The Law Foundation of Saskatchewan’s main source of revenue is interest received from lawyers’ mixed trust accounts.
The Foundation's revenues depend entirely on the amount held at any point in time in these mixed trust accounts and the prime rate of interest established by the chartered banks, credit unions and other financial institutions with which Saskatchewan lawyers do business. Both of these factors are beyond the control of the Foundation and can result in significant variance in the amount of revenue available for grants to meet the legislated mandate of the Foundation.
While the individual amounts may be relatively small, when aggregated across the province the amount held by Saskatchewan lawyers in mixed trust accounts is substantial. The level of these balances is largely driven by economic activity and in particular the level of real estate activity.
The Foundation works closely with the financial institutions to negotiate a competitive interest rate on these mixed trust account balances.
Saskatchewan’s lawyers frequently hold money for clients in trust. The reasons range, for example, from the clients’ need to buy or sell real estate, buy or sell businesses, settle litigation, transfer matrimonial property or wind up estates. If the amounts involved are small, or will be held in trust for a short time, and so are unlikely to generate any net interest for the individual client, the money may be placed in a "mixed trust account" together with funds from other small or short-term transactions.
Saskatchewan lawyers who hold money in mixed trust accounts (rather than in special client specific trust accounts) must deposit the money in an interest bearing account with a financial institution, with the interest to be remitted by the financial institution to the Foundation.
The Legal Profession Act, 1990 deems the lawyer to hold the interest in trust for the Foundation, and the lawyer is required to send the interest to the Foundation (Section 78).
Lawyers are required by the Rules of the Law Society of Saskatchewan to instruct the savings institution in which they have a mixed trust account to send the interest earned on that account at least quarterly to the Foundation, and further to personally pay any service fees levied by the savings institution arising out of the operation of the account (Rule 1505).
Mixed trust accounts must be held in a financial institution in the Province (Rule 1501), unless the lawyer’s primary practice is outside Saskatchewan (Rule 1504 (6)). The Foundation has agreements with most financial institutions respecting the rates of interest to be paid and the procedure to be followed when remitting interest on mixed trust accounts.
