Fraud: Alerts and Risk Management
The Law Society and the Lawyers Insurance Fund regularly communicate fraud alerts and risk management information to lawyers. Lawyers will also want to consider commercial liability insurance to protect them from fraud risks that are not covered under the Policy. Part A of the Policy provides coverage for lawyers who are innocent tools or dupes of fraudster clients in fraudulent investment schemes or real estate value or identity frauds. Part C of the Policy provides some coverage for lawyers who are caught by a social engineering scam that results in a trust shortage. For more information, see My Insurance Policy: Questions and Answers.
Fraud risk management
Social engineering scams resulting in trust shortages:
The funds in your trust account may be the target of a fraudster. If you are tricked into willingly paying funds out of trust through the intentional misrepresentation of some material fact, you’ve fallen victim to the “bad cheque” or some other “social engineering” scam.
Other social engineering scams, including phony change in payment instructions.
Lawyers as tools or dupes of fraudster clients:
To manage other risks unrelated to fraud, including limitations and deadlines, practice management and risks by area of practice, see Preventing claims.