a public protection the profession takes seriously.

The Special Compensation Fund Committee makes decisions on claims for payment from the Fund, in accordance with section 31 of the Legal Profession Act and Law Society Rules 3-28 to 3-42.

Rule 3-39(1)(b) allows for publication to the profession of a summary of the written reasons for decisions of the Committee.


James Edwin Marks
Nanaimo, B.C.
Called to the Bar: January 9, 1987
Ceased membership: January 1, 2000
Custodian appointed: January 20, 2000
Admitted misappropriation and professional misconduct to the Discipline Committee: July 20, 2001 (see July, 2001 Discipline Digest)

Claimant: K Estate
Payment approved: $225,537.31
Decision date: November 20, 2001
Report issued: February 6, 2002

Between February, 1997 and December 9, 1999, while acting as the solicitor for K estate, Mr. Marks received in trust a total of $293,749 respecting the estate.

Mr. Marks misappropriated $217,104.12 of these funds from trust, in part to cover trust fund shortfalls on unrelated files of two other clients and in part for his personal use.

The Special Compensation Fund Committee approved payment of $217,104.12 to the estate in relation to the misappropriation, and further exercised its discretion to pay $8,433.19 for legal fees incurred by the estate in obtaining a civil judgment against Mr. Marks.

Claimant: D and W
Payment approved: $415
Decision dates: October 29, 2001
Report issued: January 21, 2002

While representing D, the purchaser of a residential property in 1999, Mr. Marks was obligated pay $415 from funds held in trust for the property transfer tax. He issued a cheque to the Minister of Finance for the tax, but the cheque was returned NSF.

Mr. Marks subsequently transferred funds, including the funds designated for payment of the property transfer tax, from his trust to his general account.

The purchaser's son W himself paid the tax, as well as penalties and interest.

After finding that Mr. Marks had misappropriated the funds, the Committee approved payment of $415 to D and W for the tax, but declined to pay the penalty and interest portions of the claim.