LEGAL PROFESSION.

Hokitika Guardian, 31 October 1923, Page 1

LEGAL PROFESSION.

SOLICITORS’ PROCURATION EKE. .MR JUSTICE STRINGER'S REMARKS. AUCKLAND, October 29. Some remarks on ihe practices of solicitor,s in connexion with procuration fees were made by Mr Justice Stringer to-day in tt. written judgment in. respect of a. solicitor's hill of costs. His Honour stated: “AVith regard to the procuration fee. it was contended that this wsti not a proper professional charge and ought not therefore to appear in the solicitor's hill of costs. I agree with this contention. 'lhe procuration fee is tt reward for services rendered in procuring and arranging a loan, but such services, when rendered by a solicitor. are rendered by him ns a commission agent or money broker and should he the subject of nil express agreement, as they do not come within the scope of ordinary professional work. It, appears from valid eflkUivit.s and from what was -tated in the course of argument, bole re. me. that it is the invariable practice for solicitors in Auckland 10 charge, as a. matter of < nurse, u nroevtiavion lee. in addition so' their

ordinary legal charges lor piopuriitiou and completion of mortgage deeds. Jf ?.ttell is really the ease, then f do not, hesitate to express my opinion that there must he numerous instances Where the fee has been improperly exacted from a borrower and where, it propel’ steps were taken, a soliritoi could lie ei/mpclled do rotund the amount of such lee. ’lake tor example the cn.so, I .-.oppose, ol almost daily occurrence. An intending borrower applies for a loan to a person whom be knows to have money for investment. The capitalist agrees to lend the required amount, provided the security ullVrcd is appiovcd by the valuer, "ho is appointed hy him and whose fee for \ aluat ion is paid by lla* l-ori'ower. I lie valuation is satisfactory and the capitalist agiees to make the advatirr and instincts his solicitor to prepare the necessary deeds and to complete the matter, which is duly done, lit such circumstances, what possible right, in reason or in justice, has the. solicitor to exaci from the borrower a procuration fee. in addition to Ins ordinary legal charges? The practice, ns stated

»o exist, is open to serious objection that it must frequently place the solicitor in a position in which his personal interests may conflict with Ids duty to Ids clients. Assume’ the ea v e. wlu ll constantly occurs, of a solicitor who acts for clients who have entrusted him with moneys to be invested oil their behalf on mortgage. An intending borrower submits a gilt-edged set util v and the solicitor agrees, on bohitll ol his client, to lend the money provided a proeeuration fee is paid. Ihe hotrower declines to pay such fee. and

consequently the loan is refused. Here the client loses a desirable investment !-ecuuse the solicitor lias been unable to impose a special fee for Ids own benefit. Again, in similar circumstances, the intending borrower submits doubtful security, but agrees to pay the solicitor a procuration fee and u-c loan is put •through. Here the client is loaded with doubtful security because the solicitor was more concerned to obtain a procuration fee than to protect his client's interests.

-p do not wish to be understood 1 imply that in no eases, and under no circumstances, can a solicitor propel 1> charge procuration fees. 11 a .solicitor is employed to procure a- loan, and bestows time and attention in doing so. no reasonable objection could he raised to his charge as a reward for Ids services. In such case, there is an express, or implied agreement to p tl v a -reasonable or customary tee. The practice, however, of ’charging a. fee ill such circumstances as I have already mentioned is. I think, not only improper, lmt. as far as T know, prevails only in the Auckland district and certainly is not countenanced by the profession in Canterbury and Otago districts with conveyancing practice, with which I ant fairly familiar. I think the New Zealand Law Socetv, m the interests of the profession generally, should take this matter up and should define when, and in what circumstances, it is proper for solicitors to chat go » procuration fee.'’ His Honour added that these obscurations had no application to the case under review, for it bad been found that the client concerned agreed to pav procuration fee for the loan obtained through the instrumentality of the I solicitor.