Where practitioners are not acting for parties who have a dispute with respect to funds it is not recommended that they volunteer to act as stakeholder of such funds pending resolution of the issues. The parties to the dispute should make independent arrangements as to how such funds are to be held pending the resolution of their outstanding matters.
Practitioners are asked to consider, when contemplating a request for use of the firm’s trust account to hold funds as a stakeholder, the following (as a minimum):
- whether the terms of the holding of the funds include the payment of the professional costs and outlays of the trustee;
- to disburse the funds, the written formal consent of all beneficiaries or persons who believe they have an interest in the funds be required. The consent should be in writing signed by all the alleged beneficiaries;
- any terms of settlement, consent orders or orders of the court must –
- permit deduction of the professional costs and outlays of the trustee (if to be charged) as a first charge over the funds;
- be clear and concise as to the distributions of the funds; and
- the authority to release be signed by all alleged beneficiaries prior to the trustee disbursing the funds.
Stafford Shepherd,
Principal, QLS Ethics and Practice Centre
03 February 2023