Law Society to review fidelity fund

Press, 4 June 1988, Page 8

Law Society to review fidelity fund

PA Auckland The Law Society says it will review its fidelity fund after coming under public scrutiny over a case in which a lawyer stole his client’s money. It placed a large advertisement in daily newspapers this week outlining its situation over the plight of a Waikato farming couple'who, frustrated by attempts to retrieve the stolen money, aired their story on the consumer television programme, “Fair Go.”

At issue was whether Graham and Trish Little should have been paid out

of the Law Society’s fidelity guarantee fund. Last week the couple got an out-of-court settlement for $118,612 after a two-year battle with lawyers and the bank involved in the High Court action.

The society had said that payment could not be made through the fidelity fund until the High Court determined if the lawyer, Richard Hughes, stole the money in his capacity as a lawyer. It also made the point that no formal request was ever made for an advance on the fund

which has $1.3 million in it. The Law Society’s vicepresident in the Auckland region, Mr Bob Eades, said it was possibly only the second time in the 58 years of the fund that such a case had been raised. He conceded it made many lawyers throughout New Zealand unhappy. “They feel that the Little case presented the legal profession in a particularly bad light,” he said.

“A lot of lawyers reacted without even knowing what the fund was, but

maybe the others are justified in complaining about how they have come out of it.” The Criminal Bar Association has also asked the society for an explanation of how the Little case became a crisis; A four-member committee, chaired by Mr Eades, will examine the fund section of the Law Practitioners Act to decide whether any submissions need to be made to the Minister of Justice, Mr Palmer, for amendment. “We may have a sociological duty to amend the act,” Mr Eades said.