FIDELITY FUND.

Auckland Star, Volume LXIV, Issue 98, 28 April 1933, Page 5

FIDELITY FUND.

SYDNEY SOLICITORS. \ MINISTER TAKES ACTION. FOLLOWING N.Z. EXAMPLE. (From Our Own Correspondent.) SYDNEY, April 22. During the past twelve months in Sydney there have been many cases of fraud and embezzlement on the part of solicitors and trustees. This particular offence has been extremely prevalent of late, partly because so much money has been left locked up in legal hands, awaiting investment, and largely because no effective safeguard against such contingencies has yet been devised. Now at last the Minister of Justice has announced that he proposes, the establishment by solicitors of a fidelity guarantee fund, which, by making this most important class ot' trustees, to some extent, mutually responsible for one another's conduct, will give the investing public a certain measure of protection. Presumably the amount of J the contribution levied from each solicitor would be proportioned to thfc I amount of business done; otherwise the i younger lawyers would soon be driven out of practice. But in some form or other, Mr. Martin's proposal seems to have met with general approval. New Zealand's experience would suggest that a periodic audit of solicii tors' accounts would prove an effective safeguard. But here it is thought to be impracticable. "A number of the larger firms," it is said, "have their own auditors, who are employed throughout the year and a tremendous staff would be necessary if the Government were to undertake such a task." This is possibly true, and the additional cost to clients should also be taken into consideration. But the judicial records of the past few years show that some such precautions are already long overdue, .and the lawyers ought to be as glad as the geneial public that the steps indicated by Mr. Martin are to be taken at last.