SOLICITORS’ TRUST FUNDS.

Hawera Star, Volume XLVII, 23 July 1928, Page 6

SOLICITORS’ TRUST FUNDS.

(To it,bo- Editor.)

Sir,—r-I,t sccnus that the New Zealand I Law Society .has at last taken up the matter of providlimig a -guairajnt'co fund to reimburse the victims of, default in" solicitors, and that it intends to. ibrimg a Bill before the present, session of Parliament to permit the Society itself to set up such a, fund out of an annual fee. to be charged by (the Society to each practising solicitor. I iundoiistainicT that such a scheme was approved by the conference hold by the N.Z. Law Society in Christchurch early this year, and the Bill to be placed before Parliament is the outcome of the deliberations of! a committee of solicitors' appointedl by that conference. This as a j distinct a devalue c from .the legal poor | fessiion’s previous attitude, bu't I conI tend that it will be uittierly wrong in principle for the guarantee fund ho he I fldimiuistered by the profiefiss-ion itiseflif. The fuln id should be adiniSnlistered by hluo State, . and built up by increasing the present annual license fee of a. soll'cntpr from £3 .Is to £23. The Govcrnmienit should then undertake the full liability ho reimburse the Clients of any defaulting solicitor, and .should retain any* surplus a® roveiniup. It will be best for the Go verm meat to 'pay the fees to the Public Trust Office for the first yoatr or so, and ,tiiuS ! provide a special fund of £30,000, which, with interest, accumulations, should be sufficient foir Ithie purpose, but it. should bo made clear that, j subject to the liability to reimburse l the victims of 'misappropriations . the surplus should belong to the State'. I would poinlt out that there have been scarcely any cases of defaulting land agents, and yet the Government requires every land agent to. (a) pay an annual license fee of £lO (as against £3 3s mow'paid by a solicitor), (ib) to have his trulsh account audited annually, . and (c) to .provide a fidelity guarantee policy. Contrast the present annual license fee of £3 3s paid by a solicitor with that paid by am. auctioneer £4O, land agent £lO, barrister £5 ss, and licionsed land broker £5. If the principle adopted by the Legislature in the case of land agents i's correct., it is clearly wrong to allow solicitors to .sot up and administer a? guarantee' fund of theiT awn. If this bo done, the unfortunate victim of a Solicitor's aniisapprapriations will be. put itio further expense in employing another solicitor to iprove his claim on the fund, and in recovering his losses frorri the trustees of that fund. It is not at present'elear whether the proposed Bill Tvill give tho victim any clear right to 'reimbursement, nor is it clear if that reimburse•mienit wall be a (full one, but even if it ■cloes’, I contend that such ’a principle iis wrong, and that the guararutee. fraud Should be administered 'by the State. — Yours, etc.— COMMON SENSE.