Like all people in Canada, lawyers are subject to the Criminal Code, but they are exempt from the Proceeds of Crime (Money Laundering) and Terrorist Financing Act due to solicitor-client privilege.  

Lawyers must comply with obligations imposed the Rules and Code to ensure they are not facilitating money-laundering and terrorist financing. These rules and regulations help prevent crime and maintain public trust in the justice system.  

These regulations also protect the public’s right to independent legal counsel and ensure solicitor-client privilege.  

No. Identification and verification are separate but related concepts. Identification requires gathering information about the client, while verification of identity is the process of confirming that the client or third party is who, or what, they say they are.  

Identification refers to the basic information in Rule 119.47 that you must obtain and record with the applicable date about your “client” (widely defined in Rule 119 (h)) at the time that you are retained to provide legal services. You can obtain the information by phone, in a form that you ask the client to complete, by email, by video conference or other means of communication.  

If your client is an individual, you must obtain and record with the applicable date:   

• the client’s full name;  
• home address and telephone number;  
• occupation; and,   
• the address and telephone number of the client’s place of work or employment, where applicable.   

If your client is acting for or representing a third-party individual, you must also obtain the above information from the third party.   

To assist in complying with the above requirements, consider using the Law Society’s Client Identification and Verification form.   

If your client is an organization, you must obtain and record with the applicable date:   

• the client’s full name, business address and business telephone number; 
• the organization’s incorporation or business identification number and the place of issue of its incorporation or business identification number, if applicable; 
• the general nature of the type of business or businesses or activity or activities engaged in by the client, where applicable; and,  
• the name, position and contact information for the individual authorized to provide and give instructions to the lawyer with respect to the matter for which the lawyer is retained.  

If your client is acting for or representing a third-party individual, you must also obtain the above information from the third party.   

Rule 119.46(b) requires this additional information unless the organization is a “financial institution,” “public body” or “reporting issuer” as defined in the Rule.  

To assist in complying with the above requirements, consider using the Law Society’s Client Identification and Verification form.   

You must identify any individual or organization who has retained you to provide legal services. If your client is acting for or representing a third party, you must obtain identification information about the third party.   

If the client or third party is an organization, you must also identify each individual that is authorized to give instructions on behalf of the organization with respect to the matter for which you are retained. If you are also engaged in or giving instructions in respect of the receipt, payment, or transfer of funds, you must identify the directors and beneficial owners of the organization.  

Some limited exceptions to the requirement are set out in Rule 119.46 (3).   

Subject to limited exemptions, you must identify your client or third party whenever you are retained to provide legal services. Lawyers are exempted from completing identification of their clients if they:   

• are in-house and corporate counsel since they only provide legal services to their employers; 
• provide legal services through a duty counsel program, except when giving instructions for receiving, paying or transferring funds; and/or,  
• act as an agent for another lawyer or when a matter is referred by another lawyer (provided the other lawyer has complied with the identification and verification requirements). 

Verification involves confirming that your client is who they say they are by using one of the verification methods in Rule 119.50(6). When client verification is required, you must also obtain and record information about the client’s source of money for the financial transaction.   

If the client is an organization, you must verify the identity of the individual instructing you on the organization’s behalf and obtain and record the information required by Rule 119.50 (11) (b).   

Some exceptions to the requirement are set out in Rule 119.49.   

No. There are several exceptions included in Rule 119.49.   

You do not have to verify the identity of the client (nor obtain and record information about the source of funds for the financial transaction) if:    

• the client or third party is a financial institution, public body, or reporting issuer;    
• the funds are transferred using an “electronic funds transfer” as defined in the rules; or,   
• the funds used in the transaction are:    
  • received for professional fees, disbursements, or expenses;    
  • paid by or to a financial institution, public body, or reporting issuer;   
  • received from the trust account of another legal professional;   
  • received from a peace officer, law enforcement agency, or other public official acting in their official capacity;    
  • received to pay a fine, penalty, and/or bail; or,    
  • transferred by a wire transfer.  

It is important to note that if a client’s matter involves more than one financial transaction and there is an exemption from the verification and source of funds obligations with respect to one of the transactions, the other transaction(s) will be subject to the obligations unless there are exemptions that apply.   

There are three methods for verifying the identity of individuals, where applicable:    

• Government-issued Photo ID: Verifying that the identification document is authentic, valid and current. This can be done either:  
  • In-person (when the individual is physically present): The lawyer or their agent (see below for more information on the use of agents) may view the original document in the presence of the individual to ensure that their name and photograph match.  
  • Virtual (via technology platform):The lawyer or their agent may virtually confirm a client’s identity using a digital authentication and verification technology, which allows clients to provide a digital copy or image to authenticate their identity. 
• Credit File Method: Credit file must be in existence for at least three years and obtained directly from the credit bureau; may be done without the individual being present.    
• Dual Process Method: May be done without the individual being present – refer to any two of the following from a reliable source: information that contains:   
  • the individual’s name and address;    
  • the individual’s name and date of birth; or,    
  • the individual’s name and confirmation of their account with financial institution.  

The Rule requirements may be fulfilled by you, or any partner, associate or employee at your firm. However, the client’s lawyer is ultimately responsible for ensuring the requirements are fulfilled.  

This exemption is meant to cover a financial institution’s own funds, for example those advanced pursuant to a mortgage or loan agreement. Cheques, whether regular or certified, bank drafts or other forms of payment that are provided by anyone other than the financial institution directly on its own behalf, are not included in the exemption.   

For the exemption to apply, the financial institution must be a bank regulated by the Bank Act, an authorized foreign bank, a credit union or trust company or must otherwise meet the definition provided in the rule.  

No, there is a difference between identification and verification.    

Identification refers to the basic information you must get about your client to know who they are whenever you are retained to provide legal services.  Information must be obtained and recorded, with the applicable date, including the client’s name, address, phone numbers, and occupation.     

Verification refers to the information you must obtain to confirm that your client is who or what they say they are. Verification is required only when you are acting for a client or giving instructions on behalf of a client regarding the receiving, payment or transferring of funds (i.e., a financial transaction).    

Yes, as per Rule 119.50 (6), one piece of Government issued ID that is authentic, valid and current is sufficient for client verification.  

Yes. There is no exemption when monies are paid pursuant to a court order. You will have to verify the client’s identity and obtain the source of funds information unless another exemption applies  

If you are required to identify your client or any third party, then you must obtain the information required by Rule 119.47. However, where a client or third party is unable to provide the information (for example, where they have no address because they are unhoused or have no occupation  because they are unemployed), you should record these facts and, assuming there are no concerns of fraud or other illegal activity with respect to the client or the retainer, you may continue to act for the client.   

This situation should be distinguished from one in which your client refuses to provide the information required to comply with the identification requirements. In these situations, you should explain to the client, using clear and easy to understand language, that all lawyers are required to ask clients for this information, and the information is needed to properly represent and protect the client’s interests and rights.  

If the client still refuses to provide the required identification information, you must advise the client that failing to obtain this information puts you in breach of your professional obligations and, as a result, you cannot act or continue to act for them.

There is a difference between identification and verification:  

• Identification refers to the basic information you must get about your client to know who they are whenever you are retained to provide legal services.     
• Verification refers to the information you must obtain to confirm that your client is who or what they say they are. Verification is required only when you are acting for a client or giving instructions on behalf of a client regarding the receiving, payment or transferring of funds, i.e. a “financial transaction”.    

There are several exceptions included in the rule. You do not have to verify the identity of the client (nor obtain and record information about the source of funds for the financial transaction) if:    

• the client or third party is a financial institution, public body, or reporting issuer;    
• the funds are transferred using an “electronic funds transfer” as defined in the rules; or,   
• the funds used in the transaction are:    
• received for professional fees, disbursements, or expenses;    
• paid by or to a financial institution, public body, or reporting issuer;   
• received from the trust account of another legal professional;   
• received from a peace officer, law enforcement agency, or other public official acting in their official capacity;    
• received to pay a fine, penalty, and/or bail; or,    
• transferred by a wire transfer.  

The temporary relaxation of subrule 119.50(6) ended on Dec. 31, 2024 and all Alberta lawyers will be required to follow the new Rules. This means that if you meet a client via videoconference, you are required to verify your client’s identity using verification technology and follow the procedures of that technology to confirm the ID is genuine. The technology can compare the ID to known characteristics, security features or markers to determine if it is authentic.  

The Federation notes that “A document is authentic if it is genuine and has the character of an original, credible and reliable document.” Guidance has been developed by the Federation to further elaborate on this definition and provide examples of the differences between the two methods of verification. Please review this guide to see the differences between virtual and in-person verification.    

The Law Society does not vet or endorse vendors or their products. There are several reputable companies that offer products that use authentication technology to verify identity in accordance with the virtual verification method.   

To assist individuals and organizations in identifying such solutions, the Digital Identification and Authentication Council of Canada (DIACC) has developed a certification process for providers. DIACC “is a non-profit coalition of public and private sector leaders committed to developing a Canadian framework for digital identification and authentication”.    

Lawyers can seek providers with this certification as a starting point when exploring digital authentication and verification technology options.  

Vendors’ fees to verify an individual’s identity vary (e.g. from around $4 to $25 per individual). Some offer a pay-as-you go service with no onboarding costs.   

While there is a cost involved in using a company to perform digital authentication, lawyers are not required to use this method of verification. Lawyers may still choose to verify client identification in-person.   

Lawyers need to ensure that the identification provided is authentic, in accordance with the Rule.   

Lawyers may continue to review and verify original personal identification documents in the presence of the client or use an agent when the client is not present in the lawyer’s office.  

Lawyers may also continue to use one of the other two methods of verification (dual-process and credit file) provided for in the Rules.  

Lawyers should be aware of their verification technology provider’s security and data retention policies. Some retain the data for days or years, and it could be retained outside of Canada. While other vendors do not retain the data; the data is retained entirely by the lawyer for a period determined by the lawyer or law firm.    

The role of the Innovation Sandbox is, in part, to find areas of the Rules and Code that, when relaxed, support the safe and innovative delivery of legal services in Alberta. The change in the Rules that allows for the digital authentication of identification is exactly what the Innovation Sandbox was designed to identify and address.     

As a result of these Rule changes, Innovation Sandbox participants who offer digital verification technology already comply with the Rules. After January 1, these service providers operate outside the Sandbox without continued oversight from the Law Society. Currently, all digital authentication providers in the Innovation Sandbox either have DIACC certification or are in the process of applying for it.