Trust Assurance Program
All lawyers who handle trust funds for clients or third parties are subject to rigorous trust assurance standards set out in the Law Society Rules.
The Trust Assurance Program is designed to ensure lawyers handle trust funds appropriately.
Law firms are required to submit an annual trust report to the Law Society. Some are also asked to file an additional accountant’s report if a further review is necessary.
Law Society compliance auditors conduct on-site audits of all law firms at least once every six years. The goal of the audits is to:
- help law firms correct minor problems with record-keeping before they lead to serious issues of non-compliance and possible professional conduct issues
- do an in-depth review of client files — to ensure trust funds are being handled properly
- answer any questions lawyers may have about trust accounting
- help lawyers develop proper accounting systems, record-keeping practices and trust fund handling procedures
Reporting a trust shortage
Rule 3-74 requires a lawyer who discovers a trust shortage to immediately pay enough funds into the account to eliminate the shortage. If the shortage is greater than $2,500 or if the lawyer cannot deliver up, when due, any trust funds held, the lawyer is required to immediately report the shortage and the circumstances to the Law Society.
Trust Administration Fee
BC lawyers must remit to the Law Society a fee for each file that involves trust funds. The fee revenue is used to fund the Trust Assurance Program.
Trust Accounting Refresher (Part 2 of the Courthouse Libraries BC series, The Practical Lawyer) – In this one-hour webinar, Law Society Trust Team Leader Krista Adamek, CPA, CGA presents a tour of the world of trust accounting and addresses the importance of proper trust accounting practices in safeguarding your client’s trust funds. She also highlights key compliance issues and discusses some current hot topics. [new in 2016]
For further reference
Rule changes enhance trust security, September-October 2006 Benchers' Bulletin
A new trust assurance program — more effective, and less costly for firms, January-February 2006 Benchers' Bulletin
The Law Society’s trust assurance team is available to answer any questions you and your staff may have about trust accounting and to assist you — particularly those in smaller firms or setting up new firms — to develop proper accounting systems.