What constitutes misappropriation of trust funds?

What constitutes misappropriation and why it is considered so serious, is found in Law Society of BC v. Gellert, 2013 LSBC 22, at paras. 71 to 73: Misappropriation of a client’s trust funds occurs where the lawyer takes those funds for a purpose unauthorized by the client, whether knowingly or through negligence or incompetence so gross as to prove a sufficient element of wrongdoing. As this definition indicates, there must be a mental element of wrongdoing or fault, yet this mental element need not rise to the level of dishonesty as that term is used in the criminal law. In determining whether a lawyer has misappropriated trust funds, it matters not whether the lawyer received any personal benefit from taking the funds. Nor does it matter that the lawyer intended to or did return the funds in short order, that he or she was acting in response to severe personal financial pressures, or that the amount of money taken was relatively small. The definition of misappropriation, and in particular its mental fault element, is driven by a recognition that the proper handling of trust funds is one of the core parts of the lawyer’s fiduciary duty to the client. An unauthorized use of trust funds harms or risks harming the client, undermines the client’s confidence in counsel, and has a seriously deleterious impact on the legal profession’s reputation in the eyes of the public. Because of the sacrosanct nature of trust funds, removing a client’s trust funds is and should always be a memorable, conscious and deliberate act that a lawyer carefully considers before carrying out.