Yellowknife (Oct 15/04) - New territorial legislation could limit the amount of time lawyers are required to hang on to money abandoned by their clients.

A bill introduced by Justice Minister Charles Dent at a committee meeting Tuesday requires clients to claim their money within seven years, or it would be forfeited to the NWT Law Foundation.

Presently, lawyers are required to hold trust money - usually retainers that have not been claimed - indefinitely, which can cause accounting problems for attorneys who are trying to close their practice, Dent told the Standing Committee on Social Programs.

"Lawyers (try) to track down the rightful owners of funds left behind, but because of moves, name changes (and) deaths, it's sometimes not possible," Sarah Kay, President of the Law Society, told the Standing Committee on Social Programs. Law firms in the NWT are currently holding about $23,000 in unclaimed funds, Dent said. The highest single amount is nearly $2,000, but the majority are under $10.

"(This) poses difficulties when a law firm dissolves or when a practitioner ceases the private practice of law," Dent said.

Under the proposed legislation, firms would be required to hold on to unclaimed funds for two years, after which time it would go to the Law Society of the NWT.

The Society would then hold the money for five years before donating it to the NWT Law Foundation.

Several provinces employ a similar system, with the limitation period ranging from five to 10 years. The standing committee agreed to present the bill to a meeting of all MLAs later this month.