Proctor : July 2018
7 PROCTOR | July 2018 Trust account investigations S263 of the Legal Profession Act 2007 Queensland Law Society trust account investigators have observed a growing number of law practices operating without a law practice trust account. There appears to be a belief that the absence of such a trust account immunises the law practice from a trust account investigation, but this is not so. The Society undertakes investigations of the affairs of all law practices in Queensland, including those law practices that do not operate trust bank accounts. In accordance with Section 263(5) of the Legal Profession Act 2007 (the Act), an investigation of the affairs of a law practice is a trust account investigation. The ‘affairs’ of a law practice are defined in Schedule 2 of the Act as: a. all accounts and records required under a relevant law to be kept by the practice or an associate or former associate of the practice b. other records of the practice or an associate or former associate of the practice c. any transaction— i. to which the practice or an associate or former associate of the practice was or is a party, or ii. in which the practice or an associate or former associate of the practice has acted for a party. Just because a law practice does not operate a law practice trust account does not mean that law practice does not receive or hold trust money. Examples of trust money – often found on investigation to be deposited to the general account by law practices without a trust account – include unpaid or unexpended outlays, deposited funds prior to the issue of a bill of costs or funds deposited without authority. These trust monies should be dealt with in accordance with the Act; deposited in a law practice trust account and dealt with accordingly. A law practice receiving trust money into its general account is considered a significant breach of the Act (Sections 248 and 257). A Section 263 investigation, if there is no trust account, usually takes one day and reviews the law practice’s general or office account to ensure that general trust monies have not been incorrectly received by the law practice. There may be instances in which a law practice does not operate a general trust account but may operate controlled money accounts or power money accounts (client bank accounts to which a law practice associate is a signatory). The investigation would review any such accounts and supporting documentation, as well as a sample of client files, which are selected after reviewing the accounts. The examination of general account records and sample of client files will conclude in a written report, whether matters have been conducted in accordance with clients’ instructions and whether trust moneys have been properly dealt with. A copy of the report is sent to the law practice for comment. The report addresses breaches of the Act and Regulations. An investigation report which identifies significant breaches will conclude an unsatisfactory result. The report and subsequent correspondence is referred to the Society’s Professional Conduct Committee (PCC) for consideration. There are a number of possible resolutions that could be made by the PCC: a. a follow-up Section 263 investigation to be undertaken after three, six or 12 months b. a request that the law practice’s sole practitioner, managing director or ILP director undertake additional training on trust accounting c. a request that the law practice reimburses the costs of the current investigation to the Society d. referral of the matter to the Legal Services Commissioner for his consideration. In light of the above, a law practice, as part of its risk management processes, should implement procedures to ensure all trust money is properly identified and accounted for. News Lifting the lid on elder abuse Queensland Law Society marked the United Nations’ World Elder Abuse Awareness Day with a call to lift the lid on elder abuse in Australia and raise awareness, education and reporting. “Elder abuse is widespread and includes all forms of abuse from physical and emotional to sexual and financial,” QLS president Ken Taylor he said. “Those targeted are among our most vulnerable – the elderly – particularly when mental or physical capacity is diminished and they are relying on relatives or carers to take care of them.” Mr Taylor said that there were three areas that needed to be addressed – awareness, education and reporting – by all levels of government and the community. “A key issue with elder abuse is that there is a real lack of reporting, which means it is often kept silent and not addressed at higher levels,” he said. “We need to encourage victims to not only report their abuse but also to understand what is classed as abuse, and that is where further education and awareness comes in. “With 60% of elder abuse being perpetrated by the person’s children, there is a lack of real understanding that they are being abused, as well as a fear for the consequences for their child.” Mr Taylor explained that alongside increasing awareness, education and reporting, was adequate access to legal assistance. “We must ensure that victims of any type of abuse have access to legal assistance in their local area, should they require it,” he said. “Many elderly cannot afford independent legal advice from a private practitioner, and so rely on pro bono lawyers, community legal centres and legal aid. “More funding is required along with easy access to advice, with many barriers including not only finances but also mobility and distance for victims who may no longer be driving themselves or may not have access to technology such as Skype to speak to a solicitor. “There must be access to justice and assistance at all levels, but for this to happen we must show an increase in reporting to show our governments that this is a widespread, serious problem for Australians.” The United Nations’ World Elder Abuse Awareness Day is held each year on 15 June.