Solicitor Trust Accounts: Of no interest

Solicitor Trust Accounts: Of no interest

It is a little-known fact outside of law firms that funds held in solicitor trust accounts on behalf of clients earn no interest – and this has nothing to do with current low interest rates!

To clarify, any interest that is earned is directed to the Law Society of NSW on account of the Public Purpose Fund where it is distributed to a number of areas, including:

• co-funding Legal Aid,
• the Office of the Legal Services Commissioner – regulating NSW solicitors,
• the Professional Standards Divisions of the Law Society and the Bar Association – regulating solicitors and barristers,
• the Law & Justice Foundation –  improving access to justice in NSW, particularly for socially and economically disadvantaged people,
• community legal centres,
• discretionary payments for community legal education.

If a client, however, wishes funds in trust to earn interest, then they must formally (in writing) instruct their solicitor to deposit trust funds into a controlled money account, similarly to a term deposit account, to earn interest on the money while under the control of the solicitor.