Law firms occasionally hold trust funds for extended periods of time when they cannot locate the clients or other parties to whom the funds belong. A firm must maintain proper oversight, accounting, tracking and management of matters on which the firm is retaining inactive or undisbursable trust funds. It is the responsibility of the Responsible Lawyer — not the bookkeeper, paralegal, office manager or accountant — to safeguard client funds.
In certain circumstances, the Rules of the Law Society of Alberta allow firms to pay such undisbursable funds to the Law Society. Before paying the funds to the Law Society, the firm must have held the trust funds for more than two years and be unable to locate the funds’ owners despite reasonable efforts to do so (Rule 119.43 and section 117(5) of the Legal Profession Act).
Firms must submit a form to the Trust Safety department to obtain approval to remit funds to the Law Society. When a firm submits an undisbursable trust fund request to the Law Society, the Law Society reviews the steps taken by the firm to locate and contact the funds’ owners. The Law Society may request further information about the firm’s efforts in this regard.
Where the Law Society determines that the information in the request is insufficient, or the law firm has not made reasonable efforts to locate the owners and distribute the funds to them, the Law Society will reject the request. If the information in the request is sufficient, the Law Society will approve the request and provide further details on how to submit electronic payment.
For more information on what to do with unclaimed trust funds, visit our website or contact the Trust Safety department.
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