SOLICITORS’ TRUST FUNDS.

Otago Witness, Issue 3870, 15 May 1928, Page 31

SOLICITORS’ TRUST FUNDS.

TO THE EDITOR. Sir,--In view of statements which have recently appeared in the press drawing attention to reports of cases of misappropriation by certain solicitors of their clients money, and suggesting ths establishment by members of the legal profession of a guarantee fund, by means whereof a client would be protected from the loss which he might otherwise sustain through the defalcation of a dishonest practitioner to whom he had entrusted his money, it seems desirable to state that proposals to that end have for T tlme r been under consideration by .u ew . Zealand Law Society and by the district law societies throughout the •Dominion.. Various schemes have been proposed, including one for the creation of a fund by the subscription to it by every practising solicitor of either an annual sum or (under one of the schemes) of a fixed amount, the accumulations of which would be available for the restitution of misappropriated moneys. A better system of audit has also been proposed, in substitution for the existing annual audit under Government regulations, so that the council of every district law society should be empowered to direct an audit at any time or times of the books or any solicitor practising in its district if it had reason to suppose that such a step was necessary or desirable. To enable the district councils, which are elected in each district annually by the practitioners of that district, to carry any of these proposals into effect, and to exercise closer supervision over their brethren, legislative authority is necessary, and Bills containing the suggested legislation have been prepared and discussed by the various societies. Naturally, the proposals have met with some opposition, especially from some of the older practitioners, who, not unreasonably, dislike the notion that the honest many should be required in a sense to guarantee the possibly dishonest few. At the recent conference of lawyers held at Christchurch, however, the subject was fully discussed, and a resolution was adopted approving the principle of establishing a solicitors’ guarantee fund. It was also resolved to set up a committee representative of the New Zealand Baw .Society and all the district law societies, for the purpose of considering the various schemes and formulating a scheme which should become practicable by the force of legislative authority. Steps are now being taken to carry these resolutions into effect, and it is' hoped that a scheme may be evolved for incorporation in a Bill to be submitted to Parliament which, if passed into law, will ensure clients against such losses as have recently been brought under public notice and which have generally been associated with the. doings of young lacking in experience and judgment — I am, etc., A. Grat. President N.Z. Law Society. Wellington. May 8.