OPSI - UNENACTED working proposal v308 | 2026-10-28T08:15:16+00:00 | Corpus 85 DRAFT ORDER REGULATION REGULATION RESPECTING THE TRUST FUNDS COMPENSATION FUND I - ESTABLISHMENT AND ADMINISTRATION Section 1 | ART_P50NN01R1MRJCFF4 | Version 4 This regulation is made by the board of directors under section 89.1 of the Professional Code and approved by the Office under section 95.2, in accordance with the applicable publication requirements. Under section 89.1 of the Professional Code, the Order must compensate eligible claimants where a lawfully authorized member misappropriates funds entrusted in professional practice. This Regulation proposes a compensation fund separate from professional liability insurance. A proposed fund is neither funded coverage nor an effective permission to receive advances. Compensation becomes operational only when the cumulative prerequisites in sections 3 and 16 have been satisfied and trust-advance authorization under section 40 of the Act and the trust-accounting regulation has lawfully taken effect. Section 2 | ART_R3326YB5BK6GWFRH | Version 3 The compensation fund, if established under section 89.1 of the Professional Code, maintains the separate accounts and statements required by its regulation and by law. It may be constituted from amounts lawfully allocated to it by the board out of the Order’s general fund, duly prescribed special contributions, recoveries, investment income and eligible insurance payments. Amounts legally paid into the compensation fund thereafter remain reserved for its proper purposes; their eligibility is not excluded solely because of their former accounting source in the Order’s revenues. Section 3 | ART_TN9EH8RFKFJU2A75 | Version 4 Before allowing any trust advances, the board commissions documented independent analysis tailored to PSIs, examining plausible advance volumes, engagement duration, maximum and average balances, concentration per holder, diversion scenarios, control effectiveness, extreme loss cases, actually available insurance and resources needed for timely compensation. The board then introduces, through a regulatory amendment subject to required approvals, a minimum reserve or verifiable funding guarantee, contribution sources, replenishment rules and, if caps are chosen, maximum amounts per claimant and per member together with pro-rata allocation for competing claims. Numerical parameters cannot be imposed by administrative resolution or copied from notaries without evidence of relevance; no cap becomes effective merely by appearing in this consultation draft. Once lawfully constituted, the assets of the compensation fund remain dedicated to its purposes and protected under the applicable regulation. Its commitments and actual compensation capacity must be established before the prohibition on new advance payments may be lifted; the general fund may contribute to its capitalization when lawfully authorized. Section 4 | ART_294QDQJ374FW2GVN | Version 2 The board establishes a competent independent compensation committee whose members take the oath of discretion required by section 89.1 of the Code. The committee receives and investigates claims and makes recommendations; the board delegates decision-making only under an express delegation authorized by law. Members disclose conflicts and recuse themselves where required. II - CLAIMS AND DETERMINATION Section 5 | ART_ZC8XG9180JZ7FU4D | Version 2 A claimant applies in writing, identifying the member and retainer and providing evidence of payment, agreed purpose and alleged loss. The Order assists with reasonably accessible evidence without demanding impossible records. Section 6 | ART_R890K3KEPTT1JP4L | Version 2 A claim is filed as soon as practicable after discovery of a diversion, without prejudice to statutory limitation periods or other mandatory deadlines. No deadline in this Regulation shortens a right under the Code. Claimants are advised of applicable periods and given reasonable time to supply missing evidence. Section 7 | ART_41MJLGBC0DJVWN0X | Version 2 The secretary acknowledges receipt within fifteen business days, identifies missing evidence and sends the complete file to the committee. The committee may obtain required trust ledgers, bank records and other information by lawful means. An initial decision is normally made within ninety days of a complete file; any extension is explained and notified with a new target date. These proposed administrative timelines do not remove statutory remedies. Section 8 | ART_UEUL6VHUJURUNLZD | Version 2 The member or representative may respond to the extent permitted by law without receiving unrelated confidential material. The claimant receives essential reasons for an adverse decision and information on legally available review. Section 9 | ART_H9RUJA3WMS509DVF | Version 2 The committee verifies that money was entrusted in a professional services matter, unauthorized use occurred, the net loss and prior recoveries. Professional negligence that does not constitute misappropriation is addressed through other liability remedies. Section 10 | ART_AD0D0SKBDDYAGF61 | Version 2 The board, or a committee lawfully delegated to decide, makes a written reasoned decision on eligibility, net loss, the award and payment terms subject to any effective limits expressly prescribed by regulation. Where competing claims against one member exceed a valid aggregate cap, allocation is pro rata as required by section 89.1 of the Code. This draft does not represent that funded coverage currently exists. Section 11 | ART_HL4B3HZGL497T8WK | Version 2 The fund prevents double recovery by accounting for compensation already received for the same loss where legally permitted. Settlements respect the rights of claimants and third parties. III - PAYMENTS, RECOVERIES AND ACCOUNTABILITY Section 12 | ART_ZZWXS1UE6LXSC6K9 | Version 2 To the extent of payments, the fund exercises available subrogation and recovery rights against responsible persons. Recovered amounts return to the fund. Section 13 | ART_YUUYCQDX54L07P1B | Version 2 Decisions remain subject to review and appeals provided by the Code and other applicable law; this Regulation does not extinguish statutory remedies. Section 14 | ART_U6KXFHHG90YL09MU | Version 2 The committee maintains a confidential file containing evidence, decisions, payments and recoveries. Authorized users comply with confidentiality and relevant access logging. Section 15 | ART_ENVW9MTUQ32X3J20 | Version 2 The Order publishes aggregate annual claim counts, payments, recoveries and fund resources without identifying claimants or exposing protected information. Section 16 | ART_LN0MR0ZP6UC14N4R | Version 4 Actual authorization to hold trust advances remains suspended until all of the following conditions are met: (1) trust-accounting and compensation regulations lawfully approved, published and in force; (2) effective regulatory provisions based on documented evidence setting minimum resources, contributions and, where adopted, caps and allocation rules; (3) funded reserves or verifiable guarantees actually available with separate accounting; (4) a competent committee and operational claims process; (5) effective banking controls, audit, logging and restitution arrangements; and (6) a published, reasoned determination by the Order supported by independent financial certification that all requirements are fulfilled. If financial or control capacity becomes inadequate, the Order immediately suspends new authorizations and new advances until protection is restored, without prejudicing client money already lawfully received or claimants’ rights. No unsubstantiated reserve is represented as funded. Contributions from the general fund are subject to analytical allocation and detailed accounting reconciliation, without exclusion based on the source of revenue. Net trust-account interest follows the separate route under section 40 of the Act.