WHERE DOMINION HAS LED WORLD

Dominion, Volume 28, Issue 108, 31 January 1935, Page 10

WHERE DOMINION HAS LED WORLD

• ♦ Protection For Solicitors’ Clients NEW SOUTH WALES NOW FOLLOWS EXAMPLE Dominion Special Service. Dunedin, January 30. That the New Zealand Law Society, with the assistance of district law societies, has led the world in promoting legislation to protect their clients, was the view expressed by Mr. C. If Calvert, president of the Otago Law Society, when asked to comment on a recent cablegram from Sydney with reference to the introduction by the State Government of a Bill to protect clients against misappropriation. Mr. Calvert said that the Bill passed by the New South Wales Government was based on the New Zealand Act of 1929, and from the cabled summary it seemed to follow that of New Zealand very closely. He explained that it was a Government measure, but it was probably produced at the request of the profession, as was done in New Zealand. The New Zealand Act provided for an annual levy of every practising solicitor to build up a fund to reimburse clients who had lost money through solicitors’ thefts. He stated that it was administered by a _ committee which paid the claims wi'liout the necessity of court proceedings, which was an improvement on the New South Wales scheme. “Since the Act. was passed we have the satisfaction of knowing that ail valid claims have been paid, except those under consideration,” Mr. Calvert proceeded. “The Australian Bill gives power to appoint a committee which can strike offending solicitors off the rolls, and there is also power to conduct surprise audits of trust accounts. Surprise Audits of Trust Accounts. “We have for some years had power to conduct surprise audits of trust accounts, in addition to the regular audits which must be carried out as a matter of course. In New Zealand there have been compulsory audits since 1913, although so far as I know we are the only law society that insists on this obvious precaution. In England a solicitor does not even need to keep a separate trust account, although that has been corjnilsory in New Zealand for 43 years. It is, however, interesting to know that from January 1 of this year practitioners in England must put their clients’ money 'into a separate account. They do not seem even yet to have any jlrovision for auditing and certainly there is no fu.nd available to make good losses through dishonesty. “In Now Zealand we have not. as yet, a disciplinary committee with power to deal with offenders as is proposed in New .South Wales. This is a reform that the profession. here earnestly desires. The present method «of getting rid of a dishonest solicitor is cumbersome, involving application to the Supreme Court in the first instance and later on to the Court of Appeal. The Press sees to it that each appearance is fully reported till the public gets the erroneous impression that there have been several distinct cases of default in each case. “The New Zealand Law’ Society, with the assistance of the District LawSocieties, has led the world in promoting legislation tp protect their clients and it is satisfactory to see that other parts of the Empire are following our lead. The practical effect of the solicitors' fidelity guarantee fund is that clients entrusting money to solicitors are fully insured against misappropriation. while the premiums for such insurance are paid by solicitors themselves.”