Time for rules on client’s money

THE EDITOR: Sometime this month, the Law Association will publish in the daily newspapers the names of attorneys-at-law who have paid their annual subscription to the Law Association and contribution to the compensation fund. I presume that the reason for so doing is three-fold. Firstly, to galvanise attorneys-at-law to pay the requisite fees. Secondly, to inform members of the public, including the police, of the names of those attorneys-at-law who have paid their contributions and who are entitled to practise law during the ensuing year. Thirdly, to ensure that attorneys-at-law pay their contributions to the compensation fund, which may be the only recourse available to clients who have been defrauded by attorneys-at-law who may be unable personally to make good the loss suffered by clients.

Recently, the Law Association has been fairly vocal in their pronouncements. One will well recall the numerous releases put out by Association during the recently concluded Clinton Bernard — led Commission of Inquiry into the construction of the Piarco Airport terminal. That, of course, is consistent with the purposes of the Association stated in section 5 of the Legal Profession Act 1986 which established the body. One of the purposes is to “protect and assist the public in Trinidad and Tobago in all matters relating to the law.” It is in light of this thrust that I wish to request that the Association look again at their obligations set out in the Act. I am referring particularly to the obligation set out in section 33 of the Act. Section 33 states that the Council, the entity established under the Act to manage the affairs and perform the functions of the Association, may make rules with respect to the keeping and operating of accounts of clients’ money by attorneys-at-law. The section provides that such rules may prescribe the type of client’s accounts to be kept, the manner of operating them, the particulars to be recorded and the manner of recording them. In addition, those rules may empower the Council generally to take such action as may be necessary to enable them to ascertain whether the rules are being complied with.

Although the Act was passed since 1986, the Council has so far failed to make those rules. It can be regarded that a number of provisions in the Code of Ethics which is part of the Act specifically require attorneys-at-law to do some of the things that the rules ought to cover. An example is the requirement that an attorney-at-law should never mingle funds of others with his own; and that he should at all times be able to refund money he holds for others. The provisions found in the Code of Ethics are, however, insufficient. We can compare the position in Barbados. The Legal Profession Act fusing a hitherto divided profession there was passed in 1972. The Attorney-at-Law(Accounts) Rules were made the following year. Barbados did not have a Code of Ethics either in the body of the Act or in Regulations. However, after the passage of the legislation in Trinidad and Tobago, they quickly introduced their own Code which was taken virtually verbatim from ours. What do the Barbados Accounts Rules deal with?
Part 1 deals with definitions of various terms. Among those terms are “client account” and “client’s money.” Part 11 deals with client accounts. The rules specify what moneys ought to be paid into a client account and what moneys may be paid into that account. To make matters very clear, the rules go on to state that no other moneys are to be paid into a client account.

Further, should moneys that ought not to be so paid be in fact paid into a client account, the attorney-at-law is required when he makes that discovery, immediately to withdraw it. The rules also deal with what moneys may be drawn from a client account as well as the form of that withdrawal. Moneys may only be withdrawn by a cheque drawn in favour of the attorney-at-law or by a transfer to a bank account. If an Attorney-at-law has $5,000 standing to the credit of a particular client, the rules specifically forbid him when making payments to or on behalf of the client, from withdrawing more than that amount from the client account. There would be cases where moneys that ought to be paid into a client account are for various reasons exempt from being so paid and the rules make provision for these. However, in a number of those instances, the attorney-at-law is required to have the prior authorisation in writing of the client or the Bar Association, or to inform the client in writing.

Books of Account are dealt with in Part 111. The rules require an Attorney-at-law at all times to keep properly written up accounts to show his dealing with clients’ money which is received, held or paid by him, and any other money which is dealt with by him through a client account. The types of account and the entries to be made in them are specified in the rules. Unlike Trinidad and Tobago, the Barbados legislation specifically enables the Council there to make rules to require an attorney-at-law “to make good to the client out of the attorney-at-law’s own money a sum equivalent to the interest which would have accrued if the money so received had been...kept on deposit.” Part IV therefore requires an Attorney-at-law to deposit in a bank account, money above a certain amount which is not likely to be reduced below that amount within three months of its receipt. If the Attorney-at-law fails to so deposit the money, he would be required to pay out of his own money a sum equivalent to the interest that would have accrued on the money if it had been so deposited.

Of course, there are provisions for exemptions, example where there is a written agreement between the Attorney-at-law and his client as to the application of the money or interest on that money. Although the legislation in Trinidad and Tobago does not deal with interest accruing on client’s money, the section granting the Council power to make rules with respect to the keeping and operating of accounts of clients’ money by Attorneys-at-law is, it is submitted, sufficiently wide to include those provisions. I think that those rules have been outstanding for too long. We do not have to reinvent the wheel. The Barbados rules were based on the English rules. There is nothing to prevent us from adapting them to suit our own needs and culture; but we should not let yet another year pass without putting into place what the legislation passed seventeen years ago required of us.

EMERSON JOHN-CHARLES
Tutor Hugh Wooding
Law School