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Client Identification and Verification Requirements

COVID-19 UPDATE: Lawyers and paralegals with questions about how to comply with the client identification and verification requirements in the context of COVID-19 should consult the Law Society’s Frequently Asked Practice Management Questions regarding COVID-19.


Lawyers and paralegals are obligated to know their clients, understand their client’s financial dealings in relation to the retainer, and manage any risks arising from the professional business relationship. Subject to limited exceptions, Part III of By-Law 7.1 requires lawyers and paralegals to follow client identification and verification procedures whenever they are retained to provide legal services.

Effective January 1, 2022, Part III of By-Law 7.1 was amended. The client identification and verification requirements now include six main elements: 

  1.  Identification. Obtaining basic identification information about the client and any third party that the client is acting for or representing.
  2. Verification. Verifying the identity of the client or third party where the lawyer or paralegal is engaged in or giving instructions in respect of the receipt, payment, or transfer of funds (a “financial transaction”). Additional steps are required when verifying the identity of minors and organizational clients.
  3. Source of Funds. Obtaining source of funds information from the client where there is a financial transaction.
  4. Monitoring. Periodically monitoring the professional business relationship with the client when retained in respect of a financial transaction that is ongoing.
  5. Record Keeping. Recording and retaining all information acquired during the identification and verification process.
  6. Withdrawal. If at any point while retained, including while obtaining identification and verification information, withdrawing from representation if the lawyer or paralegal knows or ought to know that they would be assisting in fraud or other illegal conduct.

In addition to reviewing Part III of By-Law 7.1, lawyers and paralegals may wish to consult and/or use the Law Society’s resources to assist them with understanding their obligations and applying the requirements to their client matters. The Practice Management Helpline is also available to support licensees. More detailed information is provided below.

Resources

Overview of Requirements

Defined Terms and Examples

Frequently Asked Questions

Forms and Precedents

Red Flags Worksheet, Risk Assessment Case Studies and Risk Advisories

CPD Program

The New Anti-Money Laundering Requirements: What You Need to Know Before January 1, 2022 - delivered by webcast on November 12, 2021, and accessible on-demand.

By-Laws and Rules

Convocation Materials

Support

For questions relating to a lawyer or paralegal’s obligations to identify or verify the identity of a client or third party, licensees should contact the Law Society’s Practice Management Helpline at 416-947-3315 or toll free 1-800 668-7380 and select the option to connect with the Helpline.

Last Updated: January 1, 2022

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