This Bill, which is a much more comprehensive one, replaces the Solicitors (Amendment) Bill, 1958, which was withdrawn in the Dáil in February last. The objects of the Bill are threefold. First, and like the 1958 Bill, it proposes to provide for striking the name of a solicitor off the roll or suspending him from practice or censuring him in any case where he has been found guilty of misconduct. Secondly, it proposes to deal with the Compensation Fund which was set up under the Solicitors Act, 1954, to compensate clients for losses caused to them through the dishonesty of solicitors. Thirdly, it contains certain important miscellaneous provisions in regard to solicitors.
Part II of the Bill is necessary because of the Supreme Court decision in March, 1958, that Part III of the 1954 Act is unconstitutional in that it meant conferring a judicial power on a non-judicial body, namely, the Disciplinary Committee of the Law Society.
Section 6 of the Bill provides for the new Disciplinary Committee of the Law Society. This Committee will replace that constituted under the 1954 Act, but they will not exercise any exclusively judicial function. The scheme of that Act involved a system under which the Disciplinary Committee could strike the name of a solicitor off the roll or suspend him from practice, the solicitor having a right of appeal to the Chief Justice. The Supreme Court, in the decision in 1958, held that a right of appeal was not sufficient to bring a procedure, otherwise unconstitutional, within the Constitution.
Under Section 7 the new Committee will have powers of inquiry only, where an allegation of misconduct is made by any person or by the Law Society. If the Disciplinary Committee are satisfied that there is a prima facie case for an inquiry, they must proceed to hold one and embody their findings in the form of a report to the High Court. If they find misconduct, the Law Society must bring the report before the High Court. The report will specify the evidence laid before the Committee and their opinion as to the fitness or otherwise of the solicitor to be a member of the profession. There is no obligation whatever on the High Court to accept the opinion of the Disciplinary Committee and the Court may accept or reject it, at the Court's discretion.
The Court, having considered the report of the Disciplinary Committee, may strike the name of the solicitor off the roll, suspend him from practice, censure him or censure him and require him to pay a money penalty. The High Court may also direct the solicitor to make restitution or may freeze his bank account. On special grounds, the Court may send the case back to the Disciplinary Committee to take further evidence for submission to it and to make a supplementary report. All this is provided for in Section 8.
Section 9 is concerned with the removal at his own request of the name of a solicitor from the roll and section 10 with the restoration of the name of a solicitor to the roll. The Disciplinary Committee may, but only if they think fit, remove a solicitor's name from the roll at his own request. Otherwise, the matter must be referred to the High Court. Restoration to the roll will be exclusively a matter for the High Court. It may at first sight seem strange that a solicitor cannot have his name removed from the roll if he so desires. The vast majority of cases will be perfectly straightforward; but it is necessary to provide against automatic removal from the roll on application if the solicitor desires to have his name removed simply to avoid his obligations. We do not want a person to be able to say: "I am no longer a solicitor, and there is nothing you may do to me. Your Act and your regulations do not apply to me." Admittedly, under Section 4, "solicitor", where the context so permits or requires, includes a former solicitor or a deceased solicitor, but this may not be sufficeint, and Section 9 is necessary in its present form, if only ex abundanti cautela.
Section 11 will cover cases where the former Disciplinary Committee have purported to strike the name of a solicitor off the roll under the unconstitutional provisions of the 1954 Act. In these cases, the Society may apply by notice of motion to the High Court to have the solicitors concerned properly struck off and the section provides for the procedure to be followed.
Under Section 12, the orders of the High Court are to be final and not appealable, but an appeal will lie to the Supreme Court on a specified question of law. We have considered this matter carefully in consultation with the Council of the Law Society and we are satisfied that the provision is fair and reasonable. The High Court will be deciding on matters of fact in most cases, but if a question of law is involved the rights of the solicitor are being protected by allowing an appeal to the Supreme Court. The Attorney General has no doubt but that the section is constitutional.
By reason of Section 13, the disciplinary jurisdiction vested in the High Court will be exercised by the President of the High Court or by an ordinary judge of the High Court to be nominated by the President. This is designed to give uniformity of practice and procedure and conforms with the policy of Section 25 to transfer from the Chief Justice to the President of the High Court certain more or less administrative functions, now performed by the Chief Justice under the 1954 Act.
Section 14 of the Bill will clothe with absolute privilege disciplinary proceedings under the 1954 Act and under the proposed Act. The section will put in statutory form what is the existing law as interpreted by judicial decision.
The remaining sections in Part II of the Bill are consequential and re-enact, with appropriate amendments, certain sections of the 1954 Act that are listed for repeal in the Schedule.
Part III of the Bill will set out in a more convenient way the provisions of the 1954 Act concerning the power of the Law Society to deal with the documents of certain solicitors and also the provisions concerning the control of banking accounts of solicitors. In addition, it is proposed in Sections 21 and 22 to put the Compensation Fund on a sound financial footing. This Fund, which will be continued in existence, was set up under the 1954 Act to compensate clients who suffer losses due to the dishonesty of solicitors. The making of grants in respect of losses occurring before the 6th January last and the amounts thereof were in the absolute discretion of the Society. In respect of losses occurring after that date compensation must in general be in full.
The annual contribution at present payable by each solicitor is £5, but solicitors in their first three years of practice pay half that amount. For the 1961 practice year or any practice year thereafter, the contribution may be increased from £5 up to a maximum of £10. It was hoped in 1954 that after five years the Fund would be able to compensate clients in full and that provision for an additional contribution of up to £5 would be sufficient to keep the Fund solvent. This hope has not been fulfilled and the Fund is now unable to meet its liabilities. The losses have been much higher than was anticipated and no payments have been made to claimants for some time past.
Section 22 proposes to raise the contribution to £20 and it will remain at that figure until a reserve of £25,000 has been built up to meet exceptional claims. After the reserve has been established, the Society may, for any year, reduce the contributions; but in so doing they must have regard to the principle of keeping the reserve at £25,000. There is no statutory obligation being placed on the Society to increase to contribution but, if they decide to do so, they must have regard to the amount of the reserve; and their powers to increase are limited in this way.
As I visualise it, the normal contribution will not be more than £20. In fact, the Society hope that they may be able to reduce the contribution after a few years. The existing liabilities of the Fund under the 1954 Act will be paid off as soon as possible. To realise that the proposed contribution is double what the Society would have had to impose at the end of this year. It is, however, less than eight shillings a week, which is small when compared with a solicitor's other expenses in running his office and also when the fall in the value of money since before the war is taken into account. Other schemes for compensating clients have had to be discarded in favour of what is in fact a compulsory insurance scheme with an adequate annual contribution.
The solicitors' profession is an honourable and upright one and it is unfortunate that the conduct of a few members is tending to give it a bad name. This, however, obtains in all professions. Reputable solicitors, who form the majority, will have to underwrite their dishonest colleagues Unfortunately, no other system will work satisfactorily; and it is necessary because of existing circumstances to impose what I readily admit is a substantial burden.
Part IV of the Bill contains the miscellaneous provisions. Three of the sections concerned propose important changes in the law. These are Section 26, 31 and 32.
Section 26 proposes to add two new paragraphs to Section 49 (1) of the 1954 Act. That section provides for the refusal of a practising certificate in certain specified cases listed in subsection (1). It is proposed to add the case of a solicitor who has failed to comply with an order of the High Court and also the case of a solicitor who has failed to comply with the Solicitors' Accounts Regulations or with regulations as respects professional practice, conduct and discipline. If a solicitor does not conform with the regulations dealing with accounts or with the other regulations I have mentioned, he should not be entitled automatically to the issue of a practising certificate.
Where, under Section 49 of the 1954 Act, the Society direct the registrar to refuse to issue a practising certificate, the certificate must nevertheless be issued if the applicant satisfies the Society that he has appealed to the Chief Justice. The President of the High Court is being substituted for the Chief Justice in Section 25 of the Bill. While it is proposed to add two paragraphs to Section 49 (1) of the 1954 Act, two existing paragraphs, (b) and (c), are listed for repeal in the Schedule to the Bill. Paragraph (b) is concerned with the case of a solicitor who has been suspended from practice, the period of the suspension having expired. Paragraph (c) specifies the case of a solicitor whose name has been struck off the roll and then restored. In both cases, the Society may direct the refusal of a practising certificate.
Whatever justification there may have been for paragraphs (b) and (c) under the scheme of the 1954 Act, which purported to allow the Disciplinary Committee to suspend from practice and to strike off and restore to the roll, there is no justification now. Once the period of suspension imposed on a solicitor by the High Court has expired or once the High Court has restored to the roll the name of a solicitor which has been struck off, the solicitor concerned has served his punishment and should not be liable to further punishment.
Section 31 makes detailed provision for the production each year by every solicitor, to whom the Solicitors' Accounts Regulations apply, of an accountant's certificate stating that the solicitor is keeping the Accounts Regulations. The regulations, which apply to every solicitor practising on his own or in partnership and receiving clients' moneys, oblige the solicitor to keep a separate client bank account or accounts. Failure to deliver the annual accountant's certificate will be misconduct for the purpose of the disciplinary provisions contained in Part II of the Bill and, moreover, the registrar is being empowered to withhold the issue of a practising certificate until the solicitor delivers the accountant's certificate.
Section 66 of the 1954 Act, which made accounts regulations mandatory, provides that the regulations shall make provision for, inter alia, enforcing compliance with them and ascertaining whether they have been complied with. Under the Solicitors' Accounts Regulations, 1955, the Council of the Law Society may require a solicitor at any time to have his books, bank statements and other appropriate documents produced for examination by an accountant approved or appointed by the Council. The powers of the Council would not normally be exercised until a complaint in regard to the solicitor is made or the Council become aware themselves of some suspected irregularity. By that time, the solicitor will in many cases have already landed himself in trouble.
The object of Section 31 of the Bill is to keep him out of trouble. The annual accountant's certificate will protect the public and it will also protect the solicitor himself. Furthermore, it will help to protect the Compensation Fund so that the profession in general will have a safeguard against those members likely to impose on the Fund substantial liability for their dishonesty. In this respect, the section is a corollary to a Fund, contributions to which are obligatory for all solicitors though the vast majority of them are honest and careful in the handling of clients' moneys. Accounts regulations are of little practical value if they are not strictly enforced and the only way to see that they are enforced is by a regular examination.
A solicitor must be both a professional adviser and a business man. As a business man he should, if he is prudent, keep proper books and have them regularly examined and audited. The Council have stressed that if appropriate steps are taken before great damage is done, the public and the practitioner will be protected from worse harm. Admittedly, the accountant's certificate will not be an absolute protection against a solicitor who is deliberately dishonest, but it should save from himself that solicitor who, through carelessness or negligence not amounting, in the beginning at least, to fraudulent intent, would otherwise gradually and inevitably get himself deeper and deeper into trouble.
The need for an annual accountant's certificate has been demonstrated in England and Scotland. In England, the obligation was imposed in an enactment of 1941 and rules were made to give effect to that enactment in 1946. A corresponding enactment for Scotland was passed in 1958. In the Six Counties, proposals for an annual certificate are contained in a Private Member's Bill sponsored by the Northern Law Society.
Senators will notice that Section 31 of our Bill will, by reason of Section 2, come into operation on a day to be fixed by order of the Minister for Justice made on the request of the Society—which means the Council of the Society. The Government have agreed that the section should not be brought into operation immediately so as to allow time for the making of the necessary regulations and to acclimatise the profession to the fact that an annual accountant's certificate will evnetually be required from every solicitor.
I desire to stress that it is not the intention to have the section enacted and then to do nothing more. This section is regarded by the Government as one of vital importance which must be brought into operation within a reasonable time. If it is not, the question of fresh legislation will have to be considered. In England, one of the rules made in 1946 provides that the accountant shall make a comparison, as at not fewer than two dates selected by him at random, between the liabilities of the solicitor to his clients and the balance standing to the credit of the client account. This is, of course, a very valuable rule and was obviously intended to see to it that a solicitor is not allowed to evade his obligations simply by having his house in order at the time the accountant makes the examination.
As Senators are aware, there has been an amount of disquiet at certain cases involving dishonesty by solicitors that have from time to time come to light. The Council of the Society are very concerned about these cases and are anxious to do all they can in the matter. Although there is a duty to protect the public, there is also the public's duty to protect itself. People who have to consult solicitors should be careful to avoid the disreputable members. Where a client is negligent and loses his money, the compensation Fund will not automatically indemnify him, as payments from the Fund in cases of negligence are in the discretion of the Society and will continue to be so. Reputable solicitors are in the majority, and a client who exposes himself to fraud with his eyes open has often only himself to blame. I am not, of course, suggesting that innocent clients do not lose their money through the dishonesty of solicitors. They do. Nevertheless, loss might, in many instances, be avoided if more thought were given to the solicitor to whom one entrusts one's affairs.
The last section of the Bill that calls for discussion is Section 32. This is a technical section which proposes to apply the ordinary bankruptcy rule in respect of the administration of the client account or accounts of bankrupt solicitor or of a solicitor who dies insolvent. The funds in a client account are treated as trust funds and, as such, do not form part of the estate for the purposes of bankruptcy or inslovency on death. They are applied in accordance with what is known as the rule in Clayton's Case. This rule lays down that debts must be discharged in order to date or, as is said, "first in, first out." Section 32 of the Bill proposes to exclude the rule by providing that the sum or sums at the credit of the client account or accounts of a bankrupt or deceased insolvent solicitor shall be divisible proportionately amongst the clents of the solicitor according to the respective sums received by the solicitor on their account and remaining due by him to them.
May I conclude by saying that I hope that this Bill, which is an agreed Bill with the Council of the Law Society, will fulfil its purposes and be of lasting benefit to the solicitors' profession as well as to the public?