3.3 Accounting Terminology and Basics

The basic statutory framework relating to trust accounting is found in:

Definitions and Introductory Issues

"client" includes a person or group of persons from whom and on whose behalf money is used by the law firm, if the money was received by the law firm in the course of its law practice and in relation to the provision by the law firm of legal services (Rule 119(1)(d));

"general account" would have funds received by you in relation to your practice (Rule 119(1)(g));

"money" includes any negotiable instrument (Rule 119(1)(j));

"trust money" is funds received in trust by you acting in the capacity of a barrister and solicitor in connection with your practice in Alberta and the provision of legal services and that belongs in whole or in part to the client, as well as money received as a general retainer (Rule 119(1)(o)). Note that there are exclusions from this definition.

The expanded definition of "client" may be widely interpreted to include, for example, the payor of funds who may be someone other than the person you are thinking of as your client.

In some instances, you may be in a dilemma as to whom you can receive instructions from as to the use of the money. You can contact the Practice Advisors for assistance but in extreme cases, you may need to apply to court to settle the question.

It is important to think about the issues that might arise before you agree to accept funds from anyone other than your client. If possible, have your "clients" agree who will give you instructions. In appropriate circumstances, consider advising other "beneficial owners" of funds that you are not protecting their interests.

If you are receiving funds that you must pay out soon after receipt, get them certified or ask that they be wire transferred into your trust account. It is appropriate to ask another lawyer for a certified cheque. Please see Frequently Asked Questions in Trust Safety Detailed Accounting Questions.

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3.4 Basics for General and Trust Accounts>

Last modified: Monday, 17 July 2017, 4:07 PM