Defaults - Victorian Legal Services Board + Commissioner


In order for a claim to be successful the Board must find that there has been a default.  Claims are investigated to determine whether a default has occurred.

What is a default?

A ‘default’ within the meaning of the Legal Profession Uniform Law Application Act 2014, will include the following elements.

  • A default occurs in relation to either law practices or approved clerks.
  • A default consists of a failure to pay or deliver trust money or trust property, or a fraudulent dealing with trust money or trust property.
  • A default consists of an act or omission of an associate of a law practice, or approved clerk, that involves dishonesty.

(An associate of a law practice includes not only lawyers but also employees and agents of the law practice and some other persons as provided for in the Act.)

Please note: the above is only a general description of what is meant by the term ‘default’. The full definition consists of multiple technical elements.

Defaults not covered

The following types of claims are generally not covered by the Fidelity Fund:

  • Claims which relate to money or property entrusted for financial services where an Australian Financial Services Licence is required to provide the financial service.
  • Claims which relate to financial services provided by a legal practice on behalf of others who carry on a financial services business.
  • Claims which relate to a managed investment scheme or mortgage financing undertaken by a law practice.
  • Claims which relate to money entrusted to a law practice for an investment purpose unless the money was entrusted to the law practice in the ordinary course of legal practice, primarily in connection with the provision of legal services, and for the purpose of maintaining or enhancing the value of the money pending completion of legal services.
  • Dispute about legal costs charged by a lawyer.  These disputes are dealt with by the Legal Services Commissioner.  For more information, see the What to do when a problem arises page.

If you would like further information on the meaning of ‘default’, or you would like to discuss whether you should make a claim on the Fidelity Fund, please call the Board on (03) 9679 8001 and ask to speak to a Fidelity Fund Officer. Any claim on the Fidelity Fund must be made on an approved form which is available on request from the Board.

Last modified March 2, 2017.