The page reproduces "Risks for lawyers as escrow agents, stakeholders and trustees", a Benchers’ Bulletin article published in 1994, updates the coverage information and references a risk management article.
The indemnification program has experienced several significant claims arising out of lawyers acting as escrow agents, stakeholders or trustees in connection with commercial transactions. Without careful consideration of the obligations and proper documentation of the terms and conditions, these situations present a serious risk. Whenever possible, lawyers should consider alternate arrangements. However, if it is necessary for a lawyer to hold property or funds contingent on a future event, there are several issues that should be addressed:
- If the lawyer has acted for any of the parties to the arrangement, a conflict of interest may arise if there is any dispute between the parties. In order to minimize this risk, the arrangements must allow no discretion to the member in distributing or retaining the property or funds, and the circumstances in which the lawyer must hold and distribute the property or funds should be clearly spelled out in the agreement.
- The agreement should be in writing and signed by all the parties.
- The agreement should clearly give the lawyer the right to interplead the property or funds should any dispute arise regarding the lawyer's obligations.
- The agreement should contain proper indemnity arrangements for the lawyer from the parties to cover the cost of any court application or subsequent proceedings.
Lawyers should always consider whether undertaking the role of escrow agent, stakeholder or trustee may take them outside the scope of the coverage provided by the Policy. For more information, see Executors, trustees and other fiduciaries. For a useful article offering more risk management advice for lawyers acting as escrow agents, see Lawyer as Escrow Agent – Is it Worth It?
-
- Practice Management & Wellness: Risks & Tips
- Acting as an Escrow Agent, Stakeholder or Trustee
- About to act for family and friends? (Resist - it's just too risky!)
- Baby boomer blues: The practice risks of aging
- COVID-19 Related Measures Act
- Delegation: The buck stops here!
- What to do Before and After a Disaster Strikes
- Economic downturns: Managing risk in a troubled economy
- Email: Preventing a Mailstrom
- Health and Wellness
- Indemnities and Dispute Resolution Agreements
- Giving independent legal advice? Stop. Read this first.
- Managing the risks of a limited scope retainer
- Mobility: Managing the risk
- Smooth Sailing to Settlement: Avoiding Common Mistakes
- Risks and tips when using video-conferencing technology
- Witnessing a signature? Stop. Read this first.
- Risk management videos
-
- Fraud Prevention
-
- Fraud Alerts
- Fraud Alert: March 25, 2021
- Fraud Alert: March 4, 2021
- Fraud Alert: October 22, 2020
- Fraud Alert: August 6, 2019
- Fraud Alert: July 10, 2018
- Fraud Alert: December 15, 2017
- Fraud Alert: October 11, 2017
- Fraud Alert: July 6, 2017
- Fraud Alert: January 19, 2017
- Fraud Alert: August 4, 2016
- Fraud Alert: August 6, 2015
- Fraud Alert: May 7, 2015
- Fraud Alert: April 8, 2015
- Fraud Alert: December 31, 2014
- Fraud Alert: August 28, 2014
- Fraud Alert: December 21, 2012
- Fraud Alert: August 1, 2012
- Fraud Alert: June 1, 2012
- Fraud Alert: January 6, 2012
- Fraud Alert: December 15, 2011
- Fraud Alert: July 21, 2011
- Fraud Alert: May 2, 2011
- Fraud Alert: March 23, 2011
- Fraud Alert: June 2, 2010
- Fraud Alert: June 19, 2009
- Fraud Alert: May 14, 2009
- Fraud Alert: December 15, 2008
- Fraud Alert: September 16, 2008
- Fraud Alert: June 10, 2008
- Fraud Alert: May 5, 2008
- Fraud Alert: January 22, 2008
- Fraud Alert: August 10, 2005
- Fraud Alert: July 8, 2005
- Fraud Alert: March 11, 2005
-
- Bad cheque scam
- Bad Cheque Scam: List of Names and Documents
- Bad Cheque Scam: Steps to Manage Risk
- Bad Cheque Scam: Twists and Developments
- Bad Cheque Scam: Common Characteristics and Red Flags
- Bad Cheque Scam: What To Do If You Suspect a New Client May Be a Scamster
- Bad Cheque Scam: Report Actual or Possible Trust Fund Shortages
- The Ruses
- Bad Cheque Scam Publications
- Other Social Engineering Scams, Including Phony Change in Payment Instructions
- Real Estate: Value, identity and other frauds
- Cybercrimes