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Trust money compensation from the Fidelity Fund

If you have lost trust money/property due to dishonesty or fraud by a lawyer, you may be eligible to claim back that money from our Fidelity Fund. 

Trust money or trust property is money or property held on trust by a legal practice. 

We can help you if your loss was caused by the dishonest or fraudulent behaviour of:

  • A lawyer
  • An employee/agent/officer/director of a law practice
  • An approved barrister's clerk

What does money 'held on trust' mean?

When a law practice holds money or property on trust for a client or another person, it means that money or property does not belong to them and they must only use it according to their client’s instructions. Trust money is usually deposited into a special bank account, called a trust account. However, money may still be ‘trust money’ even where it is not banked into an official trust account, if it is given to a law practice while it is acting in a person's legal matter. 


  • A common reason to put money into a trust account is when you are asked to pay a holding deposit to secure the purchase of property, e.g. an ‘off-plan’ apartment.
  • Another common reason a lawyer might hold trust property is when they are hired to assist with distributing the proceeds from a person's will and estate.
  • A lawyer may receive money on your behalf from another party for a court matter.
  • A lawyer might also ask you to deposit money into their trust account to pay for future legal fees.

A lawyer's trust account is not the same as their own business bank account.

Who can claim?

Anyone who has given trust money or property to a law practice or approved barrister's clerk, or had money held on their behalf, and believes they have lost that money or property as a result of dishonest or fraudulent behaviour by a lawyer or other officer of the law practice. 

How to make a claim?

Call us on 1300 796 344 to speak with a Fidelity Fund Officer.

They will talk to you, and if they think we can help, they will provide you with a claim form to complete.

You may be asked to provide evidence of your loss, such as documents or statements to support your claim.

We may not accept your claim without supporting evidence.

What time limits apply?

You must tell us of your alleged loss of trust money or property within 6 months of becoming aware of it.


Where money is given to a law practice for:

  • investment (unless the law practice received the money while it was providing legal services, and the money was to be invested to increase its value until the legal matter was completed (e.g. placed in an interest-bearing account opened by the law practice called a ‘controlled money account’).
  • managed investment schemes or mortgage financing undertaken by a law firm (e.g. money entrusted to a lawyer to invest in mortgages).
  • legal services which have been provided (Refer to Complaints for information about how the VLSB+C can assist with disputes about legal costs).
  • financial services where an Australian Financial Services Licence was  required (e.g. a lawyer is selling an insurance policy), or where the lawyer/law practice was an authorised representative of others who carry on a financial services business.

There may be another, more appropriate way for you to recover your loss, such as speaking directly with the lawyer involved or commencing proceedings against the lawyer for professional negligence, or against another person if they received your trust money from the law practice. We may ask you to try this before making a claim with us. We will let you know as soon as possible if you need to do this and what you need to do. 

It may also be that these other ways to pursue your loss may give you a better outcome than a fidelity fund claim, as the fund can only return to you the trust money you have lost, not any other losses that may have resulted from the default.

We will review your claim, conduct an investigation, and make an assessment. We may ask you for more information if needed. We will consider your compensation claim and make a decision if it should be paid, partly paid or not paid and explain why.

Common reasons for not paying a claim include:

  • the money which is the subject of your claim is not trust money (e.g. because it falls within one of the categories listed under “what claims are not accepted”)
  • there is no evidence the lawyer acted dishonestly (e.g. because they made a mistake, or because it cannot be shown what you told them to do with the money)
  • you were involved in the act or omission which gave rise to the claim
  • your negligence contributed to the loss
  • the circumstances surrounding the transaction with the law practice were illegal and you were aware that the activity was illegal, or should have known
  • you were aware that thorough or detailed records of the transaction were not maintained or where destroyed, or 
  • you have unreasonably refused to disclose information or to cooperate with the investigation. 

We may also investigate the wrong doing of the lawyer or law practice from a disciplinary or criminal perspective, and an investigator may contact you as part of that investigation.

There is no limit to how much you can claim in compensation, as long as you are only claiming the amount of trust money that you say the law practice has failed to pay you.

Where we find a claim is payable, we will assess the information and decide on the amount to pay you.

If your claim is paid, we will pay you interest on your loss. This is calculated from the time you made your claim up until the time we finalised your claim.

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