Avoiding Unclaimed Funds in Litigation and Estate Practice

Every day of the week, five British Columbia court proceedings will see funds that were paid into court become unclaimed.

Those funds are then transferred to the BC Unclaimed Property Society. Over the course of the twenty-three years of BC Unclaimed’s operations, that is nearly 28,000 unresolved court cases with cash left on the table—or rather—in the court registry. 

As a legal professional, how do you make sure these monies don’t belong to your client? How do you meet your ethical obligations to self-represented opposing parties so that their funds do not become unclaimed?

Monies that are paid into court, remain inactive for at least five years and are determined to be unclaimed court funds by a judicial officer will be transferred to BC Unclaimed. These funds are paid pursuant to orders from all levels of courts. Unclaimed funds from the Supreme Court are typically balances from foreclosures, overpayments on garnisheeing orders, and bequests paid into court by an executor who could not find the beneficiary. From the BC Provincial Court, we frequently see unclaimed restitution payments, and from the Court of Appeal for BC, funds that were paid in advance of an appeal as security for costs.

Below we provide tips to avoid unclaimed funds:

Estates

If you are acting for an estate, and an heir or beneficiary cannot be found, consider asking for an order that unclaimed funds be paid directly to BC Unclaimed, as opposed to an order to pay the sums into court. This will eliminate the five-year inactivity period for the funds to become unclaimed and eliminate the need for the beneficiary to obtain an order for payment out. It will also increase the likelihood that BC Unclaimed can find the heir. The sooner we can search, the better the chance for reunification. The bequest will be entered into BCUnclaimed.ca, enabling the beneficiaries to find the funds. It is free to search a name on our website, and there is no limitation period for claiming.

Foreclosures and Collections

If you act for a creditor, and the opposing party is self-represented, there is a higher level of care required in exercising your duty of fairness, courtesy, and good faith. Recognize that you may be dealing with an individual traumatized by the proceedings, particularly in foreclosures. Because of the emotions and anxiety generated by the circumstances and logistics of finding a new home, clear communication is essential. The debtor needs to be informed that a balance may be payable. You can maintain your professional boundaries by confirming your role, while sharing the process to check with the Court Registry at the end of the proceeding, for funds remaining. This procedural information should be verbal, and in writing, at the earliest opportunity and repeated as the opportunity presents. Once the debtor is out of the property, there may not be further opportunity to inform them as they may not attend court proceedings or leave a forwarding address either with the court registry or yourself as the legal professional. These funds can be a lifeline for a struggling family.

Criminal Proceedings

Similarly recognizing the potential for trauma, Crown counsel should clearly inform victims of crime, both in writing and verbally, on how to collect on a restitution order—by checking periodically with the court registry. Victims should also be informed of the importance of keeping their contact information current on the court file and how to do that.

Family and Civil Appeals

While it may seem obvious that monies paid into court for costs should be collected by the successful party, we receive thousands of dollars in unclaimed costs each year. Typically, a self-represented party pays funds into court as security for costs before proceeding with an unsuccessful appeal. Costs are then owed to the successful party, who in our observations, are often represented by counsel, but the costs are not paid out and become unclaimed.

It may be due to the protracted nature of the appeal that these are overlooked, or there may be other case-by-case reasons. However, a file checklist used to record when costs are paid into court, including a closing review for payment out, might prevent those monies from being left behind. These costs can be substantial, and the successful party is surprised when we advise them that thousands of dollars remained for them to claim.

Law Firms – General

From time to time, we also receive funds that are apparently payable to law firms. As for all potential owners, we send letters advising that we are holding funds to which they may be entitled, and we do not always receive a response. We tend to receive funds for law firms when they have been in litigation themselves, including fees recovery. It is free to search on our website and takes seconds of your time to see if monies are owed to your firm.

For law firms that advise not-for-profits, small businesses, or associations on business matters, or provide wills and estates services, advising your client to search BC Unclaimed for assets is a simple gesture of goodwill that could result in the recovery of hundreds or thousands of dollars for your client. Many organizations have had funds go dormant in a secondary credit union account.

Benefit Business and Communities

If you advise organizations that hold unclaimed funds, they need to know their obligations under B.C.’s Unclaimed Property Act. They may be relieved of those obligations by transferring the unclaimed assets to BC Unclaimed. 

Only BC Unclaimed can put those funds to work in communities across B.C. through our partnership with Vancouver Foundation. If your client cares about good governance and making a social impact, working with us to utilize unclaimed funds for public good is a painless way to amplify their goals. At the same time, transferring funds to BC Unclaimed provides the owners with a new chance to have their funds returned. See our website for more information about this partnership.