Reference is made to the provisions of section 50(1) of The Legal Profession Act respecting interest on trust deposits and more specifically to the exceptions outlined in subsection 50(1).
Where a member (or law firm) receives money in trust from or for a client and 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 money, the member should obtain written instructions from the client and deposit the money in a separate interest-bearing account and must account to the client for all of the interest earned on it.
A “specific trust investment account” is defined in Law Society Rule 5-41 as follows:
“specific trust investment account means a separate interest-bearing account opened by a member or law firm in trust for a specific client at a savings institution, and is limited to a daily interest savings account, a term deposit or a guaranteed investment certificate.”
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 a client so that interest will be earned by the client on money held by the member or law firm for that client.
[Updated as to Act and section references, June 2017]
[Updated August 2022]
The Law Society of Manitoba
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