Solo & Small Firm

California Supreme Court Approves Client Trust Account Protection Program

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October 25, 2022

The Supreme Court of California announced today it has approved rules put forth by the State Bar of California to implement the new Client Trust Account Protection Program (CTAPP), which includes new reporting requirements for attorneys. The program is designed to strengthen proactive oversight and regulation of client trust accounts. 

The State Bar Board of Trustees approved rules for the CTAPP at its September meeting.  

After an audit of closed discipline cases against now-disbarred attorney Thomas Girardi, the Board created the Committee on Special Discipline Case Audit in mid-2021. That committee developed the CTAPP, and the full Board approved development of the program in November 2021. 

“We thank the Supreme Court for its quick and decisive action and approval of the State Bar’s Client Trust Account Protection Program,” said Ruben Duran, Board Chair. “The Court recognizes that the State Bar has a duty and an obligation to protect the public, and this new program, which aligns with others already in place in other states, will help us do that. By its design, the CTAPP will help us assist attorneys in complying with client trust account requirements. It will also help us detect and address violations of ethics rules, and, when appropriate, refer attorneys for discipline.” 

In its initial phase, to be implemented for the 2023 license renewal cycle, the CTAPP will require actively licensed attorneys to: 

  • Report annually to the State Bar whether they are responsible for client trust accounts and provide basic account information. Law firms will be able to report account information for lawyers who work for them. 
  • Complete an annual self-assessment that highlights specific rules and requirements for managing a client trust account. 
  • Annually review the applicable Rules of Professional Conduct related to safeguarding client funds and certify to the State Bar that they comply with those rules. 

In future phases, the State Bar will implement steps authorized by the Supreme Court, including risk-based compliance audits.  

The State Bar is also planning both a public education campaign and professional development in support of the program.  
The CTAPP will be housed in the State Bar’s new Division of Regulation, headed by Special Counsel Steven Moawad. The new division advances the State Bar’s public protection mission through the promulgation of rules, laws, and policies addressing licensing, reporting, and registration requirements for California attorneys. Other programs under the division include licensing fees, MCLE compliance, licensee reporting requirements, license status changes, and LLP/Law Corp regulation.  

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