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Handling money and trust accounts

Because of the nature of certain legal work carried out for their clients, lawyers often hold money belonging to those clients on trust - for example, a lawyer may hold the purchase price of a home a client is buying or a client may leave trust account funds with a lawyer to pay all the disbursements within the case (for example medical reports, lodging document fees). Sometimes lawyers insist on money being paid into trust in advance before they are prepared to act in particular matters. In all these cases the funds are kept in a trust account - a separate account maintained by the lawyer and subject to extensive control and regulation under the Legal Practitioners Act 1981 (SA). Trust accounts do not earn interest for the lawyer or the client.

A client who has difficulty obtaining money held by the lawyer on trust, or who has difficulty obtaining a financial statement from the lawyer relating to those funds, should immediately contact the Legal Profession Conduct Commission.

If a lawyer has improperly dealt with a client's money, the client may have a right to claim compensation from the Legal Practitioners Fidelity Fund, which is a fund set up under the Legal Practitioners Act 1981 (SA), and administered by the Law Society.

Claims against the Fund are investigated by the Law Society, which can put a time limit (not less than three months) on making claims. All payments from the Fund must be authorised by the Attorney-General.

Australian-registered foreign lawyers

The provisions of Schedule 2 of the Legal Practitioners Act 1981 (SA) and any other provisions of the Act, the regulations or any legal profession rule relating to requirements for trust money and trust accounts, apply to Australian-registered foreign lawyers in the same way as they apply to Australian legal practitioners. An Australian-registered foreign lawyer must, at all times while practising foreign law in South Australia, be adequately insured for professional indemnity insurance.

Handling money and trust accounts  :  Last Revised: Tue Jul 7th 2020
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.