Comply with your legal obligations

New South Wales

Rule 8.2.1 of the Solicitors’ Rules provides that:

“A practitioner must retain, securely and confidentially, documents to which a client is entitled, for the duration of the practitioner’s retainer, and at least seven (7) years thereafter, or until such time as the practitioner gives them to the client...or the client instructs the practitioner to deal with them in some other manner.”

Rule 8.5 provides that “documents to which a client should be entitled” will include:

  • Documents prepared by a practitioner for the client, or predominantly for the purposes of the client, and which the client has been, or will be, charged costs by the practitioner; and
  • Documents received by a practitioner from a third party in the course of the practitioner’s retainer for or on behalf of the client, or for the purposes of a client’s business and intended for the use or information of the client.

Clause 89 of the Legal Profession Regulation 2005 and s.264 of the Legal Profession Act 2004 require that most trust records be kept in “permanent form” for seven years after the “last transaction entry in the record”. As some trust records, for example “files relating to trust transactions or bills of costs or both” are required by Clause 89 to be kept for seven years after “finalisation of the matter to which the record relates”, it follows that a prudent practitioner would probably retain all files for at least seven years.

Clause 90 of the Regulation requires that records and other supporting documentation relating to other categories of trust money, including written direction money, controlled money, and power money be kept for seven years. Records of non-trust investment money are also required by clause 90 to be kept for seven years.

Victoria

Rule 7.2.1 of the Professional Conduct and Practice Rules provides that:

“A practitioner must retain, securely and confidentially, documents to which a client is entitled, relating to a particular matter and during the practitioner’s engagement for that matter, and at least seven (7) years thereafter,  until the practitioner gives them to the client...or the client instructs the practitioner to deal with them in some other lawful manner.”

Rule 7.5 provides that “documents to which a client should be entitled” will include:

  • Documents prepared by a practitioner for the client, or predominantly for the purposes of the client; and
  • Documents received by a practitioner from a third party in the course of the practitioner’s retainer for or on behalf of the client, or intended for the use or information of the client, for the purposes of a client’s matter.

Section 3.3.36 of the Legal Profession Regulation 2005 and s.3.3.25 of the Legal Profession Act 2004 require that most trust records be kept in “permanent form” for seven years after the “last transaction entry in the record”. As some trust records, for example “files relating to trust transactions or bills of costs or both” are required by Section 3.3.36 to be kept for seven years after “finalisation of the matter to which the record relates”, it follows that a prudent practitioner would probably retain all files for at least seven years.

Section 3.3.37 of the Regulation requires that records and other supporting documentation relating to other categories of trust money, including written direction money, controlled money, and power money be kept for seven years. Records of non-trust investment money are also required by section 3.3.37 to be kept for seven years.

Another reason to retain records is to guard against professional negligence actions.s.5 of the Limitation of Actions Act 1958 indicates the general limitation period for these is “six years from the date on which the cause of the action accrued”. The cause of action in negligence against a solicitor does not occur, and hence the commencement of the limitation period, until the claimant suffers a financial loss. This can be many years after the file was first closed. For example, in the purchase of real estate, the loss allegedly arising from the purchaser’s solicitor’s negligence may not be sustained until the purchaser attempts to sell the property. If this risk is of concern, you may wish to retain your client files for longer than seven years.

Queensland

Rule 7.2.1 of the Solicitors’ Rules provides that:

“A solicitor must retain, securely and confidentially, documents to which a client is entitled, for the duration of the practitioner’s retainer, and at least six (6) years thereafter... or until such time as the practitioner gives them to the client...or the client instructs the practitioner to deal with them in some other manner.”

Rule 7.5 provides that “documents to which a client should be entitled” will include:

  • Documents prepared by a solicitor for the client, or predominantly for the purposes of the client, and which the client has been, or will be, charged costs by the practitioner; and
  • Documents received by a solicitor from a third party in the course of the solicitor’s retainer for or on behalf of the client, or for the purposes of a client’s business and intended for the use or information of the client.

Clause 59 of the Legal Profession Regulation 2007 and s.261 of the Legal Profession Act 2007 require that most trust records be kept in “permanent form” for seven years after the “last transaction entry in the record”. As some trust records, for example “files relating to trust transactions or bills of costs or both” are required by Clause 59 to be kept for seven years after “finalisation of the matter to which the record relates”, it follows that a prudent practitioner would probably retain all files for at least seven years.

Clause 60 of the Regulation requires that records and other supporting documentation relating to other categories of trust money, including written direction money, controlled money, and power money be kept for seven years. Records of non-trust investment money are also required by clause 60 to be kept for seven years.