DEFAULTING SOLICITORS.

Hawera Star, Volume XLVII, 4 May 1928, Page 4

DEFAULTING SOLICITORS.

(To the Editor)

Sir, —Another case of alleged conversion, of over £7OOO of trust xundis by a solicitor agaii draw® attention to the utter futility of the present system _of audit of solicitors’ trust accounts, which audit is no safeguard against dishonesty, as it ns usually impossible for any auditor -to discover defalcation® by tins method until it is too late if the einbezzlmg lawyer simply neglects to pay trust moneys into his trust account and to enter them into hi® trust account books; he is thus able to Jise them for hi® own purposes without detection anil he is hopelessly involved, it is surprising how long-suffering the publio are over this matter. The Government should impose an annual license fee of £25 on every solicitor, and should set up a fund out of these license fees to reimburse embezzled moneys, ,any balance of the fund to belong to the Government. This method would, dn many cases, cast- less than the present useless audit of a sohe-kor’s trust account, and would have the important advantage of providing funds to reimburse those lobbed.

There have been too many sad cases of eldef% men and widows robbed of their money by a dishonest solicitor, persons who are precluded by reason of advanced age or ill-health from earning a living. The legal profession is the closest trade union in the Dominion, and imposes its own- scale of fee® on the publio. An annual! license fee of £25 for a solicitor is a very low one when it is remembered that an auctioneer, has to pay £4O a year. The provisions of a fluid such a® I have suggested should be taken up and insisted on 'by every chamber of commerce in New Zealand. The -solicitor® themselves are unwise in their opposition to the reform suggested, as -under present conditions they are simply drawing a 'ot of .business to the Public (Trustee and the trustee companies.—l am, etc.,

COMMON SENSE.

[At- Christchurch -the first conference of the -legal profession considered the problem presented by defalcations on t-lie par t of soiiictors, and Mr* A. Gray, K. 0., president of the New Zealand Law Society, is about -ten appoint a national committee to go into the question further. The delegates -from the various districts will meet in Wellington and will make recoinmendatioiiQ to -the'New Zealand Law Society. Various plans- are to be considered, one being the suggested formation of a Law Guarantee Corporation, in which every member of the profession will be compelled to- take shares and which will represent a safeguard for the client. A second suggestion is that members of the La%v Society jsti-a.U, pay -a levy along; with their annual fee, and: that this money -shall b© devoted to a fund to be operated upon by a commttee appointed for the purpose.' This fund will defray the expenses of audits which may- be ordered by the committee when any complaint is made to the Law Society that matters a,re not as they should be in the affairs of -a- particular solicitor. Before this course can be followed, however, it will be necessary to obtain amending legislation to the Law Practitioners Act. At present the Act provides- on’y for the making of an annual audit and the Law -Society will have to •ask for the power to make -any audit at any time. Some year® ago the. society had before it a suggestion that it should endeavour to obtain some form of insurance to cover the fidelity of members of the profession, but this did not prove possible. —Ed. “Star.”]