As amendment No. 14 is consequential on amendment No. 1, perhaps Deputies would discuss the two together.
Solicitors (Amendment) Bill, 1960—Committee Stage.
Sections 1 and 2 agreed to.
SECTION 3.
I move amendment No. 1:—
In page 4, to insert the following definition at the end of subsection (1):
"‘the Solicitors' Accounts Regulations' means the regulations relating to accounts made by the Society for the purposes of section 66 of the Principal Act."
I am asking the House to discuss amendments Nos. 1 and 14 together, because they refer to the same matter. They are purely drafting amendments. Because of amendment No. 18 there will be a further reference to the Solicitors' Accounts Regulations and, therefore, it is proposed to define "Solicitors' Accounts Regulations". If it were not for amendment No. 18, the Solicitors' Accounts Regulations would be mentioned only once in the Bill but, if amendment No. 18 is adopted, they will be mentioned twice and, therefore, in accordance with normal drafting procedure, it is proposed to define the expression.
All right.
Amendment agreed to.
Section 3, as amended, agreed to.
Section 4 agreed to.
SECTION 5.
As amendments Nos. 2 and 3 are related perhaps the two could be discussed together.
I move amendment No. 2:—
In subsection (2), page 4, line 19, to insert ", in the opinion of the Society," before "the".
Again, these are purely drafting amendments. We are proposing to use the same wording as in the Fifth Schedule to the 1954 Act. That Schedule contains the existing provisions as to the Compensation Fund, and these provisions are being maintained for losses which, in the opinion of the Law Society, arose, or will have arisen, before the passing of the Act. Under the 1954 Act, the date of the loss is determined by the Society. We are adhering to the same principle here and leaving it to the opinion of the Society.
I think the amendment is all right but I do not agree with the Parliamentary Secretary that it is a drafting amendment. It is a good amendment but it is certainly not a drafting one.
I will not argue the point.
Amendment agreed to.
I move amendment No. 3:
In subsection (2), page 4, lines 19, 20 and 21, to delete "or was sustained in consequence of dishonesty of a solicitor (within the meaning of subsection (4) of section 69 of the Principal Act) occurring".
Amendment agreed to.
Section 5, as amended, agreed to.
Sections 6 and 7 agreed to.
SECTION 8.
As amendment No. 6 is cognate, perhaps amendments 4 and 6 could be discussed together.
I move amendment No. 4:
In subsection (1), page 6, to delete "or his or their agent or nominee" in line 35 and in lines 39 and 40.
The purpose of both these amendments is to delete the words "or his or their agent or nominee". These words were originally inserted at the suggestion of the Council of the Incorporated Law Society but, in subsequent discussions which the Council had with the Banks Joint Standing Committee, it transpired that the words could lead to considerable difficulties and so we propose to take them out and leave the section in its original form, without the words in question.
They would be virtually impossible of proof.
Amendment agreed to.
Section 8, as amended, agreed to.
Sections 9 to 11, inclusive, agreed to.
SECTION 12.
Question proposed: "That Section 12 stand part of the Bill."
May I just say that we have discussed this with the Attorney General and he is quite satisfied that the section is not unconstitutional, and that the statement as to law, which I made on Second Stage, is correct?
On your head be it.
Mr. Ryan
I will say, with great respect to the person who occupies the position of Attorney General, that the views of the Attorney General have been more than once upset by the Supreme Court and it would be disastrous if the Solicitors Bill were to be upset for a second time in that Court. We are told that the general purpose of the Bill is to improve what public opinion thinks of the solicitors' profession but, if that profession and the leader of the Bar are to be found twice wrong in a decade, any confidence the public might have in the legal profession would be very gravely impaired.
We find it very hard to understand the reason behind the reluctance of some people to allow an appeal to the Supreme Court. I would say that the number of cases in which such an appeal would be allowed would be very, very few indeed. In most cases when a solicitor is struck off the roll the reasons for that action will be very clear and not open to question but, if there are cases where there are doubts about the legality of what occurs, there ought to be an appeal. I believe that if you do not provide for right of appeal—which will be used in very few cases—you are weakening the whole case. You are running the risk of upsetting the matter again and, as Deputy Sweetman said, on your head be it, and it will not be for want of warning from these benches.
If I understood Deputy Ryan correctly I think he used the words "the legality of which will be in some doubt," and we are giving an appeal to the Supreme Court on a point of law. The point is that on matters of fact there will be no appeal to the Supreme Court. Does Deputy Ryan realise that? There will be an appeal on points of law.
Mr. Ryan
I do, and I should not have used the word "legality." If you like, I shall use the word "propriety" in relation to a solicitor's conduct, but I cannot understand why you limit it to the question of the legality of any decision. I appreciate that that might be interpreted by the Supreme Court as referring to anything which would cause a man to be struck off the roll.
I cannot understand why you do not want to provide this right of appeal to the Supreme Court. Is it felt that it would be used unnecessarily? I think the history of cases of this nature in the past indicates that there have been only two appeals to the Supreme Court in all the years in which solicitors have had that right. It is very dangerous to take that right away now and I cannot see the desirability of doing it.
First of all, I should like to make it clear that if Section 12 is found to be unconstitutional, that will not be any reflection on the solicitors' profession. We must take the full responsibility for this provision. With regard to the question of constitutionality generally, we can only take the best advice we can get and proceed on that basis. We must take all reasonable precautions, and, having done that, I think we are entitled to proceed.
Deputy Ryan asked why we would not allow a full appeal to the Supreme Court in every case. It is fairly likely if that appeal were allowed that every solicitor struck off would be inclined to go to the Supreme Court. To be struck off the roll is a very serious matter for a solicitor and I imagine he would be certainly inclined to go to the uttermost limit before giving in. If that were so, and if every case were to be reheard as to the facts in the Supreme Court, it would be almost equivalent to making a nullity out of this Bill. There would be no point at all in having the Disciplinary Committee of the Law Society and having the procedure we have set out in the Bill. It would eventually amount to the fact that every case would be fully reheard in the Supreme Court.
In giving the appeal to the Supreme Court on a point of law we are being completely fair. Indeed I think we could put up a very strong case for giving no appeal at all to the Supreme Court, but, rather than have any accusations of unfairness levelled against us, we are giving this appeal on a point of law to the Supreme Court. By any reasonable standards it is a fair proposal. If Deputy Ryan asks why we do not give the full appeal, I answer that he should not forget that in all these cases the money with which the solicitor would be fighting an appeal to the Supreme Court would probably be clients' money.
Question put and agreed to.
Sections 13 to 18, inclusive, agreed to.
SECTION 19.
I move amendment No. 5:—
To delete subsection (3), page 11, and substitute the following subsection:
"(3) Where the Society take possession of documents produced or delivered under a requirement under this section—
(a) they shall serve, on the solicitor and on every other person from whom the documents were received, a notice giving particulars of the documents and the date of taking possession thereof, and
(b) if any of the documents are grouped together as relating to a particular matter, the notice may give particulars of those documents by referring to the group and the matter to which it relates."
This amendment is to assist the Law Society. The effect of the amendment will be that where papers on a particular matter in a solicitor's office are grouped together as, for instance, on a file, the notice giving particulars of the documents received from the solicitor need only refer to the group and the matter to which it relates. The amendment is designed to save the Society the labour of having to give particulars of every single document on a file. I may say that Section 19 repeats provisions contained in the 1954 Act and the amendment represents an effort to make these provisions more easily workable.
In other words, all they need say now is "The documents of title referring to Leinster House" instead of specifying the 50 documents?
Yes, but more particularly where there is a file of correspondence, instead of having to give particulars of each letter, you can say "the file in re.”
Amendment put and agreed to.
Section 19, as amended, agreed to.
SECTION 20.
Amendment No. 6 has been discussed with No. 4.
I move amendment No. 6:—
In subsection (1), page 11, to delete "or his or their agent or nominee" in lines 36 and 37 and in line 41.
Amendment agreed to.
Section 20, as amended, agreed to.
SECTION 21.
I move amendment No. 7:—
In subsection (5), page 12, line 12, to insert "or refuse to make" before "a grant".
This, I think, we can all agree is a purely drafting amendment. Its object is to make the proposal in subsection (5) of Section 21 perfectly clear. Some doubt was expressed to us as to the wording of the subsection as it stands.
Amendment agreed to.
I move amendment No. 8:—
In subsection (5), page 12, lines 14 and 15, to delete "when the act of dishonesty was committed" and substitute "at the time when, in the opinion of the Society, the loss arose".
Again, this amendment is designed to provide that the date of the loss is to be a matter for the Society to determine. As I have already explained in regard to amendments 2 and 3, it is proposed to follow the wording of the 1954 Act in this regard.
On what principles will that be decided?
The difficulty we see arising here is that there could be quite an amount of dispute as to exactly the time a loss arose. Would it be the time when the client paid in the money or the time when the solicitor defaulted, or what exactly would be the operative date on which you could say the loss occurred? In order to avoid litigation on that question of fact, we are providing that the opinion of the Law Society will be the determining factor.
But the Law Society will have to come to an opinion according to certain principles?
Certainly.
And those principles are going to be virtually impossible to determine?
I have no doubt they will lay down for themselves, as the Deputy says, a set of principles which they will follow consistently in each case. It is better that we should leave it to be determined at their discretion.
Certainly, I am in agreement with that, but I should like to have some indication of the principles.
That is a matter for them. They must, I presume, act judicially.
Amendment put and agreed to.
Section 21, as amended, agreed to.
SECTION 22.
Mr. Ryan
I move amendment No. 9:—
In subsection (2), line 20, to delete "1962" and substitute "1963".
The reason for my amendment is twofold. On the Second Stage the Parliamentary Secretary said this was a Bill introduced at the request of the solicitors' profession but what in fact is not known is that the solicitors' profession, as a body, has never been given an opportunity of considering this Bill. It is the Council of the Law Society, by agreement with the representatives of the Department of Justice and of the Minister, who have introduced this Bill.
Since this Bill has come before the House, I, for one, have received representations from several solicitors protesting about some of the items in the Bill and particularly about the fact that their views on the Bill were never sought. On that account, it is undesirable that this House should, without warning, say to the general body of the solicitors' profession some time in December or thereabouts: "Before you are going to practise as a solicitor next year you will have to fork out £20 to the Compensation Fund." It is a form of taxation on which the profession as a body has not yet had an opportunity of speaking.
It is most undesirable that that type of penalty should be imposed on any profession. I wonder what this House would say if it were announced that a vet., an accountant or a doctor could not practise his profession until he paid an additional annual levy of this amount and if he were given only one month in which to produce this money? I appreciate that, as far as the majority of adult solicitors are concerned, it is merely a postponement of some other pleasure in order to have the use of the £20 for the Compensation Fund, but there are plenty of struggling solicitors throughout the length and breadth of the country who find it hard enough to make ends meet without having this imposition on them in the middle of December when all domestic expenses are inclined to be high and when all the various bills and tax demands on the 1st January are due. It is most unfair, and there are many members of the profession who think it unfair.
It is not a question of avoiding responsibility for making compensation to people who have suffered at the hands of dishonest solicitors. I think it is an unfair burden which arises to some extent because of the fact that the Law Society were afraid to use some of the funds which they had under the 1954 Act. Some of the difficulties arose because of the collapse of the 1954 Act. Another year should be given in this case. I appreciate that apart from this there was to be a levy of £10 beginning next January.
It is an extra £10 and not £20. I appreciate that this will be a burden on certain solicitors. We all understand that, but I hope the Parliamentary Secretary will alleviate that burden in some of the ways which I indicated to him on Second Reading. It is up to the solicitors, even at the expense of its costing them something extra, for the sake of the confidence of the public to put their own house in order.
I agree fully with Deputy Sweetman and I appreciate the attitude which he has taken up on the Second Stage and again to-day. Whatever about the amount of the subscription being £20, there is no case for putting it back for one year as is intended under this amendment. If saving £10 a year will make all that difference to a solicitor or a firm of solicitors, the probability is that they should not be in business anyway. I should like Deputy Ryan to understand that the Fund is bankrupt at the moment. There are people with claims against the Fund who are waiting to be paid and it was intended that by now these people should be entitled to compensation in full. Does Deputy Ryan want the Fund to remain bankrupt for another year or would he prefer that it be put on a business basis as soon as possible?
I cannot understand the argument that the Council of the Law Society does not represent the profession. It would be inconceivable that there would be acceptance of that argument. The Council of the Law Society is elected by the members of the profession and the solicitors' profession is probably one of the best vocationally organised professions we have. The Council is entitled to speak with absolute authority for the members of the profession who elect them.
In support of Deputy Ryan, he seems to make the case that he is concerned with the young solicitor.
Not in this amendment.
Mr. Ryan
It applies here too.
The usual practice in the medical profession is that the young doctor is allowed to pay a lower subscription.
That is the case here also.
I do not think the Parliamentary Secretary is right when he says the Fund is bankrupt. There has been nothing unpaid from it to date but it is anticipated that there may be some such situation in the future.
Amendment, by leave, withdrawn.
Mr. Ryan
I move amendment No. 10:
In subsection (3), line 30, to delete "three" and substitute "five".
I would like to move Amendment No. 11 at the same time. They are related.
The Deputy may discuss Nos. 10 and 11 together but at this stage No. 11 may not be moved.
Mr. Ryan
Very well. Sir. I appreciate that the Council is elected by the general body of the profession but there are some solicitors who are not members of the Law Society. I have not a great deal of sympathy with those but I agree that, in the main, the Council of the Law Society is elected by the members of the profession. It has to be understood, however, that one has very little chance of being elected unless one is a solicitor of standing, long established and of mature years. I say with great respect that many of these men have forgotten the years of struggle which they experienced as young solicitors.
It is hard enough for a young solicitor to set up on his own without having a levy of £20 imposed on him. In the main, solicitors when they qualify, unless they are sons or other relatives of established solicitors, go into another office as assistants. The wages they get are not equal, in many instances, to those of law clerks or typists. There are some firms who will pay this subscription for such young men but there are some who will not and these assistants, who are not themselves handling clients' money, will have to pay it out of their own pockets. It is not the money of their own clients that they are handling and in all cases they would not be signing cheques or having any dealings with the money of clients.
I think it unfair that such people should have to pay this sum of £20 towards a compensation fund. Being solicitors, they should have to pay something and I think the figure of £5 would be sufficient for such young solicitors to pay. The period of three years is far too short. It means that a solicitor, when he is 24 years of age, would have to pay £20, as the majority of them qualify at the age of 21 or 22. The time should be five years from the date on which he started to practice on his own, that is, five years from the date on which he starts to handle the money of his own clients. I do not think that we should levy £20 on these young men. You may say that it would be unfair to give them this five years at £5 per annum if they were handling client's money. I am trying to be practical and I can say that a solicitor frequently has to wait for many months, and sometimes for years, before he gets in his costs. It is not in all cases that you can get costs immediately. There are many poor people who have genuine claims at law which they have not the money to finance. Very many solicitors advance outlay to contest these cases.
If we had a system of free legal aid, the burden on solicitors would not be as great as it is but, with the costs of litigation and other costs of running an office as they are, solicitors very frequently have to lay out very large sums of money before they get a penny. On that account, I think we are not being unreasonable in suggesting that we allow at least five years from the day a man starts practising on his own. If we add this last straw to the camel's back I am afraid that some young solicitors may use clients' money to pay this £20 levy to the Compensation Fund. That would be a rather Gilbertian situation. Most solicitors who have gone wrong have done so by starting in a small way and then trying to make it up later but like gamblers the good thing never turns up and they get in deeper and deeper.
I suggest, therefore, to the Parliamentary Secretary that if he is not prepared to give me an affirmative answer at this stage he should take up the matter with the Council of the Law Society. I might say in passing that the views I am expressing are my own views and those of a few solicitors who approached me in the last few days and who were not aware of this provision until very recently. I believe no harm will come of it if we allow some further time to permit young members of the profession to get themselves established in practice.
Could the Parliamentary Secretary say what would be the cost per annum of amendment No. 10, leaving out amendment No. 11?
I would not have any idea.
I suggest to the Parliamentary Secretary that when the amendment was put down he could have found out. It is quite possible to find out.
I do not think so.
It is quite easy to find out. It is only a question of calculating the number of solicitors admitted in each of the last three years and of multiplying that by 15. I think that is within the competence of the Parliamentary Secretary.
I think Deputy Sweetman makes it appear a little too easy. The amendment will affect the next three years, not the last three years.
And the Parliamentary Secretary will realise that before a person is qualified as a solicitor he must be apprenticed for a period of at least four years. The number of apprentices at present is known, therefore he can take the percentage of those who are likely to qualify.
I am afraid Deputy Sweetman wants to get into realms of estimation and prognostication into which I am not prepared to follow him.
There is a perfectly good answer to that question— the information can be obtained and I suggest it should be obtained before the Report Stage.
Could Deputy Sweetman not find out for himself through the Law Society?
Certainly I could, but it is the Parliamentary Secretary's job. He is being paid for doing these things and I am anxious that he should earn his bread by the sweat of his brow.
I respectfully suggest to the House that, as I am not prepared to accept the amendment anyway on several other grounds——
Let us hear them anyway.
——I would not be justified in expending Departmental time and energy on the pursuit of such irrelevant information.
I think it is completely relevant. It is only the Parliamentary Secretary's judgment as to whether the House will accept the amendment or not.
In regard to the merits of the amendment itself, I should like to point out, in the first place, that this suggestion that young solicitors be given a concession emanated from our side and not from the Council of the Law Society. In the circumstances, it represents a pretty fair compromise. One could argue that a young solicitor starting off should be in a position to meet all the obligations which any colleague in the profession has to meet. On the other hand, we should all like to give encouragement to the younger members of the profession and help them to some extent. It is simply a question of where to draw the line. I think to give the reduced subscription of £5 for a period of three years is pretty fair in all the circumstances when one bears in mind that it is their colleagues who will have to make up the discount we are giving them.
In regard to the second amendment of Deputy Ryan, amendment 11, I am afraid I cannot accept that amendment either because it would lead to some anomalies. The position could arise where a solicitor would qualify, take up a position outside the profession for perhaps 10 years and — if Deputy Ryan's amendment were accepted—come back and start practising at the end of that time and be entitled to claim this concession. We intend the concession to apply only to young solicitors immediately after qualifying, and I do not think there is any case to be made for applying it in other cases.
You might also have this anomalous situation. Take the case of a solicitor, again if Deputy Ryan's amendment were accepted, who works as a solicitor in the office of another solicitor for more than the three-year period and becomes liable for the full subscription of £20 a year and then subsequently decides to practise on his own. That solicitor would then revert to the £5 a year subscription. Such a situation would be ridiculous and unfair and, as Deputy Ryan's amendment would have that result, I must ask the House to reject it.
May I say in relation to all this that I feel very strongly inclined to the same view as the present President of the Law Society who, in a recent address, urged on young solicitors the desirability of pondering well before they went into practice on their own? He pointed out to them that in existing circumstances a fair amount of backing and a fair amount of capital are required for practice, and he urged them, if at all possible, to try to join some existing well-established firm of solicitors and to be absolutely sure of their ground and of adequate resources before venturing into practice on their own. That was very sound advice. Neither the President of the Law Society nor I, myself, would like to discourage completely any young solicitor from starting on his own. If he does consider starting on his own, he should, I feel, consider it well beforehand.
Deputy Ryan should not come along and say that young solicitors are entitled to start on their own and entitled to be trusted and that one need not worry about their becoming honourable and reputable members of the profession if, at the same time, he argues that they would not be in a position to meet this requirement of £20 a year towards the Compensation Fund after three years.
Has the Parliamentary Secretary got the number of solicitors who qualified for the first time last year or the year before—any convenient year?
I shall obtain those figures for the Deputy.
I think the cost of amendment 10 would be about £700 a year.
I am not asking the House to reject the amendment on the ground of cost. I am not so much concerned with the cost of it as with the underlying principle.
Mr. Ryan
I find myself taking exception in one way to what the Parliamentary Secretary says. If we want the solicitors' profession to be a snob profession, a profession for the sons of solicitors, then there is nothing to be said for these ideas which suggest that a lesser man who may not come from a long line of solicitors or from a family of substance can be an honest solicitor. It is all wrong to try to turn the solicitors' profession into the preserve of the well-to-do who have big capital. I believe it is quite possible for men to be good and honest solicitors and yet to be unable to bear without some pain this unnecessary expense which is being imposed upon them. Incidentally, may I say in passing that the Parliamentary Secretary is taking my two amendments as being two separate ideas? When I asked leave to discuss them together I emphasised that they were one and the same idea. Under the Bill, the position of a man who is an assistant in a firm and is not handling his own accounts or clients' money would be that, after a period of three years from qualification, he would have to pay £20, even if he continued as an assistant. That is most unfair.
The Parliamentary Secretary has wrongly interpreted my remarks. My two amendments provide that a man who remains an assistant all his life will not have to pay into the compensation fund any more than £5 per annum, but if he becomes a solicitor on his own account, he will pay £5 per year for the first five years and thereafter will have to pay £20 per annum.
I appreciate the necessity for solicitors having some resources. As I said earlier, I emphasise that they have to expend a considerable amount of money before they get anything back in costs. In fact, a solicitor has to have some considerable machinery and overhead expenditure in order to furnish his bill of costs at all long before being paid. He has to maintain costs drawers and typists. Other people can sell goods or services, and there and then present bills or accounts and demand prompt payment, but a solicitor has to expend years of energy and brainwork on one case and after completion must expend an amount of money to draw up a bill of costs. Those costs may be taxed and he may not get them in full or a considerable time may elapse before he is paid. I appreciate that he must have some resources but I think it would be undesirable if this House should for any reason at all endorse the notion that the solicitors' profession must be reserved for the well-to-do sons of existing solicitors, and that one cannot be a good or an honest solicitor unless one is in a long established firm. Honesty is something ingrained in a person.
I believe that if an examination were made into the reason why some solicitors went wrong, in many cases it would be found that it was not a question of their being poor or finding it hard to make ends meet, but that they had been living beyond their means, which is an entirely different thing. It would not be desirable for us to over-emphasise what the Parliamentary Secretary has said and what successive Presidents of the Law Council have said. I appreciate the wisdom of it, but I should hate it to be accepted as being so true that no other opinion could be considered.
I should like to appeal to Deputy Ryan on this point and to ask him to face the realities of the situation. He is arguing the case of a young solicitor starting off in practice and he wants to suggest to me that we should be concerned about such a young solicitor who, after a period of three years, would not be in a position to meet, out of his resources and fees, a charge which amounts to less than 8/- per week.
Mr. Ryan
But it has to be paid at one time. That is the difference.
If a young solicitor decides to go into practice at all, and to face up to all the expenses a practice involves, and even the delay in receiving costs to which Deputy Ryan referred, surely it is foolishness to suggest that—if he is ever to be solvent— he will not be in a position to bear this charge after three years. By the way, I hope it may not be very long before the Law Society are able to reduce this subscription of £20 a year.
The situation we are dealing with at the moment is, therefore, an unusual and, I trust, a unique one. The fund at the moment has accumulated liabilities and it is unable to meet those liabilities. We are trying to put that situation right. The solicitors' profession honourably and manfully, as Deputy Sweetman pointed out here, have faced up to that situation and have taken on their shoulders the obligations proposed in this Bill.
We have made a concession to young solicitors. We think it is a valuable concession, and I think it is a bit unreal of Deputy Ryan to argue, as he is arguing, that we should extend this concession from three years to five years. As I said, it is a question of holding the scales evenly between the young solicitors and their older colleagues. I think our proposal is a good one.
Amendment, by leave, withdrawn.
Amendment No. 11 not moved.
I move amendment No. 12:—
To delete subsection (4) and substitute the following subsection:
"(4) (a) At any time in any practice year, being—
(i) the practice year next following that at the end of which, for the first time, the total amount standing to the credit of the Fund (including the value of all investments forming part of the Fund but after deducting all outstanding liabilities) is more than £25,000 or
(ii) any subsequent practice year,
the Society may, if they think fit, determine that every solicitor taking out a practising certificate in respect of the next following practice year (not being a certificate issued to him within the period of three years beginning on the day of his admission) shall pay to the Society, as the annual contribution payable under subsection (2) of this section in the case of that year, such amount greater or less than twenty pounds as the Society may fix.
(b) In exercising the powers conferred by the foregoing paragraph, the Society shall have regard to the principle of maintaining the total amount standing to the credit of the Fund (including the value of all investments forming part of the Fund but after deducting all outstanding liabilities) at £25,000."
The object of this amendment is to clarify the purposes of subsection (4) of Section 22. The contribution is to remain at £20 until a reserve of £25,000 has been built up. Thereafter the Society may, for any year, reduce the contribution but in so doing they must have regard to the principle of keeping the reserve at £25,000. Similarly, if the question of increasing the contribution arises. As we visualise it, the normal contribution will be not more than £20, unless circumstances justify an increase. However, the Society's powers to increase are limited by the fact that they must have regard to the amount of the reserve. If they wish to keep the contribution at £20 and build up a more substantial reserve than £25,000, there will be nothing to prevent them doing so. Reducing or increasing the contribution is a matter for the Society, subject to this. Any decision involving reduction or increase in the contribution must be arrived at having regard to the £25,000 reserve.
I should like to add that the Bill envisages an annual accountant's certificate side by side with a compulsory compensation scheme. As I stated in my speech on Second Stage, one of the objects of the accountant's certificate is to protect the Compensation Fund.
Is that, in fact. Section 4 in another way?
It is, in fact, Section 4 in another way. It is just to make a little clearer the fact that the Council of the Law Society have the discretion to increase the subscription of £20 but, in fact, it is the same basic idea.
Amendment agreed to.
Section 22, as amended, agreed to.
Sections 23 to 30, inclusive, agreed to.
SECTION 31.
I move amendment No. 13:—
In page 17, to delete subsection (5)
This is a drafting amendment. "Misconduct" is defined in Section 3 (1) of the Bill as including "the contravention of a provision of the Principal Act or this Act or any order or regulation made thereunder". There is, accordingly, no need to state in subsection (5) of Section 31 that failure of a solicitor to comply with the provisions of this section or the accountant's certificate regulations will be misconduct. We have already defined misconduct to include that.
I agree it is not necessary to have it there and, possibly, for the sake of tidying the Bill, it is as well to take it out; but, from the point of view of a number of solicitors, whose attention may not otherwise be specifically drawn to this, it might not be any harm to leave it in.
It is clearly set out in the original definition section what constitutes misconduct. I think every solicitor will be fully aware of the fact that contravention of the Accountant's Certificate Regulations will be misconduct in the light of that definition.
As far as the Bill goes, it is clearly not necessary to have it here.
I should think that Deputy O'Higgins, as a solicitor, would like to avoid any unnecessary sections in the Bill.
Mr. Ryan
Would the Parliamentary Secretary like to express an opinion as to whether or not a right of appeal will lie to the Supreme Court in the event of a dispute?
A dispute between whom? Is it a dispute between Deputy O'Higgins and myself as to whether a subsection is better in the Bill or out of it?
Mr. Ryan
Will an appeal lie to the Supreme Court?
Misconduct is clearly defined in section 3 of the Bill.
Deputy Ryan's point is that, if what is alleged is found to be misconduct by the High Court but is not, in fact, covered by the Bill, would there be a right of appeal to the Supreme Court or would a question of fact be determined by the High Court?
That is a realm into which I certainly shall not enter. The provisions are quite clear. The committee reports on questions of fact, and the High Court acts on their report.
Amendment agreed to.
Amendment No. 14 was discussed with amendment No. 1.
I move amendment No. 14:—
In page 17, to delete subsection (8).
Amendment agreed to.
Section 31, as amended, agreed to.
SECTION 32.
Question proposed: "That Section 32 stand part of the Bill."
Does this operate in relation to a bankruptcy before the date of the passing of this Act?
No.
Does it operate in relation to the administration of an estate of a solicitor who died before the passing of this Act?
No.
Is the Parliamentary Secretary sure that it is not the date of the primary decree which is relevant, and not the date of death? I am not trying to catch the Parliamentary Secretary out—I want to know. I suggest he consider that aspect before to-morrow because there is some doubt.
I certainly shall. My advice is that the answer to both questions is "No", as far as we know. However, we shall look into it.
Would the Parliamentary Secretary mind checking on it between now and the Report Stage?
I shall try.
Question put and agreed to.
Section 33 agreed to.
FIRST SCHEDULE.
I move amendment No. 15:—
To insert in Part I the following entry after the eighth entry:
"Section 70.
The whole section.
"
With the permission of the House, I propose to take amendments Nos. 15 and 16 together.
These are drafting amendments. Section 70 of the 1954 Act should appear in Part I of the Schedule and not in Part II. The section deals with the contributions to the Compensation Fund and will be spent on the passing of the Bill into law. Section 69 of the 1954 Act and the Fifth Schedule to that Act contain specific provisions for the existing Compensation Fund and for payments to clients. These provisions are, by reason of section 5 of the Bill, being continued in operation but only in so far as they apply to losses occurring before this Bill becomes law.
Amendment agreed to.
I move amendment No. 16:—
To substitute in Part II the following entry for the first entry:
"
Section 69.
The whole section.
"
Amendment agreed to.
First Schedule, as amended, agreed to.
Second Schedule agreed to.
THIRD SCHEDULE.
I move amendment No. 17:—
In paragraph 6, page 21, line 29, to insert "protecting", before "administering".
This amendment is designed to make it clear that the payments out of the Fund shall include costs, charges and expenses incurred in protecting the Fund. The Council of the Law Society have suggested this amendment in order, for example, to make the Fund liable for expenses incurred in connection with compulsory audits of solicitors' accounts under the Solicitors' Accounts Regulations. It is felt that if expenditure is incurred protecting the Fund, the expenses are properly chargeable to the Fund.
Amendment agreed to.
I move amendment No. 18:—
In paragraph 6, page 21, to insert the following subparagraph before subparagraph (f):
"(f) costs, charges and expenses incurred by the Society in enforcing compliance with the Solicitors' Accounts Regulations and ascertaining whether those Regulations have been complied with".
This amendment proposes to charge the Compensation Fund with costs and expenses incurred in enforcing compliance with the Accounts Regulations and also in ascertaining whether those Regulations have been complied with. Section 66 of the 1954 Act which provides for the making of regulations regarding the accounts of solicitors specifies that the regulations shall make provision, inter alia, for enforcing compliance with them and ascertaining whether they have been complied with.
Amendment agreed to.
Question proposed: "That the Third Schedule, as amended, be the Third Schedule to the Bill."
Is it clear that any payments made out of the Compensation Fund will not be liable to income tax?
I suggest that that is a question which might more properly be addressed to the Minister for Finance.
No. It depends vitally on the manner in which this Schedule will be operated.
The only thing I can say is that income tax, as Deputy Sweetman knows as an ex-Minister for Finance, is essentially a tax upon income.
It started like that.
Question put and agreed to.
Title agreed to.
Bill reported with amendments.
When is it proposed to take the Report Stage?
Could I have it now?
To-morrow. Might I put one matter to the Parliamentary Secretary? As I understood him, the provisions of Section 32 do not come into force where a bankruptcy takes place before the passage of the Act, where the death of the solicitor takes place before the passage of the Act, where the primary decree for administration has not been made. I should like him to consider, between now and Report Stage, whether it might not be better that these provisions should come into effect in the case where a solicitor may be dead and where a primary order for administration has not yet been made. The Parliamentary Secretary may be aware that the primary order for administration is the equivalent of the order for bankruptcy in the case of a person who is still alive. The administration operates in the case of a person who is dead. If this section be not included, the amount of difficulty in ascertaining priorities is fierce. It is a very good section from that point of view. If it can be done without going into retrospective and retroactive legislation, it might be worth considering it.
I shall have that examined. I hope to be in a position to give the answers if I can to-morrow. The Deputy will bear in mind the undesirability of retroactive legislation.
Certainly. It could not be done where the primary order has been made. Where a primary order has not been made, there might be an opportunity of avoiding very great expense.
I shall consider all that.
Report Stage ordered for Thursday, 3rd November, 1960.