Poverty Bay Herald. PUBLISHED EVERY EVENING. GISBORNE, MONDAY, APRIL 1, 1929 LAW GUARANTEE FUND

Poverty Bay Herald, Volume LV, Issue 16914, 1 April 1929, Page 6

Poverty Bay Herald. PUBLISHED EVERY EVENING. GISBORNE, MONDAY, APRIL 1, 1929 LAW GUARANTEE FUND

The cases of defaulting solicitors before the Courts in the last few years have caused the members of the legal profession as well as the general public, a great deal of concern, and the solicitors themselves, realising the gravity oil such cases, have for sonic .time past been considering very seriously the ways and means by which both the public and the honest members of the profession can best, be protected against the black sheep whose dishonesty is seriously undermining public confidence. That; the motive behind tho.se who are actively engaged in attempting to arrive at a solution of the problem is not entirely altruistic will be readily admitted by all members. of the profession, for it is not those clients who suffer monetary losses at the hands of the defaulter who sustain'the greatest loss, great as that loss may be. This is felt throughout the years by those practitioners who faithfully uphold the best traditions of their profession, for the public cannot lie expected to differentiate between, the honest and dishonest lawyer, and consequently many clients are driven .to the legal department operated by the State to the detriment of the private practitioner. That .the percentage of defaulters among the ranks of practising solicitors is no greater than that among any other body of men whoso duties include the handling of trust funds or moiieys is certainly true, but the public is entitled to expect a greater degree of honesty among those who are admitted to the ranks of the profession than from those who have not the traditions of that profession to uphold. Excuses such as these "that admission to the profession is too easily obtained," "that .the defaulters are mostly inexperienced in their profession," '" that State interference has been indirectly responsible," are beside the point. It is the undoubted opinion of the great, body of solicitors that the time has arrived when the profession itself must take action to protect themselves and their clients. New Zealand is not alone in this respect, for in England and elsewhere in the Empire the same problem is exercising the minds of those who have the welfare of the profession at heart. Bearing in mind the fact that our judges and magistrates are drawn from the members of that profession, it is distinctly in the public interest that the standard of the profession be retained at its highest pitch, but at the present time the profession offers so little to its memoors in comparison with the prospects of a successful commercial career that the best brains of the country will not be attracted thereto. While the Law Practitioners Act and its amendments arc supposed to protect the public and the profession generally it is well known that the Act does not function successfully. The compulsory audit provisions have proved themselves totally incapable of preventing defalcations, and the sums paid by solicitors . throughout the Dominion annually for useless audits would more than cover all clients' losses. Individual expressions of opinion among the profession in all parts of the country led to concerted action being taken by the District Law Societies some two years ago, when the matter was discussed at length and various suggestions of a remedial nature were made. The problem formed one of the chief items for, discussion at the first Legal Conference held in Chi istchurch during Easter of 1928. As a result a Bill to amend the Law Practitioners Act was promoted with the object of establishing a "Law Guarantee Fund," for the purpose of reimbursing to clients of solicitors' pecuniary losses sustained by such clients by reason of the misappropriation involving dishonesty by such solicitors of moneys coming to their hands or entrusted to them in the course of the practice of their profession, including moneys entrusted to them as trustees in the course of such practice. The principle of the Bill was that each practising solicitor should pay annually, in addition to the usual practising fees paid by him, a xurther sum towards the creation of a fund wherefrom clionts would be reimbursed their losses. In addition to enabling exceptional defalcations to be covered, each solicitor was to be liable to contribute in instalments a further amount up to £IOO should necessity arise. To bo successful such a scheme roquirod to

be n compulsory one ami the sanction of Iho Legislature was consequently sought. It was not anticipated that there would be any difficulty in obtaining the required amendment to the Law Practitioners Act for the .Bill involved a tax upon lawyers only and was certainly in the interests of the public generally, though it was naturally expected that the Hill would bo received with :i certain amount of suspicion in some quarters. Contrary lo expectations, the Government of the day declined to take the Bill up as a Government measure, and the Hill was introduced privately through the Legislative Council, by which it was passed, but on reaching the Lower House it suffered the fate of so many private members' Bills and was shelved. Those clients who suffer loss during this present year as a result of solicitors' defalcations will know whom lo blame for their losses, and there is no doubt but that the impression, rightly or wrongly created in the minds of many solicitors, that the Government of the day feared that the creation of a system of guarantee to the clients of private practitioners might adversely affect the operations of the Public Trust cilice, which works in direct, competition but under ■State guarantee (for which the State, by the way, gets no return) contributed largely to the feeling of dissatisfaction with that Government expressed at the hist general elections. It is obvious that the matter cannot be allowed to rest; the profession must either offer (he public security or many go out of business. The second Legal Conference is to be held in Wellington this week, when it'is expected that one of the principal items of business will be the discussion of a remit from Canterbury which reads: "That this conference urges the New Zealand Law Society to do all in itspower lo ensure that the amendment of the Law Practitioners' Act BIOS, dealing with a solicitors' guarantee fund, he passed into law at the first available session of Parliament." It is, of course, lor Parliament to see I hat the rights of the public are protected, bur the punishment of a defaulter is no solace to the individual suffering perhaps a very heavy pecuniary loss, neither is it any satisfaction to the honorable practitioner who suffers recurring loss of business. and whose profession is debased. .Any genuine attempt by the profession itself to provide such security at its own cost should meet with general approval and support, and in these days when State assistance or subsidy is usually demanded by almost every organisation' desirous of remedying some disability under which its members labor, the entire absence of any such element in the proposals should materially increase the degree of favor bestowed by a paternal Government.