NSW + VIC solicitor trust account requirements
Solicitors holding client trust money face strict trust account + audit requirements.
Who must comply
Law practices (and, in Victoria, approved barristers' clerks) that receive trust money in NSW or Victoria, their principals and legal directors, associates authorised to operate the trust account, and Australian-registered foreign lawyers practising foreign law in the jurisdiction.
What triggers it
Receiving trust money in the course of, or in connection with, legal services. A practice that receives only controlled money or transit money (other than in cash) need not maintain a general trust account, but the money remains regulated.
When due
Continuous record-keeping and reconciliation; external examination for each trust examination year ending 31 March, with Victorian external examiners lodging end-of-year documentation with the Board by 31 May. A practice that ceases to be authorised to receive trust money lodges examination reports within 60 days after the relevant examination period (General Rules r 68(4)). Irregularities are notified in writing when discovered.
Evidence required
General trust account and trust ledger records kept in trust accounting software or a paper ledger (not a spreadsheet, General Rules r 40); bank reconciliations; external examiner's report and end-of-trust-year Parts A and B; written notice of associates authorised at 1 July to sign trust cheques or make transfers (General Rules r 50(2)); deficiency and irregularity notifications; Victorian statutory deposit account records.
Max penalty
Causing a deficiency in a trust account or trust ledger account, or failing to pay or deliver trust money, without reasonable excuse is an offence with a maximum penalty of 500 penalty units or 5 years imprisonment or both (Victorian Legal Services Board). Failing to maintain a trust account or to produce records for external examination also attracts penalties under the Uniform Law
Who must comply with this? The applicability test by industry, business structure and size.
Summary
The Legal Profession Uniform Law, which applies in both New South Wales and Victoria, and the Legal Profession Uniform General Rules 2015 govern how a law practice handles trust money: money entrusted to it in connection with legal services, including costs paid in advance, controlled money and transit money. A law practice that receives trust money must maintain a general trust account, may receive trust money only if a principal or legal director holds a practising certificate authorising it, must keep complete and unalterable trust records, and must have those records examined by an external examiner for each trust examination year (1 April to 31 March). Deficiencies and irregularities must be reported in writing to the regulator (Uniform Law ss 148 and 154), and the Board may grant exemptions from trust accounting obligations on written application.
Enforced by
Industries
Topics
Related
Frequently asked questions
- Who must comply with NSW + VIC solicitor trust account requirements?
- Law practices (and, in Victoria, approved barristers' clerks) that receive trust money in NSW or Victoria, their principals and legal directors, associates authorised to operate the trust account, and Australian-registered foreign lawyers practising foreign law in the jurisdiction.
- What triggers NSW + VIC solicitor trust account requirements?
- Receiving trust money in the course of, or in connection with, legal services. A practice that receives only controlled money or transit money (other than in cash) need not maintain a general trust account, but the money remains regulated.
- When is NSW + VIC solicitor trust account requirements due?
- Continuous record-keeping and reconciliation; external examination for each trust examination year ending 31 March, with Victorian external examiners lodging end-of-year documentation with the Board by 31 May. A practice that ceases to be authorised to receive trust money lodges examination reports within 60 days after the relevant examination period (General Rules r 68(4)). Irregularities are notified in writing when discovered.
- What is the maximum penalty for NSW + VIC solicitor trust account requirements?
- Causing a deficiency in a trust account or trust ledger account, or failing to pay or deliver trust money, without reasonable excuse is an offence with a maximum penalty of 500 penalty units or 5 years imprisonment or both (Victorian Legal Services Board). Failing to maintain a trust account or to produce records for external examination also attracts penalties under the Uniform Law
- What evidence is required for NSW + VIC solicitor trust account requirements?
- General trust account and trust ledger records kept in trust accounting software or a paper ledger (not a spreadsheet, General Rules r 40); bank reconciliations; external examiner's report and end-of-trust-year Parts A and B; written notice of associates authorised at 1 July to sign trust cheques or make transfers (General Rules r 50(2)); deficiency and irregularity notifications; Victorian statutory deposit account records.
Source: https://lsbc.vic.gov.au/lawyers/trust-accounts/operating-trust-account. Rules Mate is not a law firm. Always verify against the live regulator source before acting.