To: THE HONOURABLE THE ATTORNEY GENERAL
In your letter dated 15th November, 1966, you asked that the Commission give consideration to proposals made by the Council of the Law Society of New South Wales for the amendment of the Legal Practitioners Act. Copies of the two draft bills submitted by the Council (which are dated 26th April, 1966, and 20th July, 1966) are forwarded herewith.
The Commission notes your advice that the only policy decision made by you is in relation to the questions of interest on solicitors’ trust accounts and legal assistance. It is assumed that the provisions of the draft bills submitted by the Council in relation to these matters do not call for any comment, and that the preparation of the necessary draft bill to carry your policy decisions into effect will be carried out by the Parliamentary Draftsman.
Several of the remaining proposals do involve policy questions and your suggestion that the Commission might see fit to comment on matters of principle has been considered. The Commission has all times exercised the greatest care to concern itself only with strictly legal problems. You have already indicated your agreement with the Commission’s considered view that it should not in any way intrude into the field of policy. However, in the special circumstances of this case, where the draft bills are concerned with the conduct and control of the members of the legal profession, the Commission is prepared to make an exception. In the comments that follow, reference will be made no matters of this type, but it is desired to emphasise that on all questions of policy, the Commission offers its comments only because it is dealing with a special fields of which it has particular knowledge and that such comments are intended only for the assistance of the Government ultimately determining the final questions which will still remain for its consideration.
By the way of a preliminary comment it is desirable to invite attention to some matters which involve difficulty. The Legal Practitioners Act is ancient in origin and has been added to and amended on a number of occasions so that it is now a rather untidy piece of legislation which will be made much more untidy if the Law Society’s proposals, whether or not varied in accordance with the Commission’s recommendations, are accepted. There is need for a complete revision of the whole of this Act, and the Commission recommends that consideration be given to establishing an expert committee drawn from both branches of the profession who will be charged with the duty of preparing a complete re-draft of an Act which will meet present day needs. The Act deals (inter alia) with the qualifications for admission of barristers or solicitors, and, in this regard, attention is invited to the fact that the basic approach to tertiary education has been and still is undergoing a change, and that provision will be required to meet the new types of tuition which will be offered at Universities throughout New South Wales in the near future. Similarly consideration should be given to the period and the nature of the service to be rendered under articles of clerkship. Here again no decision can be made until a proper appreciation is first obtained of the facilities for tertiary education so that academic training and practical training might be woven as part of the one pattern.
However, it is desired to emphasise that the above-mentioned proposal must not for one moment be taken to suggest that there is not an urgent need for legislative attention to be given to the matters referred to in the draft bills prepared by the Council of the Law Society. These matters should not be set aside until a complete overhaul can be made of the whole of the provisions of the Act. As will appear later, several of the matters proposed in the draft bills have been rendered necessary by recent developments within the profession. As to these, the evils are manifest and the legislative remedy should be prompt.
In considering your request for advice as to the matters dealt with in the draft bills, the Commission desires to point out that the Parliamentary Draftsman will presumably desire, so long as the immediate action proposed is to introduce an amendment, to follow the general pattern and language of the existing Act. Because the settlement of any final draft must necessarily be a task undertaken by the Parliamentary Draftsman, the Commission has not paid attention to cases where languages has been used which appears to require revision. The Commission has thought that matters of form do not require comment by it.
Where the Commission has thought it desirable to recommend that a particular proposal made by the Council of the Law Society be not accepted, consideration has been given to suggesting a more suitable alternative to meet a situation which may exist. But here again it is desired to emphasise that the Commission’s proposals set out the substance of the views it has formed, and it is not desired that these be taken as suggested final drafts. They are intended rather to indicate to you the Commission’s recommendations as to the nature of a provision which should be made, and to leave it to the Parliamentary Draftsman to reduce these suggestions into the appropriate form in due course.
It is desired to add that the provisions of the drafts bills, generally speaking, relate, with one major exception, to securing the interests of the public and the better control both of members of the profession and unqualified persons. The aims of the Council, in regard to these matters, are to be praised. Its proposals are fair and objective, and there can be no suggestion of self-interest. The exception referred to is to be found in the part dealing with bills of costs. While these proposals are not unreasonable, and there is a real need for re-examination of many of the provisions of the Act in this regard, these matters are separate and distinct, and it seems convenient to deal with them apart from the other matters referred to. The comments of the Commission thereon are set out in appendix “A” to this report.
It is proposed to deal now with the provisions contained in the draft bills. Comments will not necessarily be offered in respect of each paragraph of each clause but the subject matter will be dealt with under appropriate headings as far as conveniently may be.
PRELIMINARY DEFINITIONS
Clause 3 - para. (a)
This proposal relates to restricting the definition of “barrister” to those who practise as such. The Council desires to restrict the activities of non-practising barristers, who might undertake work normally performed by solicitors.
The Commission considers that any such restriction is not desirable. The control exercised by the Court over non-practising barristers provides adequate safeguards.
The representatives of the Council adhered to the view originally expressed but the Commission does not recommend the proposal.
Clause 3 - para. (b)
This is formal and unobjectionable.
Clause 3 - paras. (c) and (d)
These paragraphs propose amendments to the definition of “University graduate”. The Commission is of the view that it is not appropriate to continue a definition of the type contained in the Legal Practitioners Act at the present time. It had its origin in 20 Vic. No 14 which, of course, was passed over 100 years ago. It refers only to graduates in the faculties of arts, law or medicine. This may well be due to the fact that faculties such as commerce and economics did not exist in the days when the provision was framed. Moreover, with the establishment of new universities such as Macquarie University and the University of Newcastle, new and changed courses and faculties will probably be established. The Commission is of the view that it is unnecessary to define this expression in an Act of Parliament, particularly because changes in tertiary education are now taking place and will doubtless continue to take place. The Commission recommends that the definition of “University graduate” in section 3 of the Act be amended to provide that “University graduate” means “a person who has taken a degree in any faculty of any university which may from time to time be prescribed by Rules of Court”. The representatives of the Council agree with this.
PART III
Clause 4 - para. 1
The Council proposes that section 13 of the Act dealing with certain exemptions for university graduates be repealed and replaced. Here again the original section had its origin in an Act passed over 100 years ago. It is quite inapt to meet present day conditions. It exempts a university graduate desirous of being admitted as a solicitor from passing any examination other than law, and limits the period of service under article of clerkship. The first portion of the section seems quite out of touch with modern ideas. It may well be that many faculties of law, and possibly even the Admission Boards, will require students, whether graduates or non-graduate, to study non-legal subjects as, for example, Philosophy, Logic, History or English.
This Commission takes the view that the only purpose which may be served by this section is to limit the period of articles of clerkship which a graduate may be compelled to serve. At the present day, a graduate in the prescribed faculties (other than law) may be required to serve not more than 3 years articles, whilst a graduate in law is required by the rules at present in force to serve only 2 years articles.
It may be doubted whether the retention of any part of this section serves any purposes whatever but if it is thought desirable to maintain a statutory right for a graduate to serve a relatively short period of articles, it is recommended that the existing section be repealed and that it be enacted, in lieu thereof, as follows:
“No University graduate who is desirous of being admitted as a solicitors shall be required to serve under articles of clerkship for more than 3 years".
In conclusion, the Commission desires to invite attention to the fact that section 8 deals with the same subject matters as section 13, and consideration might be given, at some stage, to making a corresponding amendment to section 8.
Clause 4 - para. 2, and clause 5
These proposals relate to the provisions of the Act dealing with conveyancers and to the repeal of such provisions. This proposal is recommended for adoption. No new certificates to practise as conveyancers have been issued since 1935. Inquiries indicate that there are only three persons on the Roll of Conveyancers in New South Wales. Two of these are employees of the Public Trustee, who are also solicitors and have qualified practising certificates. The third is a lady who is married with a family, who has not practised for many years and does not appear likely ever to do so.
The conveyancer has become an anachronism. The sooner he is abolished the better.
Clause 4 - para. 3
This clause also proposes an amendment which would affect the position of barristers and distinguish between practising barristers and non-practising barristers. The distinction is one which cannot be justified. In this regard reference might be made to the report made by Sir Leslie Herron, Chief Justice of New South Wales in March of last year where he expressed the view that no alterations should be made to the present law in this regard. With this view the Commission respectfully agrees. It is recommended that this proposal be not accepted. In any event, the Commission is of the opinion that if a review of these provisions is warranted, it should be left until such time as a complete review of the Act is made.
Clause 4 - para. 4
It is proposed by this clause of the draft bill that a new sub-section be added to section 14 of the Act. It relates to barristers who have, on their own application, been removed from the Roll of Barristers and who desire to practise as solicitors. The proposal is that the Court be given power to admit such persons as solicitors, but upon such terms and conditions as it thinks fit. In ex parte Denniston (73 W. N. 136) this course was adopted by the Full Court as being proper and desirable. Some doubts have been expressed since the decision in this case as to whether a power exists in the Court to impose terms. The purpose of this paragraph is to give legislative sanction to what the Court has thought proper and desirable and has in fact been doing for the last 10 years. The Commission recommends that this proposal be adopted.
Clause 4 - para. 5
This paragraph proposes that section 15 of the Act be replaced by an entirely new section. The existing section limits the right of audience in courts in New South Wales to proceedings in which the solicitor in question or his partner acts as a solicitor. The proposal of the Council of the Law Society is that all solicitors whether partners or employees of the solicitor acting in the matter shall be competent to appear and have the right of audience in all courts.
This matter has been discussed with the representatives of the Council. The Council adheres to its view that the proposal is reasonable and desirable. The Commission takes the view that the proposed change is not warranted. At the present time it is only a principal in a firm of solicitors who may appear. He as solicitor must hold the scales so as to give due weight to his duty to the Court, as an officer of the Court, and to balance this duty with his duty to his client. The Council’s proposal would, in the view of the Commission interpose a third duty to which the solicitor would be subject, namely his duty as an employee to his master solicitor. The Commission is unable to accept that the interposition of this third duty might not place an employed solicitor in a real difficulty in deciding where his duty lies. Although it is perhaps to be regretted that this is a matter upon which the Council and the Commission cannot agree, the Commission has concluded that the circumstances are such that it is obliged to recommend that this clause be not adopted.
PART IV
UNQUALIFIED PRACTITIONERS
Clause 7 - para. 1
This paragraph proposes an amendment to section 30. As drafted it seems to do more than extend the prohibition already contained in section 40A and section 67. This is not necessary as section 40 merely defines who is to be regarded as an “unqualified person” within the meaning of the Act. The proposed amendment is accordingly considered to be unnecessary.
It is therefore not recommended. There is, however, an obvious amendment which might well be made. Section 40 (b) refers to a person who has in force a practising certificate “after 30th June, 1935”. This provision was inserted by Act No 12 of 1935. The fact that over thirty years have intervened makes it unnecessary to retain in the section any reference to the date mentioned.
Clause 7 - para. 2
These amendments propose increasing prescribed penalties from £50 to $400. The Council’s request seems reasonable and is recommended.
Clause 7 - paras. 3, 4, 5, 6, 7, and 8
In these paragraphs amendments are proposed to meet a situation which has proved to require attention.
Generally speaking a person is forbidden to perform legal work for any fee unless duly qualified. The Commission is informed that at least one instance has occurred in relation to a solicitor struck off the rolls for misconduct in recent times, where the former solicitor has offered to perform non-legal work, and made a charge ostensibly only in relation to the non-legal work. Thus under the guise of carrying out non-legal work, he obtains a fee which in fact remunerates him for performing legal work. The Council’s representatives acknowledged that difficulties are created in endeavouring to frame an amendment to cover this position. It is understood that many attempts have been made to devise a suitable solution and that the proposal made in these paragraphs is the best that the Council has been able to devise.
The Commission recommends that action be taken to overcome this problem although it is not satisfied that the drafting is all that could be desired. According the Commission has attempted to produce a more satisfactory and specific provision to meet the situation and alternative clauses to replace sections 40C and 40D of the Act are attached as appendix “B”. The Commission proposes that the draft prepared by the Commission be referred to the Parliamentary Draftsman for his consideration as to which of these alternatives (or some amalgamation or some other form) is the most suitable.
Clause 7 - para. 9
This proposal again relates to an increase in monetary penalties and seems to be satisfactory.
Clause 7 - para. 10
This clause as prepared by the Council was designed to cure an error which is said to have occurred in relation to provisions dealing with arrangements for sharing profits which existed on the 24th January, 1935. Upon inquiry the representatives of the Council agree that there are no longer any such cases in existence. The lapse of over 30 years has ceased to make this provision of any importance whatever. Accordingly it is recommended that the proposed clause be not adopted but that subsection 3 of section 40F be repealed.
Clause 7 - paras. 11 and 13
These proposed amendments are designed to correct what is an obvious omission and are recommended.
Clause 7 - paras. 11 and 13
Having discussed with the representatives of the Council the purpose of these paragraphs, the Commission has come to the conclusion that it is not desirable to introduce provisions of the kind mentioned at this place in the bill. The proposals deal with a limitation upon the right of a solicitor, without the consent of the Statutory Committee, to employ persons who have been convicted of offences against the Legal Practitioners Act. Although the Commission has come to the conclusion that such a provision should be mad, it does not seem that this is the proper place in the bill so to do. This subject matter dealt with is covered by appendix “C” to this report dealing with the employment by solicitors of convicted and unqualified persons.
Clause 7 - para. 15
This proposed amendment deals with an increase in penalty and seems unobjectionable.
Clause 7 - para. 16
It may be doubted whether this proposed amendment is really necessary but as it will clear up doubts which have existed from time to time is recommended that the proposal be adopted.
PART VII
TRUST ACCOUNTS
Clause 8 - paras. 1 and 2
These paragraphs propose amendments to section 41 of the Act. The section at present requires that monies received by a solicitor on behalf of some other person shall be paid to a trust account. Sub-section 2 provides that the monies in such a trust account shall not be available for the payment of the debts of the solicitor, to any other creditor of the solicitor, or be liable to be attached or taken in execution under the order or process of any court at the instance of any such other creditor.
If in fact a garnishee order is issued by a court attaching the moneys of that solicitor held to the credit of his account with a bank, the bank is required, under the terms of the existing legislation, to freeze all accounts of the solicitor including any account which may be a trust account. This is because it remains for the court to determine whether the solicitor’s account is in fact a trust account or not.
The Council desires to vary this rule. This subject is a difficult one and it is by no means easy to provide a solution.
The Commission is not satisfied that the Council’s proposal would be effective and is not prepared at present to suggest an alternative. The proposal is not recommended.
Clause 8 - paras. 3, 4, 5, 6, 7, and 8
These provision deal with interest on solicitors’ trust accounts and are the matters upon which you have indicated that a policy decision has already been taken. The Commission is unaware of the details. Accordingly no comment is offered in relation to these paragraphs.
Clause 8 - para. 8A
This paragraphs proposes an entirely new procedure for the appointment of a trustee of the trust property of a deceased solicitor. In a later part of this report dealing with receivership of solicitor’s trust property, a proposal is made which is wide enough to cover the type of case mentioned in this proposed clause. Accordingly it is unnecessary to give it further consideration. The adoption of the clause is not recommended.
PART VIII
THE SOLICITORS’ FIDELITY GUARANTEE FUND
Clause 9 - para. 1
This paragraph proposes that section 45 be repealed and a new provision substituted. The original section applies Part VIII to all solicitors who are engaged in the practice of their profession either on their own account or in partnership. Doubts have been expressed as to its application to such persons as solicitors employed in the Public Service who hold full practising certificates. The purpose of the proposed section is to release from the application of this part of the Act (and thus from liability to contribute to the Fidelity Fund) solicitors who do not receive hold or disburse moneys on behalf of clients. The proposal is reasonable and is recommended.
Clause 9 - para. 2
This clause proposes a new section 47A to give the Law Society power to insure the Fidelity Fund against particular liabilities. It does no more than confer a power. If some obligations of the Fund can be insured against it may be a very desirable thing. Accordingly the proposal is recommended.
Clause 9 - para. 3
Under section 49(e) the Council is given power to pay out of the Fund expenses incurred in exercising the authorities conferred upon the Council by Part VIII or Part X. It is proposed that the Council shall have power also to pay out the Fund the expenses incurred in exercising the powers and authorities conferred by Parts VIIIA (Receivership of Solicitors’ Trust Property) and Part XI (Miscellaneous). It seems perfectly proper to include a reference to Part VIIIA. However, Part XI contains many miscellaneous provisions. The Commission considers that the only provisions of Part XI which should be included are those dealing with the conduct of inquiries under new provisions which the Commission will propose later in this report (proposed new section 82A) and the exercise of the power conferred upon the Council by section 82. The other amendment proposed by this paragraph is only to clear up doubts and is recommended.
Clause 9 - para. 4
This paragraph proposes that section 52 be amended to delete the prescribed maximum and minimum which may be required to be paid by a solicitor to the Fidelity Fund. The Commission is informed by the representative of the Council that the present maximum of 10 in one year is hopelessly inadequate and accordingly it seems impossible to refuse the Council’s request. Whether the Government considers that some maximum should be fixed, may be a different question. There is doubtless something to be said for this view. A limit might well be placed upon the powers of the Council. But it is impossible to forecast the future, and it seems reasonable to suppose that the Council will perform its duties fairly and reasonably. Upon this basis any further restriction is unnecessary and the proposal is recommended.
Clause 9 - paras. 5 and 6
These paragraph propose amendments to the language of section 52. They do not make any change in substance. They seem preferable to the existing provisions. The proposals are recommended.
Clause 9 - paras. 7 and 8
These proposals deal with money matters. In view of the above comments, no further comment is necessary. The proposals seem reasonable and are recommended.
Clause 9 - paras. 9, 10, 11, 12, and 13
These paragraphs propose amendments to section 57 of the Act dealing with claims against the Fund. It is undoubted that the present provisions unnecessarily restrict the Council in its desire to make prompt payments from the Fund to persons who have been defrauded. The general purpose of the amendments is to free a claimant from the need to exhaust his legal remedies against a defaulting solicitor before his claim can be met and to provide that if a claimant has been paid out of the Fund and later makes recovery, then he shall repay any monies so recovered to the Fund or, if he has not obtained payment in full, his rights shall abate to the extent of the monies so received. It is to be noted, however, that the proposed new sub-section 3 of section 57 is intended to replace the existing sub-section 3, which should therefore be repealed. It is also proposed to extend the aggregate amounts which may be paid, and to add a new section, section 57A, to give the Council power to make interim payments to defrauded clients and to pay extended benefits.
All these proposals are designed to alleviate the plight of people who have been defrauded and to make it easier for them to obtain prompt relief. Accordingly they are recommended.
The only comment which the Commission would desire to add is that the parliamentary Draftsman might give consideration when reviewing the terms of the proposed new section 57A to including a provision to the effect that the Council shall have a right of subrogation in respect of the legal rights of any person who is paid in advance out of the Fund and shall stand in the shoes of such person to the extend to which he has been paid.
Clause 9 - paras. 14 to 20 incl.
The proposals contained in these paragraphs relates to suggested amendments to section 65. This section confers a right upon the Council to examine the trust accounts of any solicitor or firm of solicitors from time to time. The primary proposal is that, whereas section 65 at present commences with the words “for the purpose of safeguarding the Funds”, it is desired that the Council be given power to investigate the affairs of a solicitor for purposes not related to the Fidelity Guarantee Fund. There have been several recent cases where investigations have been carried out which disclosed grave irregularities. As a consequences several solicitors were either struck off the rolls or suspended from practice. It was contended at the hearing of certain of these proceedings that the Council acted in excess of its powers in making the investigations which were in fact carried out. Events have proved that it is virtually essential for the Council to have such a power and it is considered quite reasonable that the power should be conferred irrespective of the expressed purpose of “safeguarding the Fund”. However, the Commission is of the view that the method of carrying out this proposal is not entirely unobjectionable. The proposal of the Council is that section 65 be replaced by another section in similar terms in Part XI of the Act (which contains miscellaneous provisions), and that the words “for the purpose of safeguarding the Fund” as the commencement of the proposed new section be omitted. The Commission takes the view that it would be better that the power be added by an amendment to the Act which will leave no doubt that a separate power is conferred. Accordingly it will be proposed later in this report that a new section 82A be inserted in Part XI of the Act to cover this position. In these circumstances the amendment proposed by sub-paragraph (a) of paragraph 14 of clause 9 is not recommended.
With regards to the proposal made in sub-paragraph (b) of paragraph 14, it is recommended that an amendment be made omitting the words “to examine the trust account of any solicitor or firm of solicitors” and inserting in lieu thereof the words “to conduct an investigation into the accounts, transactions and affairs of a solicitor or former solicitor or a deceased solicitor or a firm of solicitors of which such solicitor or firm of solicitors or deceased solicitor is or at any time was a partner, so far as they relate to moneys received for or on behalf of any person by such solicitor or firm of solicitors”.
Sub-paragraph (c) of paragraph 14 proposes that in sub-section (1) of section 65 the words “or professional misconduct” should be inserted after the word “irregularity” wherever appearing. The proposal is perfectly proper in substance and is recommended.
Sub-paragraph (d) of paragraph 14 suggests that for the word “accounts” where secondly appearing in section 65(1) there should be inserted in lieu, the words “accounts, transaction or affairs”. This is recommended.
Paragraph 15 proposes that there should be substituted for the word “expenses” in sub-section 1A of Section 65 “costs charges and expenses”. This is recommended.
Paragraph 16 refers to a proposal that the Council should be given power to appoint “any accountant” or “any other person” to investigate the affairs of a solicitor. The Commission is not prepared to recommend such an amendment. Section 65 (1A) ( which was added by Act No 25 of 1960) provides that where an investigation is being made, the solicitor shall pay the expenses incurred by the Council in connection with the examination, unless the report discloses that the solicitor has complied in all respects with the provisions relating to trust accounts. The Commission is of the view that where such a provision exists only an accountant should be permitted to give such a certificate as is mentioned. Accordingly the amendment proposed by paragraph 16 and the amendment proposed by paragraph 17 (which is on the same lines) is not recommended for approval. This also applies to the amendment proposed by paragraph 19 and the first part of the amendment proposed by paragraph 20.
The amendment proposed by paragraph 18 is satisfactory and merely follows the pattern above mentioned, whilst the last recommendation in paragraph 20 merely substitutes the word “investigation” for the words “examination of accounts”. These proposals are recommended.
Two other matters were drawn to attention in the course of discussion with representatives of the Council. They relate to disclosure of the result of an investigation, and the right of an accountant appointed for the purpose of conducing an investigation to retain the services of some person to assist him. The Council asserted that problems had arisen which it desired to clear up and this request seems reasonable. The reasons for the proposals will be self-evident. It is accordingly recommended as follows. Firstly that the following words be added at the end of the first paragraph of sub-section 4 of section 65:
“or to members of the Council or to the solicitors, officers or agents of the Council”.
Secondly it is recommended that a new sub-section be added to section 65 as follows:
“(4A) An accountant appointed under this section may retain the services of any person to assist him in carrying out his investigation. Provided, however, that no person shall be so retained except with the prior approval of the Council”.
PART VIII
RECEIVERSHIPS
Clause 10
There is not the slightest doubt that recent have drawn attention to the need for the Council to have a right to apply for the appointment of a receiver of the trust property of a solicitor in certain circumstances. Such a proposal was first introduced in Queensland and a series of provisions was included in the Queensland Law Society’s Acts by the Queensland Law Society’s Acts Amendment Act, 1962. In 1964 provisions of the same type were inserted in the Victorian Act. The proposed new provisions as prepared by the Council are modelled upon the Victorian provisions which, in general terms, seem to be quite satisfactory and desirable. However, the Council desires to extend the nature of the receivership. Whereas the Queensland and Victorian schemes both provide solely for the appointment of a receiver of the trust property held by a solicitor, the present proposal would extend to the appointment of a receiver not only of the trust property but also of other property received or receivable by the solicitor in connection with his practice. In effect the Council desires that it should be empowered to apply for a receiver of the practice of the solicitor as well as the trust property held by him. The Commission is not prepared to recommend this extension of the Victorian scheme. It may be assumed that most defaulting solicitors will ultimately be made bankrupt. The bankruptcy legislation expressly excludes property held in trust. Thus, as regards a receiver of trust property, there will be no risk of any conflict between the proposed law and the bankruptcy law. But if it was open to the Court to appoint a receiver of the solicitor’s practices and the assets owned by him in connection therewith, considerable difficulty might well be experienced if a receiver should be appointed and the solicitor later made bankrupt. It is easy to visualise cases where there might be a conflict. Furthermore the Commission is of the view that it would be an unwarranted step for the Council to be empowered to apply to have a receiver appointed of any part of the property owned by a solicitor which was not held by him in trust for his clients. This matter was discussed with the representatives of the Council. They are not unwilling to accept the alternative proposal which the Commission is prepared to recommend. Accordingly the Commission recommends the adoption of provisions similar in substance to those of the Victorian Legal Profession Practices Act 1958 ss. 104A - 104Y (which were added by the amending Act of 1964) subject to the qualifications in the comments attached to this report as appendix “D”.
PART IX
ANNUAL PRACTISING CERTIFICATES
Clause 11 Part 1
This proposal does nothing more than take out of the Act words which have become redundant and does not affect the substantial provisions of the sections. It is recommended.
Clause 11 Part 2
This proposes a new section 69 dealing with practising fees. The effect of these provisions is to enable practising certificates of different types and for varying fees to be granted to solicitors. In particular it is proposed to enable the Council to charge lesser practising fees to solicitors during their first three years in practice. The Commission recommends the proposals but also recommends that a new sub-clause be added between sub-clauses 2 and 3 of the proposed new clause 69 as follows:
“The Council may from time to time fix as the annual practising fee payable by a solicitor who is not engaged in the practice of his profession either on his own account or in partnership with any other solicitor at a lesser fee than the fee provided for by sub-section 1 of this section”.
The Commission desires to add that the insertion of these powers is acceptable to the representatives of the Council and will grant statutory authority to continue the present practice of fixing a lesser fee for solicitors who are not in practice on their own account. Sub-paragraphs 3, 4, 5, and 6 propose consequential amendments which are satisfactory and are recommended.
The amendments mentioned above will, in the opinion of the Commission, require additions to be made to section 70 which at present deals with the method of applying for a practising certificate and the steps to be taken by the Council in relation thereto. It is recommended that two new sub-sections be added to section 70 as follows:
The power thus proposed will be in accordance with the present practice which is to issue various types of certificate. As mentioned above the Court assumed the existence of a power to issue limited practicing certificates in Denniston’s case.
However, the Council considers that it is desirable, if such powers are granted to the Council, to grant a right of appeal and this would result in it being necessary to amend section 72. It is recommended therefore that the following further amendments be made:
1. By inserting in section 72 after the word “certificate” where secondly appearing, the words, “or shall refuse to issue a certificate in accordance with the application”.
2. By adding at the end of section 72 the following words, namely, “in the case of an appeal against a refusal to issue a certificate in accordance with the application. the appellant shall, pending the disposal of the appeal, be deemed to be the holder of the certificate actually issued by the Council”.
PART X
THE SOLICITORS’ STATUTORY COMMITTEE
Clause 12
In a separate memorandum the Council made submissions regarding new sections which should be added to cover the activities of convicted persons or persons who had been clerks to a defaulting solicitor and who had been parties to the default. In a supplementary memorandum, attached to this report as appendix “C”, the Commission makes proposals for the insertion of new sections 40J, 40K and 40L. If these amendments are accepted, it will be necessary to amend section 75 (1) by adding at the end thereof the words “and for the purpose of exercising such other powers as may be conferred on it under this Act”. In the same way it will be necessary to amend section 82(1) by adding to paragraph (a), at the end thereof, the words “or as to the conduct of a person who is or was a clerk to a solicitor but is not himself a solicitor”.
These proposals together with the proposed new sections referred to have been discussed with the representatives of the Council who are content to accept the Commission’s proposals.
Clause 12 - paras. 1 and 2
These proposals are reasonable and necessary and they are recommended.
Clause 12 - para. 3
The effect of this proposal is that the discretion of the Chief Justice as to the appointment of solicitors to the Statutory Committee shall be circumscribed. The Commission can see no warrant for this and is not prepared to recommend it.
Clause 12 - para. 4
This proposal is to add further circumstances which will disqualify a member from continuing as a member of the Statutory Committee if he becomes mentally ill. This appears to have been an oversight. The proposal is recommended.
Clause 12 - para. 5
Amendments are proposed to sub-section 1 of section 77 dealing with the jurisdiction of the Statutory Committee. The proposals in this paragraph would authorise the Statutory Committee to make an order for payment of costs not by a party (as under the section as it now stands) but, in lieu thereof by any person making a charge, or the Law Society, or by the solicitor. The Commission considers that such an amendment would not be justified. The representatives of the Council, in the course of discussion, acknowledged the existence of difficulties, and stated that they are willing to withdraw this proposal.
The second proposal in this paragraph is that the Committee be given power where it thinks proper, even though there is evidence to justify a finding of professional misconduct, to refuse to make an order, or to reprimand the solicitor concerned. This is a merciful and proper provision and is recommended.
Clause 12 - para. 6
This proposes an increase in the amount of the fine which may be imposed. This seems satisfactory and is recommended.
Clause 12 - para. 7
This paragraph proposes that two new sections be added after section 77. The proposal contained in section 77A is in accordance with many other legislative provisions and seems quite satisfactory. The proposal contained in the suggested section 77B is entirely new but was suggested to the Council by the Statutory Committee to overcome practical difficulties which they have encountered in the course of their experience. The proposal seems reasonable and is recommended.
If the proposals of the Commission in regard to unqualified practitioners set out in appendix “C” are accepted, it will be necessary to add to section 77 a provision to give jurisdiction to the Statutory Committee to hear matters under the proposed new sections although they do not involve a charge of misconduct.
PART XI
MISCELLANEOUS
Clause 13 - para. 1
This proposal is that a further power be conferred upon the Council. Section 82 details the powers given to the Council and the further proposal is satisfactory and is recommended.
Clause 13 - para. 2
This proposal is to confer power upon the Council to institute a system of arbitration. This seems desirable and satisfactory and is recommended. However, it is suggested that the words “and/ or other persons” after the words “members of the Law Society” should be omitted.
Clause 13 - para. 3
This proposes an amendment to section 86. What is intended is that the words “and as to the depositing with the Law Society of part thereof, and the prescribing of such part” be added at the end of sub-paragraph (i) (a) of paragraph 1 of section 86. This proposal is consequential upon the proposals dealing with interest on solicitors’ trust accounts.
Clause 13 - para. 4
Here again another power is proposed in regard to the making of regulations. The proposal that power be given to make regulations as to the method of operating on trust accounts and the persons who may be authorised so to operate seems satisfactory and is recommended. Further proposed powers relating to persons who have been disqualified or suspended and the employment of former employees of such disqualified or suspended solicitors seem to be unnecessary particularly in the light of the new section 40J proposed by the Commission. Accordingly this further additional is not recommended.
For reasons already mentioned the Commission will not recommend the inclusion of an amendment relating to the appointment of persons other than accountants to conduct investigations. However, there seems to be no objection to the sub-situation in paragraph (b) (iv) of sub-section 1 of section 86 of the word “investigation” for the word “examination”.
Clause 13 - para. 6
These proposed regulation-making powers seem satisfactory. The first deals with a power to make regulations following the establishment of an arbitration service. The second relates to the prescription of cases where a solicitor may share receipts with an unqualified person. The power to make such last mentioned regulations in necessary particularly in such cases as where a solicitor dies and the executors desires that the practice be carried on for a short period pending disposition thereof. The third relates to the administration of the foundation mentioned in the trust account provisions. The fourth relates to the receivership provisions.
Clause 13 - paras. 7, 8, and 9
These are more or less consequential or relates to penalty. All seem satisfactory and are recommended.
Clause 13 - para. 10
This proposed amendment has already been provided for in clause 2 of the draft bill and it is unnecessary to repeat it. Accordingly it is not recommended.
As mentioned above it is considered that in this part of the Act dealing with miscellaneous matters a power conferred by section 65, to investigate the affairs of a solicitor. The following is a draft of a new section 82A which the Commission recommends should be added:
PROPOSED NEW SECTION 82A
POWERS TO COUNCIL TO INVESTIGATE AFFAIRS OF SOLICITORS
82 A. (1) The Council may, in addition to and not in substitution for the powers conferred on it by section 65 and 82 of this Act, at any time and from time to time appoint a solicitor or an accountant to examine the accounts transactions and affairs of a solicitor or former solicitor or a deceased solicitor, or a firm of solicitors of which such solicitor of former solicitor or deceased solicitor is or at any time was a partner; specified in the appointment and to furnish to the Council a confidential report as to any irregularity or professional misconduct or alleged or suspected irregularity or professional misconduct in or in relation to the accounts transactions or affairs of such solicitor or solicitors that may be disclosed by such examination or as to any other matter that in the opinion of such solicitor or accountant should be further investigated. A copy of the report shall forthwith be sent by post by the solicitor or accountant to the solicitor or firm concerned.
(2) The provisions of sub-sections 1A, 2, 3, 4, 4A, 5 and 6 of section 65 of this Act as amended shall apply to any such appointment examination and report.
The Commission invites attention to the fact that the proposed section 82A will give the Council power to appoint a solicitor or an accountant to conduct an investigation of the type referred to, although the Council’s proposal to extend section 65 to enable it to appoint an accountant “or any other person” to conduct an investigation under that section was not recommended for reasons already stated. It is the view of the Commission that there may well be cases where it may be desirable to investigate the affairs of a solicitor and that the investigation could properly be conducted by a solicitor. This would be the case, for example, where questions of professional misconduct are involved. But it is considered should be eligible for appointment, and that a solicitor should be eligible only in the extended types of cases mentioned in the proposed new section.
Clause 14
This is a proposal for an amendment to the Conveyancing Act but the Commission does not consider that there is any particular need for such an amendment. It is suggested that it be left to the Parliamentary Draftsman to determine whether it is worthwhile pursuing this proposal as it relates only to matters of form.
J. K. Manning
Chairman
R. D. Conacher
Member
21st December 1966.
