I move amendment No. 87:
In page 42, to delete lines 12 to 14.
Section 30 (2) states that "the Society may prescribe a different rate or rates of annual contribution to the Fund in relation to any class of solicitor." Solicitors are objecting to different rates. The subsection uses the word "may", which allows for discretion by the society. This does not seem fair from solicitors' points of view. I propose the deletion of the subsection.
I see why the legal profession is concerned that this provision would allow the society to introduce different rates of contribution to the fund. Even the thought of this enabling provision has caused divisions in the profession. Deleting lines 12 to 14 would leave the public policy principle intact. The interesting aspect about insuring against fraud committed against oneself is that it is not possible to do so as a sole practitioner. The fund is to be a mutual one to which all solicitors contribute. There is a danger that the bigger firms will become fed up contributing to the fund because they can insure against fraud by their partners. However, individual solicitors cannot do so. Equal contributions to the fund by all members of the profession is a recognition of the principle of solidarity. All solicitors should contribute equally, notwithstanding their personal exposure to fraud. Many sole practitioners would fear that this enabling power would result in their having to pay large contributions, with bigger firms getting off lightly.
On the evidence to date, any claims against the fund have been made in respect of smaller firms or single practitioners. It could be said that they are at higher risk of draining the fund. At the same time, it would be generally accepted as a basic principle of solidarity in the profession that it is fairer to allow the fund to continue to be contributed to in an equal way. There is strong feeling about this among the Law Society and the Dublin Solicitors Bar Association. This provision is not in the public interest and does not significantly add to the legislation. This should be a matter for the Law Society. They agreed to accept liability for the fund. It is fairer to maintain the present situation.
I wonder why the Minister included this provision. There is a great deal of logic to what the previous speakers said. In the case of habitual offenders, be they motorists or insured persons of whatever category, insurance companies have the powers of loading or depriving insured parties of no claim bonuses. There are, therefore, different categories of penalties. Is this what the Minister had in mind when he included this provision?
I would be surprised if the society did not seek to have some slight discretion in relation to what it charged, controlled by regulations or clearly defined conditions. In the case of a solicitor, the nature of whose perpetual offending is not such as to deem that he be struck off the register and deprived of his practice but who is imposing a greater burden on the society than other individual solicitors or groups of solictors, it seems logical and reasonable to assume that there should be some degree of discretion available to the society to remind that solicitor or firm of solicitors that they are imposing a disproportionate burden on its funds. Perhaps there is no logic to what I am saying but I would certainly like a comment on it.
We must distinguish between people who have to pay a contribution each year to the fund and somebody who has been the subject of a call on it. It has been my experience — and I am sure that of Deputy O'Donnell — that if somebody does something which involves the payment of money out of the fund, there is a 99 per cent chance that they will be struck off anyway so their contribution in the future does not arise.
The situation is not exactly analogous to that of insurance because we are talking here about different classes of solictors. The different class which the Law Society had in mind — as I understand it — was sole practitioners as against everybody else. It is not analogous to insurance where one can look at each individual case. Section 26 provides essentially for compulsory indemnity insurance for all solicitors. The insurance companies will load those in the same way as for people who take out car insurance.
I take Deputy O'Donnell's point that there is no public interest issue involved here. This was put into the legislation at the request of the Law Society. When it first did so there was a view in the society that it would be a good thing to do and that the majority of the profession supported different rates for different classes of solicitors — to put it bluntly, that a higher rate would be paid by sole practitioners. The society has now changed its mind because it has obviously taken soundings within the profession and feels that this would not have majority support. Therefore, the society does not envisage doing it at the moment because the support is not there and it wants us to withdraw it.
We are not just legislating for today. If I decide to withdraw this now it will mean that if the solicitors' profession changes its mind in the future and wants to prescribe different rates for different classes, it will not be able to do so. I do not envisage an amendment to the solicitors' Bill being brought through both Houses of the Oireachtas just to accommodate the Law Society in that respect.
It is simply an enabling provision. If the Law Society bears in mind that it will not be able to do this in future if it wants to — short of another solicitors' Bill to deal with the situation — as there is no public interest issue involved and if the society no longer wants it there, then I am happy to withdraw it on the basis that the people who requested it initially do not want it now.
The Minister is right. Even having that ability in the legislation is causing divisiveness.
I am aware of that.
I am delighted to hear that the Minister will withdraw it. It is a point strongly made by the society.
I move amendment No. 89:
In page 42, between lines 28 and 29, to insert the following:
"(5) The Society may, by regulations, provide that no contribution to the Fund shall be payable by a solicitor who resides outside the State and is engaged in the provision of legal services outside the State.'.".
Under section 29, grants out of the fund are confined to losses resulting from dishonesty of a solicitor in respect of his practice within the jurisdiction of the State. However, solicitors practising outside the jurisdiction may wish to obtain an Irish practising certificate. This provision will allow them to do so without having to pay the annual contribution to the fund. It is framed as an enabling provision so that if the scope of the fund is extended in the future to a solicitor's practice outside the jurisdiction, under section 29 (18) of the Bill the regulations may be amended accordingly.
What is the amount of the contribution to the fund at the moment? Is it part of the annual practising fee?
It is £600.
Is that the total amount?
Yes.
Has the Minister considered excluding certain classes of transactions as well as having a monetary limit, in other words, saying that something like the conveyancing of a domestic house lies completely outside the limit so that nobody who retains a solicitor to buy and sell their house will be caught, regardless of the limit? It would be possible to meet some of the worries about this strict cash limit if certain categories of transaction were exempt from the cap.
It seems outrageous, for example, that a farmer in County Meath or County Kilkenny could sell 1,000 or 1,200 acres and wake up the next morning to find that all his money went on the Grand National and that he has lost whatever is in excess of the limit. Conveyancing is the one aspect in which the ordinary Joe Soap is interested. When people employ a solicitor they have to take the risk of choosing somebody who is solvent. However, when a farmer entrusts the sale of his farm to a solicitor, he does not think it possible that the solicitor is a secret gambler and could make off with the entire proceeds.
It occurred to me that rather than argue about the limits, the Minister might also consider exempting certain transactions from an upper cash limit.
I think I unwittingly misled Deputy O'Donnell. The sum of £600 is the practising certificate and the contribution to the fund.
It is the two combined.
Following advice I have now gone back to my original position — the £600 is the contribution to the fund.
And the practising fee is on top of that?
Yes. In relation to Deputy McDowell's point, I agreed earlier in the debate on section 29 to raise the limit. However, I take his point and it is a good suggestion. I will include it in my consideration.
The situation is completely unjust.
It might provide a better solution than the strict cash limit.
I move amendment No. 90:
In page 42, between lines 28 and 29 to insert the following:
"(5) Notwithstanding the provisions of section 21 of this Act (as substituted by the Solicitors (Amendment) Act, 1994), no grant shall be made out of the Fund in consequence of dishonesty on the part of a solicitor in the full-time service of the State or any clerk or servant of that solicitor.".
This follows logically from what the Minister gave as the defence for the capping system — that it is not an endless fund which solicitors can keep topping up. If the State has employed solicitors who decide to do a bunk with money and so on, it should take responsibility for them and not ask the honest solicitor in Carlow — and they are all honest down there — to pay into a fund to bail the State out of its responsibility.
That is exactly the reasoning behind the amendment.
My understanding is that the State invariably meets losses suffered by people as a result of negligence or dishonesty on the part of its employees. As the State is seeking to put a cap on the amount to be paid to any individual client from the fund, it will hardly raid the fund itself, although there is always a remote possibility. The net effect of the combined provisions of sections 56 and 62 of the Bill is that a solicitor in the full-time service of the State is not required to hold a practising certificate. Under subsection (1) of the inserted section 22, only a solicitor seeking a practising certificate must pay a contribution to the fund. If people believe that is a roundabout way to do it, I do not think we will be doing any damage by accepting the amendment to remove any lingering doubt. However, I do not think there is any practical need for it.
(Carlow-Kilkenny): The Minister worries me slightly when he says that those working for the State do not have to have a practising certificate. Does it mean that any kind of a dud can get into the Civil Service?
