Which bank charges in an attorney’s trust account are recoverable from the
Attorney Fidelity Fund?
Monthly basic fee
Some banks charge a minimal monthly fee, sometimes described as an administrative fee.
This fee is recoverable from the Attorney Fidelity Fund (AFF).
Cheque processing fee
Banks charge a fee for processing each cheque issued. The fee is a banded structure
dependant upon the quantum of each cheque. This fee is recoverable from the AFF.
Electronic payment fee
The banks charge a fee for processing each electronic payment. The fee is a banded
structure dependant upon the quantum of each payment. This fee is recoverable from the
Cheque books issued by banks
The cost of cheque books supplied by the banks is recoverable from the AFF.
Electronic payments systems – monthly subscriptions
The four large banks offer sophisticated electronic banking systems. In addition to the
normal per item processing fee, clients are charged a monthly subscription. In many
instances the banks levy a single subscription to cover services provided on both the trust
and business banking accounts. To date, practitioners have been advised to do their own
apportionment of the subscription based upon the respective volumes of trust and
business transactions; the trust portion being recoverable from the AFF.
Unidentifiable deposits – tracing fees
Practitioners often experience a problem identifying deposits made over the counter into
their trust accounts by unknown entities. The banks charge a fee when assisting
practitioners to establish the source of these funds. Some banks offer a system which
requires depositors to complete the reference section on the deposit slip correctly, for a
monthly additional fee (payable by the recipient). This fee is recoverable from the AFF.
Dishonored cheques deposited in a trust account give rise to an R80 service fee charge to
the recipient’s trust account in each instance. This fee is recoverable from the AFF.
The banks charge for each guarantee issued. The established practice by business
development staff is to advise practitioners that the cost of guarantees should be
recovered from clients. This fee is NOT recoverable from the AFF.
Special clearance of cheques deposited
Practitioners wishing to pay out against the proceeds of cheques deposited to their trust
accounts often instruct their bankers to “specially clear” certain deposits. This process
enables practitioners to pay out against a deposit within a few days instead of having to
wait for the normal period of 10 days. This fee is NOT recoverable from the AFF.
Bank charges specifically related to handling cash
During the past 3 years the banks have significantly increased their charges for
transactions involving the handling of cash. This has had a significant impact upon
certain practitioners who are obliged, because of the nature of their practices, to pay out
and receive large amounts of cash.
The reason advanced by the banks for these increased charges is that the cost of
providing security arrangements has escalated dramatically. The banks’ stated intention
with regard to their charging structure is to match their charges as closely as possible
with their expense structures. This fee is recoverable from the AFF.
Cash deposit fees
Cash deposits are expensive. For example, R10 000 cash deposited in certain banks’ trust
accounts will incur a fee of R59. There are reported instances of clients in conveyancing
matters arriving with suitcases of money. It is arguable whether the cash deposit fee is
incurred at the special instance of the client – cash is regarded as legal tender. On the
other hand, the introduction of FICA money laundering legislation would support a view
that cash should no longer be regarded as an acceptable payment medium for high value
A further factor to consider is that certain banks charge a “penalty” cash deposit fee if
large volumes of cash are deposited without advance warning to the branch concerned.
Some practitioners have adopted a policy to advise clients that the firm does not carry a
sufficient level of insurance cover to be able to receipt large amounts of cash. Clients are
instructed to deposit the cash directly into the firm’s trust account; the cash deposit fee to
be paid separately over the counter by the client. Cash deposits are generally recoverable
from the AFF.
Over the counter cash withdrawals incur a fee in addition to the normal cheque
processing fee. A cheque cashed for R10 000 will incur a fee in the region of R90, as well
as a cheque processing fee of R12.
Practitioners often need to cash cheques in situations where the client has no banking
account. MVA matters are a good example. This fee is recoverable from the AFF.
However, note that all Law Societies Rules prohibit the issue of trust cheques payable to
Foreign Exchange Transactions
Commission on foreign exchange transactions
Banks charge a commission for converting currency to another denomination. This fee is
NOT recoverable from the AFF.
Fees payable for foreign exchange applications
The Reserve Bank and the commercial banks may charge fees for processing applications
for foreign exchange, in situations where funds are being remitted to a foreign payee.
This fee is NOT recoverable from the AFF.