O. MEDIATION AND ARBITRATION FEES
While mediation and arbitration services can be provided by a lawyer, they are not legal services. In accordance with Law Society Rule 5-44(1)(a), when a lawyer is only providing such services, no related money may be deposited to the firm trust account. In addition, a lawyer who provides such services would need to be very clear upon being retained that these services are not legal services and as such any retainer money received will not be deposited to the firm trust account.
It should also be noted that as a firm’s general bank account is also only to receive money related to a firm’s legal practice (Rule 5-48(1)), the money cannot be deposited to a general bank account either. In such a case a separate bank account for the mediation and arbitration business should be used.
However, at times the same lawyer will provide both mediation/arbitration services and legal services and in such a case it becomes more difficult to discern what can or should be done. For example, a legal agreement may be drafted at the conclusion of a mediation, and the lawyer may receive a retainer for the agreement drafting. Such a retainer meets the definitions of both trust money and professional fees in the financial accountability rules, and as such must be deposited to the firm’s trust account.
So, if the services are purely mediation/arbitration, any related retainer cannot be deposited to the firm trust account and the client should be so advised in writing at the inception of the matter.
If there is a blend of services that include legal services, the portion of any retainer that relates to legal services should be deposited to the firm trust account. Again, the client should be advised in writing at the inception.