New Client ID Rules

♬ Do I know you
Do I know you…♬

Words and music by: Delon Dotson, recorded by:Realtime.

The New Client ID and Verification Rules are coming into effect across the country. In some cases, they are already in effect. These new Rules place new professional obligations to lawyers to ‘know the clients’ for whom they are acting.

Surveying the implementation of the model rule as put forth by the Federation of Law Societies [PDF] sets forth the following: (all dates taken from the respective Law Society’s web sites):

Newfoundland – Rules came into effect Oct 31, 2008: http://www.lsuc.on.ca/link.cfm?lid=12052

PEI: info not on their website

Nova Scotia: Nov. 3, 2008: http://www.nsbs.org/documents/news/ClientIDPkg.pdf

New Brunswick: Oct 31, 2008: http://www.lawsociety-barreau.nb.ca/emain.asp?WN=1&WN_ID=39

Barreau du Quebec: unable to determine from their web site

Chambre des notaires du Québec: unable to determine from their web site

Ontario: Dec. 31, 2008: http://www.lsuc.on.ca/link.cfm?lid=12052

Manitoba: Dec. 31, 2008: http://www.lawsociety.mb.ca/code_and_rules/rulepdfs/061_Rules_Part5-Draft.pdf

Saskatchewan: Dec. 1, 2008: http://204.83.249.88/NewsDoc/ClientIdentificationSept08.htm

Alberta: Dec. 1, 2008: http://www.lawsocietyalberta.com/lawyerservices/ClientIDVerification.cfm

British Columbia: Dec. 31, 2008: http://www.lawsociety.bc.ca/publications_forms/notices/08-07-31_client-id.html

Yukon: info not on their web site.

North West Territories: to be ratified at the next meeting of the membership at the AGM of the Law Society: http://www.lawsociety.nt.ca/Default.aspx?tabid=70

Nunavut: info not on their web site.

The implementation of the model rules across Canada will place new duties on lawyers to determine the identity and, depending on the nature of the transaction in which they are acting, to verify the documents that are produced to them by way of identification. There are interesting questions to be answered with respect to clients who are offshore, whom you may not meet face-to-face and where you are acting as an agent, in particular.

While the implementation of this Rule will doubtless add to the overhead of lawyers and law firms, the objective of the Rule is a laudable one. Not only does it seek to screen out clients that may wish to use a law firm for purposes of money laundering, it also is an example of the legal profession taking steps to implement rules addressing current issues in a manner that preserves self-regulation and autonomy of the legal profession. The model rules also go a long way towards answering the question as to whether lawyers really do know their ultimate beneficiary of their services.