Law Business Essentials

If you discover a trust shortage, you must immediately deposit enough money into the trust account to eliminate the shortage (Rule 119.39(2) of the Rules of the Law Society of Alberta). 

Next, whether you have eliminated the shortage or not, the Responsible Lawyer must immediately report a trust account shortage if: 

• the trust shortage is greater than $2,500; or
• the deficiency is not corrected within seven days of the date of the shortage (Rule 119.39(4)).

You must report a shortage using the Trust Account and Client Ledger Shortages form.

Service charges, credit card discounts and bank errors are considered trust shortages. Service charges, credit card discounts and bank errors should not be withdrawn from your trust account. They should only be withdrawn from your general account. However, if you have a float in your trust account, it can cover these inadvertent deficiencies should they arise. 

If you think that the circumstances of the shortage could form the basis of a claim against you (whether you believe your client will ultimately suffer damages), you should report the matter to ALIA. Depending on the nature of the shortage, ALIA may be able to advise you on how to fulfil your requirements under Rule 152(1).

You are obligated to report any fraud or theft from your trust or general accounts (Rule 119.40).