Interest on Money Held in Trust Policy

Purpose

Clients sometimes ask whether money they pay us in advance earns interest, and who receives it. This policy explains how the law deals with interest on money we hold in trust.

How we hold trust money

• A trust account. Money we hold for clients, such as a retainer deposit or settlement funds, is kept in our trust account at a Canadian financial institution, separate from NEO's own money, under our Trust Accounting and Client Money Policy.
• Pooled, but tracked for each client. Money for more than one client is held together in one trust account. Our records show exactly how much belongs to each client, as our Books and Records Policy explains.
• An interest-bearing account. The Law Society Act requires a pooled trust account to be held at a bank, credit union or registered trust corporation, earning interest at a rate approved by the trustees of the Law Foundation of Ontario.

Who receives the interest

1. The Law Foundation of Ontario. Interest on a pooled trust account belongs by law to the Law Foundation of Ontario, and is paid to it. It doesn't belong to NEO or to our clients.
2. NEO earns nothing on money held for you. We never keep interest on trust money, and we never charge you for holding money in our pooled trust account.
3. What the interest pays for. The Law Foundation uses its funds for purposes the Law Society Act sets, such as legal aid, legal education and research, and law libraries.
4. No interest owed to clients. Because the law directs the interest to the Law Foundation, a client is not owed interest on money held in a pooled trust account.

When a client can receive interest

The law allows a client to receive the interest on trust money in two cases:

• the money is held in a separate trust account just for that client; or
• we have made a written arrangement with the client about the interest.

If you expect us to hold a large amount for you for some time, you may ask whether it can be held in a separate account. Any such arrangement is made in writing before the money is deposited, and says who receives the interest and who pays any costs of the account.

Money we can't return

Unclaimed trust money stays in our trust account until it can be returned, or until the Law Society allows us to pay it into its Unclaimed Trust Fund. It is never reduced by a holding charge. Our Unclaimed Trust Money Policy explains what happens to it, including that a claim to the Fund is paid without interest.

Interest on accounts

Interest that may be charged on an overdue account is a different thing, set by your retainer, as our Overdue Accounts and Collections Policy explains.

Review

This policy is reviewed at least once a year, and whenever the Law Society's By-Laws or rules change. The principal approves every change.

Questions

Email info@neolegalservices.com, call 647-200-3526 or toll-free 888-519-2435, or write to us at Unit 236, 1099 Kingston Road, Pickering, Ontario L1V 1B5.