Reminder: No Cash Model Rule
This is a reminder for lawyers to ensure they understand their obligations when it comes to receiving cash for client matters. As per Rule 119.57, lawyers must not receive cash greater than $7,500 in aggregate for one client matter. This is an important measure in the defence against money laundering and terrorist financing.
Exemptions
A few exemptions apply to this rule. A lawyer may receive more than $7,500 in cash in connection with the provision of legal services if the funds are:
- from a financial institution or public body;
- from a peace officer, law enforcement agency or other agent of the Crown acting in an official capacity;
- to pay a fine, penalty or bail; or,
- for professional fees, disbursements or expenses, provided that the refund will be issued in cash.
Cash Rule Breach
If these exemptions do not apply and a lawyer or law firm receives an aggregate amount exceeding $7,500 in cash for one client matter, this is considered a cash rule breach. The lawyer or law firm should report the matter to the Law Society and disclose the matter on the Self Report in the annual filings.
Key Reminders
Here are some final key reminders to help you comply with Rule 119.57:
- If the cash received is in foreign currency, the amount must not be more than $7,500 when converted to Canadian dollars.
- The $7,500 limit applies even if there is more than one client on a client matter.
- If you received $7,500 or more in cash for one client matter, the refund must also be issued in cash. In this instance, refunding a client using another payment method is a breach of the Rules.
Contact Trust Safety if you have any further questions.