FIDELITY GUARANTEE.

Otago Daily Times, Issue 20917, 6 January 1930, Page 8

FIDELITY GUARANTEE.

LAW PRACTITIONERS ACT. PROTECTION FOR THE PUBLIC. (Special to Daily Times.) WELLINGTON, January 4. Important pioneering legislation enacted last session at the instance of the New Zealand Law Society with the object of affording protection to the public against the loss of trust moneys through the dishonesty of solicitors came into operation on New Year’s Day, and the fidelity guarantee fund which the legal profession has voluntarily undertaken to build up for the, purpose of off-setting possible defalcations will grow automatically as meni. bers take out their annual practising certificates. Commenting to-day on the coming into force of the Act, the president of the New Zealand Law Society (Mr A. Gray, K.C.) pointed out that probably other countries will not be slow to follow New Zealand’s example. , Briefly the Act, styled the Law Practitioners’ Amendment (Solicitors’ Fidelity Guarantee Fund) Act establishes a fund not to exceed £100,000; to be administered by the New Zealand Law Society, consisting of annual contributions paid by solicitors practising in New Zealand. Out of it will be met claims by persona who suffer pecuniary loss through the theft by a solicitor or his servant or agent of any money or property which may be entrusted to his care in the course of his practice. The Council of the Law Society has fixed £5 5s as the annual levy to be made immediately on practising lawyers for the purpose of the fund. Under the regulations published last month the Council of the Law Society has appointed a committee of management consisting of Mr A. Gray, K.C. (president), Mr C. H. Treadwell (vice-president). Mr P. Levi (treasurer), all of Wellington; Mr A. H. Johnstone (Auckland), and Mr M. J, Gresson (Christchurch). “The new Act is tbe outcome of a long discussion by members of the legal profession in New Zealand,” stated• Mr Gray in an interview this morning, “ and it is welcomed by the profession as a whole as an earnest of the desire of its members to provide a means of indemnifying clients who may be unfortunate enough to misplace their confidence in an adviser who may not be worthy of that confidence The number of practitioners who in the past have been the measn of drawing public attention to the occasional misappropriation of trust funds has, fortunately, been very limited, and jn view of the large amount of moneys entrusted to lawfers those who are best able to judge consider it is only just to say that by comparison with other professions and occupations, the profession of the law has attained and maintained a very high standard in this country. New Zealand is not the only country in which speculations by lawyers have sometimes occurred, and it is believed that this Dominion is the first country in the Empire to take active steps to ensure the confidence of the public in the members of an old and honourable profession. Already in some parts of Australia and in England the idea of a compulsory audit of solicitors’ trust accounts, a system which was adopted in this country by Statute in 1913, has attracted the attention of leaders of the legal profession, and it is more than probable that the New Zealand system of compulsory audit will be adopted. The recent provision in the shape of the estab. lishment of a solicitor’s’ guarantee fund in New Zealand has also created a great deal of interest ih Australia, and Mr T. M. Wilford, the new High Commissioner for New Zealand, who had charge of the Bill during its passage through the House of Representatives, intends'to-take every opportunity of promulgating the provisions of the new Act amongst members of the profession in England. It is quite reasonable, therefore, to expect that in the course of time the Law Society-of England will adopt some such measure as New Zealand has pioneered.” Mr Gray pointed out that the Act does not apply to solicitors who are not in practice on their own account, such as persons in the Government employ or the like. It was expected that a sura of between £6OOO and £7OOO would be provided for the fund in the first year. That, of course, would be repeated in the second and succeeding years, and if, as seemed probable, the number of practising solicitors still continued to increase, the fund would also grow proportionately. In addition to the sum which it had been decided to levy there was the safeguard ?f the further levy which might be made if by any chance circumstances should require it. In conclusion, Mr Gray expressed indebtedness on behalf of the legal profession .to those who had assisted in the passage of the Bill.