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What is a statutory deposit account?
Law practices and approved clerks that are required to maintain a trust account in Victoria must deposit a specified amount of money with the Victorian Legal Services Board, out of any trust money that has been received by the law practice or approved clerk. The money is held by the Board and is repayable on demand.
The Board is required to maintain a statutory deposit account (SDA) into which it must deposit the monies. The account is maintained within the Public Purpose Fund held by the Board.
Opening a statutory deposit account
When the Board receives a notification of a new trust account, the Board will request Commonwealth Bank of Australia to open an SDA to be linked to the trust account of the law practice or approved clerk.
Requirement to deposit with the Board
A law practice or approved clerk that is required to maintain a trust account must deposit money into the SDA out of the trust money received by the law practice or approved clerk.
The amount required to be deposited is calculated by the Board for each quarter, in accordance with a formula detailed in section 79 of the Legal Profession Uniform Law Application Act 2014.
Failure by a law practice to deposit the required deposit amount may constitute unsatisfactory professional conduct or professional misconduct on the part of any principal of the law practice.
How to deposit into a statutory deposit account
You can make the quarterly deposit by transferring funds from your trust account to your SDA through the Board’s online portal, LSB Online. You can only do this if you have completed the Direct Debit Request form and returned it to the Board. To make the transfer online, log in to LSB Online and follow the prompts.
- Write out a cheque from your trust account payable to the ‘Victorian Legal Services Board – <name of your law practice> statutory deposit account’.
- Hand your cheque to the Commonwealth Bank of Australia (there may be a fee if a deposit is made at any other bank). Ensuring you have written on the back of the cheque the SDA BSB and Account number.
- The bank will give you a receipt of your deposit.
- Your deposit will be credited to the SDA.
- The Board will send you an email or post statement the following business day confirming the deposit and the total amount that you hold in the SDA.
- Please contact the Board if you have not received an email or post statement by noon the following business day after your deposit.
Repayment by the Board
Amounts deposited with the Board into the SDA of a law practice, or an approved clerk, are repayable on demand to the practice’s or clerk’s trust account.
If an amount is repaid from the SDA to a law practice or an approved clerk and subsequently there is a sufficient amount in the practice’s or clerk’s trust account to cover the required deposit amount, the law practice or approved clerk must deposit the required deposit amount back with the Board.
How to withdraw from a statutory deposit account
Withdrawals from the statutory deposit account must be made through the Board’s online portal, LSB Online. All withdrawals must be made online.
You will be given your LSB Online login details and instructions for using the online service when you notify the Board of the opening of a new trust account. Please contact the Board if you did not receive the login details. Only authorised users can withdraw funds from a statutory deposit account.
Confirmation of transactions
After any statutory deposit or withdrawal is made, the Board will send an email or post statement to the trust account holder the following business day confirming the total amount held in the SDA.
All trust account holders will receive SDA statements annually, regardless of whether a statutory deposit or withdrawal has been made.
Failure to adjust statutory deposit account
The Board monitors trust account balances and will advise a law practice or an approved clerk when an adjustment to the required deposit amount into the SDA is necessary.
If there is a particular reason why an additional deposit cannot be made (e.g. insufficient funds, unpresented cheques), a law practice or approved clerk must nonetheless obtain an exemption from the Board.
Where there is a failure to deposit the required deposit amount into the SDA or to obtain an exemption from the Board, the matter may be referred to the Victorian Legal Services Commissioner who may investigate whether there has been unsatisfactory professional conduct or professional misconduct on the part of a legal practitioner.
Exemptions from statutory deposit provisions
If you are unable to deposit the required deposit amount into the SDA, you may apply for an exemption by completing an online application through LSB Online.
Improvements to the application process have recently been made. It is now more user-friendly, providing clear guidance so that we get the information we need to make a prompt decision about an application.
- In most cases a decision about the application will be provided immediately
- If a recalculation of the amount to be deposited is required, notification will occur immediately
- It’s expected 90 per cent of applications will be given an immediate response - meaning SDA obligations are completed in one session
- If an application needs to be assessed by a decision maker, that option is still available.
View the Board’s policy on statutory deposit account exemptions below.
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