I move that the Bill be now read a Second Time. The Bill is in substitution for the Solicitors (Amendment) Bill, 1958, which was withdrawn in February last. As Deputies will note, the present Bill is a much more comprehensive one. 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. In addition, the present Bill proposes to place the Compensation Fund, which was established under the Solicitors Act, 1954, on a sound financial footing. Finally, it contains certain important miscellaneous provisions in regard to solicitors. I shall now deal in some detail with the proposals in the Bill.
Part II of the Bill is designed to cover the situation which has arisen consequent on the Supreme Court decision in March, 1958, that the powers purported to have been conferred on the Disciplinary Committee of the Law Society by Part III of the 1954 Act are unconstitutional. That Act attempted, unsuccessfully as it transpired, to vest in the Law Society disciplinary control over solicitors and was designed to grant the profession self-government. In so far as this self-government meant that the profession could expel those members whose conduct, or rather misconduct, made them no longer fit to practise as solicitors, it has been held to be unconstitutional because it involved the exercise of a judicial power which the Constitution reserves to the judiciary. The 1958 Bill and Part II of the present Bill were prepared in an effort to meet this situation and to do something about the consequent unsatisfactory state of affairs.
Before I go on to speak of the provisions contained in Part II, I think I ought to stress that misconduct by solicitors is confined to a very small number in a profession that has maintained over the years the very highest standards of service to the public and of honesty in the conduct of its members. Unfortunately, the activities of a few can do untold harm to the reputation of a profession as a whole, and this is true not alone of the solicitors' profession but of other professions as well.
One of the main problems that arises in connection with solicitors is that, in the nature of their calling, they have from time to time in their hands moneys belonging to their clients. It is this fact that leads to trouble and causes innocent people to lose their money either through deliberate dishonesty or through dishonesty which begins as carelessness or negligence and ends as fraud. Circumstances very often become such that a solicitor who originally had no dishonest purpose lands himself in a mire out of which he cannot extricate himself. I shall return to this aspect later.
I mention the dishonesty case at this juncture in order to make the point that it is the exception in an upright and high-minded profession. Indeed, the amount of money lost to clients through the misconduct of the few is a very small percentage of the total passing through the hands of solicitors. Nevertheless, the public and the profession must be protected against the dishonest solicitor.
Section 6 of the Bill provides for the Disciplinary Committee of the Law Society. This Committee will replace that set up under the 1954 Act. That Act purported to give to the Disciplinary Committee power to strike off the roll or suspend from practice, with a right of appeal to the Chief Justice. The Supreme Court, in the decision to which I have referred earlier, held that this right of appeal was not sufficient to bring a procedure, otherwise unconstitutional, within the Constitution.
Section 7 will confer on the new Committee powers of inquiry into the conduct of a solicitor on the ground of alleged misconduct. An application for an inquiry may be 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 finding in the form of a report to the High Court. If misconduct is found, the Society are to bring the report before the High Court. The report of the Committee will contain their opinion as to the fitness or otherwise of the solicitor to be a member of the profession.
Certain objection was taken to this proposal when the 1958 Bill was being debated in the House and the matter was reconsidered in consultation with the Society. We are satisfied that the Committee should be allowed to express an opinion in any report they make. The members of the Committee will be outstanding members of the profession willing to undertake what is an onerous and responsible duty. Allowing leading members of a profession to say whether or not they think a person is fit to be a member of that profession is nothing new.
For instance, under Section 29 (4) of the Medical Practitioners Act, 1927, it was provided that, on the hearing of an appeal to the High Court by a person whose name is erased from the Medical Register for infamous conduct in a professional respect, the Court (I am quoting from the subsection) "may, if it thinks proper so to do, admit and have regard to evidence of persons of standing in the medical profession as to the nature of conduct which is infamous in a professional respect." There is a similar provision in regard to veterinary surgeons in Section 39 (3) of the Veterinary Surgeons Act, 1931. Under the present Bill, there is no obligation on the High Court to accept the opinion of the Disciplinary Committee.
The proceedings before the High Court are dealt with in Section 8. 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.
Section 9 provides for the removal at his own request of the name of a solicitor from the roll and Section 10 for the restoration of the name of a solicitor to the roll. The Disciplinary Committee may, 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.
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 Law Society and we are satisfied that the provision is a fair and reasonable one. 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 adequately protected by allowing an appeal to the Supreme Court.
The disciplinary jurisdiction vested in the High Court will, by reason of Section 13, be exercised by the President of the High Court or by an ordinary judge of the High Court to be nominated by the President. In line with this policy is the proposal in 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 give statutory form to what is the existing law as interpreted by judicial decision.
The remaining sections in Part II of the Bill do not call for any detailed comment from me on this Stage. They are consequential and re-enact, with appropriate amendments, certain sections of the 1954 Act that are being repealed.
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 make, as the draftsmen say, further and better provision for the Compensation Fund. 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. As respects losses occurring in the first five years, the making of grants and the amounts thereof were in the absolute discretion of the Society. In respect of losses occurring after the 6th of January last, compensation must in general be in full. The annual contribution payable at present by each solicitor is five pounds, 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 five pounds up to a maximum of ten pounds.
The idea in 1954 was that after five years the Fund would be able to compensate clients in full and that provision for an additional contribution of up to five pounds 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. I have had a number of discussions with representatives of the Council of the Society on this matter; and the scheme as proposed in Sections 21 and 22 was finally agreed on between us and subsequently approved by the Government. The contribution is being raised to twenty pounds and will remain at that figure until a reserve of £25,000 has been built up to meet exceptional claims. Thereafter, the contribution will be fixed by the Society at an amount sufficient to maintain the reserve at £25,000 and at the same time to satisfy claims as they arise.
The existing liabilities of the Fund under the 1954 Act will be paid off as soon as possible. Experience since 1954 leads us to expect that the necessary reserve will have been built up in a short period of time. Then it should be possible to reduce the contribution. We realise, of course, 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.
I may say that other schemes for compensating clients have been examined, but they were discarded in favour of what is in fact a compulsory insurance scheme with an adequate annual contribution. Members of the public who are defrauded by those solicitors who form a minority of the profession are very often helpless victims and must in the opinion of the Government be adequately protected. It is true that this in effect means that the honest solicitors are being compelled to underwrite their dishonest colleagues. However, we are satisfied that no other method will work satisfactorily. After all, the careful motorist must underwrite the negligent motorist. The scheme of the 1954 Act was a good scheme except for the fact that the contribution was not sufficiently high to meet the liabilities which arose. This problem will, we trust, be solved under the present Bill.
Part IV of the Bill contains the miscellaneous provisions. I should like to discuss three of the sections concerned because they propose important changes in the law. These are Sections 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. This proposal is no more than reasonable. 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.
I should point out that, while it is proposed to add two paragraphs to Section 49 (1) of the 1954 Act, two existing paragraphs are listed for repeal in the Schedule to the Bill. These are paragraphs (b) and (c). 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 these 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, in our view, 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.
I now come to what we regard as a vital section in the Bill. 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. All this goes without saying. The council have stressed to us 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 person who meddles with other people's funds to get himself out of what he fondly imagines is a temporary difficulty is suffering from the delusion that so often leads to disaster. In the interests of such a person and also in the public interest, any system of control requires the element of prevention at an early stage as well as the element of ultimate punishment. As a philosopher once put it in another context, you do not allow a palpable madman to throw himself over a precipice, you restrain him, you who are wise.
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. Deputies 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 eventually be required from every solicitor.
I desire to make it perfectly clear that it is not the intention to have the section enacted and then to forget about the matter. This section is regarded by the Government as one of prime importance which must be brought into operation in a reasonable time. If it is not, the question of fresh legislation will need to be considered. We realise only too well that it is not possible to make particular solicitors, or anybody else for that matter, honest by Act of the Oireachtas, but we feel that we can do something to prevent people from being dishonest and to avoid a line of conduct which must eventually lead to dishonesty.
I might mention that 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 balances 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. The idea is that the solicitor keep his house in order throughout the year.
I have dealt at some length with Section 31 because, as I have indicated, we regard it as a very important section. I may say that it has received the most careful consideration in consultation with the Council of the Law Society. To some it may appear as if the proposal means unnecessary control in the conduct of their profession by solicitors. This is far from being the case. As Deputies are aware, there has, and naturally so, been an amount of public 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.
Apart from the 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 practitioner. If 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. After all, reputable solicitors are in the majority, and a client who exposes himself to fraud with his eyes open has often only himself to blame. This, of course, is not to say that innocent clients do not lose their money through the misconduct of solicitors. They do Still, loss might, in many instances, be avoided if more thought were given to the reputation of 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 rather technical section which proposes to apply the ordinary bankruptcy rule in respect of the administration of the client account or accounts of a 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 insolvency on death. They are applied in accordance with what is known as the rule in Clayton's Case, which lays down that debts must be discharged in order of date or, as is said, ‘first in, first out'. The Council of the Law Society have suggested that this rule should be excluded and that the law should be amended in the same way as has been done in the Scottish Solicitors Act, 1958. Having examined the matter thoroughly, we were satisfied that the wishes of the Council should be met. Accordingly, Section 32 of the Bill proposes 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 clients of the solicitor according to the respective sums received by the solicitor on their account and remaining due by him to them.
I recommend the Bill to the House. In doing so I should like, on behalf of the Minister for Justice and on behalf of the Government, to express thanks to the Council of the Incorporated Law Society for their assistance and co-operation. I have personally been very closely associated with the preparation of this Bill and I had lengthy consultations with the representatives of the Council at various times. It would be remiss of me if I did not pay a special tribute to the President of the Society and to the other representatives of the Council with whom I examined the proposals for this Bill. The President and his colleagues were generous and unstinting in devoting their time and energy to the Bill. I was particularly impressed by their anxiety to have a Bill which would be of enduring benefit, not alone to the public but to the profession that they so honourably represent. I trust that this Bill, which has been agreed with the Council of the Incorporated Law Society will achieve its objects.
