Wednesday, May 27, 2009

What is the "relevant account" in s58(6) of Legal Profession Regulation 2007?

Subsection 58(3)(iii) of the Legal Profession Regulation (LPR) provides:

"The law practice may withdraw the trust money -
(a) if
(i) ......
(ii) .....
(iii) the money is owed to the practice by way of reimbursement of money already paid by the practice on behalf of the person; and"
Subsection 58(6) of the LPR provides:

"For subsection (3)(a)(iii), money is taken to have been paid by the law practice on behalf of the person when the relevant account of the practice has been debited."
It has been suggested that the relevant account is the client's debtors ledger account. If this is the case a law practice could reimburse itself for a disbursement before the disbursement is paid from the law practice's general or office bank account.

It is the view of the Queensland Law Society that the "relevant account" is the law practice's general or office bank account, meaning that the disbursement must have been paid from the general or office bank account before the law practice can withdraw money from the trust account to reimburse the law practice for the disbursement.

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