"A LEAD TO THE WORLD"

Press, Volume LXXI, Issue 21386, 31 January 1935, Page 10

"A LEAD TO THE WORLD"

SAFEGUARDING TRUST ACCOUNTS NEW SOUTH WALES FOLLOWS NEW ZEALAND SYSTEM [THE PRESS Special Service.} DUNEDIN, January 30. That the New Zealand Law Society, with the assistance of the district law societies, has led the world in promoting legislation to protect their clients was the view expressed by Mr C. L. Calvert, president of the Otago Law Society, when he was approached by a reporter and asked to comment on the recent cablegram from Sydney about 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. Mr Calvert explained that it was a Government measure, but that it was probably produced at the request of the profession, as was done in New Zealand. The act in New Zealand provided for an annual levy on every practising solicitor to build up a fund to reimburse clients who had lost money through theft by solicitors. "Since the act was passed we have the satisfaction of knowing that all valid claims have been paid, except those under consideration," Mr Calvert proceeded. "The Australian bill gives the 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. We have for some years had the 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," said Mr Calvert. "In England a solicitor does not even need to keep a separate trust account, although that has been compulsory in New Zealand for 43 years, but it is 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 provision for auditing, and certainly there is no fund available to make good losses through dishonesty.

"In New Zealand we have not as yet a disciplinary committee jvith power to deal with offenders, as is proposed in New South Wales. This is a reform that the profession here earnestly desire. 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 di3t : nct cases of default. In each case, the New Zealand Law Society, with the assistance of district law eorieties. has led the world in promoting legislation to protect their clients, and it is satisfactory to see that other parts of the Empire are following our lead. The practical effect of thf solicitors' fidelity guarantee fund i? that clients entrusting, money to solicitors are fully insured ' against misappropriation while the premiums for such insurance are paid by the solicitors themselves," concluded Mr Calvert.