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84-01 : Interest on Client Trust Funds

Reference is made to the provisions of section 30.2 [now section 39] of the Law Society Act respecting interest on trust deposits and more specifically to the exceptions outlined in subsection (5) [now subsection (4)].

Where a solicitor holds or receives monies for or on account of a client upon which, having regard to all of the circumstances, (including the amount and the length of time for which the money can reasonably be anticipated to be held) a client should be entitled to receive interest on such monies. In such event the solicitor should obtain written instructions from the client, or deposit the monies in a separate interest bearing account or deposit or invest the monies in a term plan of a bank or guaranteed term plan of a trust company and shall account to the client for all interest earned thereon.

Each situation will depend on its particular circumstances but the member should consider the cost to the client as a factor in determining the reasonableness of an investment. Depending on the circumstances of each situation, it may be considered unacceptable practice by a member of the society to fail to make arrangements with his client so that interest will be earned by the client on monies held by the solicitor for that client.

(January 1984)
[updated as to section numbers, February 1992]

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