Law Office Procedure Final Exam

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Final exam on Trust Accounts
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Flashcards by djcoda2000, updated more than 1 year ago
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Witness Fees are exempt from GST because: It is the view of the GST Committee of the Law Society that GST is not owning on per diem witness fees paid to an individual witness. This does not apply to an expert witness being paid a fee for his or her expert testimony.
Exempt from PST: Facsimile transmissions, printing, and photocopying of documents are disbursement that are exempt from PST, only if the fees or charges are reasonably related to the actual costs incurred by the lawyer or the law firm. Note: That PST is charged on all legal fees but PST does not generally attach to disbursements incurred by lawyers on behalf of their clients.
Do Not Charge GST on: Court fees (filing fees), Registration Fees, Application Fees, Government Fees to create and/or maintain an entity (incorporation, dissolution, registration, amalgamation, conversion, name change, etc.), Fines, Penalties, taxes, Land Transfer Tax, Probate Fees, Witness fees.
What are Solicitors Lien’s: If the client has been billed and doesn’t pay, or if the client retains another lawyer and the first lawyer still not been paid, then the first lawyer may be entitled to a solicitor’s lien on the file.
What are two types of Solicitors’ liens: A Retaining lien (sometimes called a possessory lien); and Charging Lien
Retaining Lien: The Lawyer has the right to retain files, documents, funds or other personal property of the client, in the possession of the lawyer until such time as the client pays the lawyer’s bill. The lawyer cannot actively enforces this lien by going before a court for a court order. In other words, if a client is required to hand over the property to another party, such as a trustee in bankruptcy, then the lawyer will also be required to do this. No Set Rules
Charging Lien: Comes in to play when the lawyer has recovered or preserved property for the client. In contrast to a retaining lien, the property does not have to be in the possession of the lawyer.
When are Charging liens are available? A lawyer who has not been paid has a right to actively enforce a lien over any property that is recovered or preserved as a result of the proceeding. (The lien only applies to the lawyer’s fees and disbursements for services related to the recovery or preservation of the property, not to all fees owed to the lawyer).
How does Charging Lines take effect? It appears that charging orders are unenforceable prior to a court order and it is therefore recommended that the lawyer first get a court when asserting this type of lien so as to ensure priority and endorsement. Where there is a court order, a charging lien generally takes priority over other creditors
What Act Govern Charging lien? S. 79(6) of the Legal Profession Act provides that all acts done and conveyances made to defeat or that operate or tend to defeat the charge are void against the charge, unless made to a bona fide purchaser for value without notice.
In the Ten Important points Re: Trust Accounts: Lawyers may have the following bank accounts: a. Trust account: 1. Pooled Account – contain money belonging to more than one client. 2. Separate Account – containing money belonging to only one client. b. General account: contains money belonging to the law firm and used for day-to-day operation of the law practice.
The trust accounts must be interest bearing: 1. The interest in pooled trust accounts is forwarded to the Law Foundation; 2. The interest in separate trust accounts belong to the client.
What are the lawyer's responsibility with trust accounts? Lawyers are personally responsible for any deficiencies in their trust accounts.
Savings institutions are classified as either: a. Credit unions- no limit on the amount that the lawyer can deposit; b. Banks and trust companies—limit of $100,000 on deposit.
Transaction on Trust Accounts All transactions on trust accounts must be documented through cancelled cheques, deposit slips and instructions in writing. An audit trail must be obvious.
Can a lawyer take money for a client's trust account? A lawyer cannot take money from a client’s trust account and apply it to outstanding fees for lawyer’s services unless the lawyer has “delivered an account for those services to the client.
Money held in trust accounts; A lawyer cannot use money held in a trust account to the credit of one client to cover an obligation for another client.
Any shortage in a lawyer’s trust account in excess of $2,500 must be reported by the lawyer to the Executive Director of the Law Society.
Any shortage in excess of $1,000 on a pooled trust account must be reported by the financial institution maintaining the account to the Law Society. This a statutory requirement.
Never write cheques against a deposit to a trust account unless: a. you have confirmation that the cheque you deposited into the trust account has cleared the bank account from which it was drawn; and b. you have proof that the cheque has been deposited into the trust account.
Trust Administration Fee (TAF) What is TAF: TAF is a $15 charge (as of January 1, 2014) that BC lawyers who maintain one or more trust accounts must remit to the Law Society quarterly for each distinct client matter in which trust funds are deposited into the trust account, unless the trust funds are solely for the purpose of paying legal fees or to be held as a retainer
When does TAF applies? TAF is applied to trust monies received in practice areas such as, but not limited to, conveyancing, criminal, personal injury, family, and wills and estate. TAF came into effect on March 1, 2005. Since that time, all applicable deposits into the trust account attract the fee.
How does TAF apply? If a lawyer is handing several client matters for a client, the TAF will apply to each matter. It is important to note, however, that only one transaction fee will apply per client matter; accordingly, multiple trust deposits and disbursements in relation to one client matter will not incur multiple trust administration fees.
Trust Protection Coverage What is trust protection coverage? Provided to clients who were victims of theft by lawyers from trust accounts since 1949
How does Trust Protection Coverage works: Before May 1, 2004, payment was made from the Law Society’s special Compensation Fund. Now payments are made from trust protection coverage provided by the Law Society’s Insurance Fund. Claimants do not need a lawyer to make a claim. Appeal available through the courts.
Losses Covered under Trust Protection Coverage: 1) Dishonest appropriation 2) Lawyer must have been acting in his or her capacity as a lawyer 3) Claimant is innocent Does not cover lawyer’s carelessness or poor work.
Time Limit for Trust Protection Coverage: Any trust protection coverage claim must be brought and written notice given to the Lawyer’s Insurance Fund within 2 years of the claimant becoming award of the lawyer’s theft and, in any event, within 10 years of the date of the theft.
How much can a claimant recover? The trust protection coverage will reimburse a claimant, on behalf of the lawyer who has committed the misappropriation, for the value of the money take. If the property taken isn’t money (or its equivalent), the claimant will be reimbursed for the properties actual cash value at the time the property was taken. Each claimant may recover up to $300,000 per claim.
The amount paid under TPC will be reduced; by any monies otherwise available to the claimant, the lawyer, or the lawyer’s law firm, to repay the stolen funds. For example, if the claimant has purchased an insurance policy that applies to the loss, or if the claimant is able to recover any monies directly from the responsible lawyer, TPC will only pay any shortfall remaining after taking into account either the insurance available through the policy or the funds recovered from the lawyer, i.e. Trust Protection Coverage is secondary coverage to other available sources of repayment.
BC Code Means: The Code of Professional Conduct for British Columbia. It replaced the Professional Conduct Handbook.
CDIC (Canada Deposit Insurance Corporation) Is a federal Crown Corporation that provides deposit on eligible deposits at member institutions ($100,000) per depositor).
Comingling Occurs when a lawyer deposits funds belonging to the client into a lawyer's personal or general account, or when a lawyer deposits personal or business funds into a trust account where trust funds are maintained.
CUDIC (Credit Union Deposit Insurance) - is a government corporation that protects credit union members against loss of deposits (providing unlimited insurance) held by British Columbia credit unions. CUDIC's responsibility is to administer and operate a deposit insurance fund.
Double entry system is a system of accounting that records each transaction twice- once as a debit and once as a credit.
What does E.O.E means Errors and Omission Excepted
List 4 way A bill or letter is delivered: (1) mailed to the client at the client’s last known address, (2) delivered personally to the client, (3) transmitted by electronic mail to the client at the client’s last known electronic mail address, or (4) made available to the client by other means agreed to in writing by the client.
What are the 5 matters dealing with Retainer Letter or Agreement? 1) Outline of the clients instructions 2) the lawyer's authority to act (it is good practice to identify the lawyers who will be performing the services) 3) the services to be performed (where necessary to clarify the case retainer) 4) the manner of remuneration, including the amount of retainer. 5) the terms under which the whole retainer will be terminated.
What is the amount of under a Contingent Fee Agreements for personal injury and wrongful death (MVA) an lawyer may charge? A lawyer is entitled to a contingent fee agreement when acting for a plaintiff in a personal injury or wrongful death arising out of the use of a motor vehicle, is 33 1/3% of the amount recovered. Any other personal injury or wrongful death is 40%
Three of the most common methods for arriving at a fee: 1. A fixed fee 2. An hourly rate 3. Percentage Fee (in case you don't remember, use also Contingent Fee)
Solicitor and Own Client Reviews: Under s. 70(1) of the Legal Profession Act: A client charged with a lawyer's bill may apply to a Supreme Court Registrar, before or after payment of the bill, for an appointment to review the bill. The lawyer must receive at lease five (clear) days notice of the appointment and of any affidavit in support.
Unless special circumstances exist, The lawyer must pay the costs of the review if 1/6 or more of the total amount of the bill is subtracted from it, otherwise the client must pay the costs of the review.
A contingent fee agreement must be written: It is important that the terms of such an agreement are clear. The terms should identify work contracted for and exclude work not to be done by the lawyer.
Interim billing also is appropriate for "set fee" The work must have been performed or the service actually rendered before billing, unless there are specific arrangements to the contrary. This applies to both interim and final billing.
In an application by a lawyer, the registrars will decline to review: Bills which are not sufficiently descriptive of the work done (one-liner bill) The registrar will decline to review disbursements claimed by a solicitor where they are not itemized.
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