Refund Procedure – For client Funds held in a COLTAF account in error.
Unexpected delays in distribution of a particular client’s funds held in a COLTAF account for reasons beyond the control of the lawyer or law firm may result in interest earned in the COLTAF account which should be the property of the particular client, if the amount of earnings produced from the particular client’s funds exceed the costs associated with having established a separate trust account for the benefit of that client. In the event that this situation arises, the lawyer or law firm shall request a refund of interest from COLTAF, and shall expeditiously provide such refund to the client.
Refunds under these circumstances will be requested from COLTAF as follows:
- The lawyer or law firm shall determine, with the assistance of the bank holding the COLTAF account if necessary, the exact amount of interest that the client’s balance earned during the period held in the COLTAF account.
- The lawyer or law firm shall send a letter to COLTAF, signed by the lawyer responsible for the client relationship in question, stating that an error has occurred, and providing COLTAF with (a) the name and number of the COLTAF account, (b) the amount of the account balance(s) on which the client should have earned interest, (c) the date(s) of deposit and withdrawal(s) of the client’s balances, and (d) the calculated amount of interest earned by the client’s balances, and requesting a refund of the interest remitted to COLTAF that should have been remitted to the client.
- COLTAF will verify that earnings received were sufficient to cover the refund, and that the amount of interest requested to be refunded is accurate. If either the earnings it has received are insufficient, or the calculation cannot be reasonable verified, COLTAF will notify the lawyer in writing. Otherwise, COLTAF will mail a refund check to the lawyer or law firm, with a cover letter reminding the requesting lawyer or law firm of the obligation to file appropriate I.R.S. reports concerning the refund.