Solicitors (Amendment) Bill, 1960— Second Stage.

Wednesday, 9 November 1960

Seanad Eireann Debate
Vol. 53 No. 1

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Question proposed: “That the Bill be now read a Second Time”.

Parliamentary Secretary to the Minister for Justice (Mr. Haughey): Information on Charles J. Haughey  Zoom on Charles J. Haughey  This Bill, which is a much more comprehensive one, replaces the Solicitors (Amendment) Bill, 1958, which was withdrawn in the Dáil in February last.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 [8] 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 [9] 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.

[10] 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 [11] 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 [12] 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 [13] 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 [14] 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 [15] 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 [16] 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?

Mr. Burke: Information on Denis Burke  Zoom on Denis Burke  This is a Committee rather than a Second Reading measure and therefore we do not propose to delay the House on this Stage. As the Parliamentary Secretary has explained to us, it is designed to make rules and regulations for the better ordering and management of the profession, and also to give powers wherby disciplinary measures can be taken, where necessary.

I was glad to notice that the Parliamentary Secretary, when speaking about this profession, said that as in other walks of life, there may be some black sheep in it from time to time, but that should not be regarded as casting any reflection whatever on the general body of this very honourable profession. The disciplinary measures will be taken by the profession itself. Most of the sections that appear in this measure appear with the consent of the Incorporated Law Society.

I do not propose at this juncture to delay the House any longer. Any amendments or suggestions we have to make relative to the Bill will be made on Committee Stage, as it is more appropriate that it should be done at that time.

Mr. Louis Walsh: Information on Louis Walsh  Zoom on Louis Walsh  I should like to thank the Parliamentary Secretary and the Senator who has spoken for the kind tributes they have paid to the majority of the members of my profession. I think, however, that the Parliamentary Secretary made an understatement when he said that reputable solicitors are in the majority. In view of the fact that the number of defaulting solicitors is approximately three out of 1,300 or 1,400 in the country, the percentage is extremely low.

[17] As a Parliamentary Secretary has pointed out, solicitors deal with the personal affairs and the accounts of many helpless people. For instance, they deal with very old people who have considerable savings or with young people who are next-ofkin or legatees or who benefit under substantial decrees awarded by a court. These people must depend on the integrity of solicitors and the guidance which they obtain from them. It is obvious, therefore, that considerable funds pass through solicitors' hands each year for investment or for holding in trust.

Accordingly, there is a fair amount of temptation placed in the path of solicitors to use such moneys from time to time to tide them over personal difficulties because of over-spending or domestic reasons. It is right, therefore, that the State should be concerned that the practitioners are worthy of the trust the community places in them and that it should see that that trust is honoured.

The Council of the Society have been waiting for some considerable time for the introduction of this Bill because of the void created by the decision in the case of O'Farrell & Gorman in the Supreme Court, which resulted in the Disciplinary Committee losing its power to deal with defaulting solicitors and to take the necessary action against such people. As a consequence of this lack of power, these cases which have been held up may have resulted in some solicitors being more negligent than they would otherwise have been and claims against the Compensation Fund being of considerable size.

I appreciate the difficulties in dealing with this new legislation owing to the constitutional issue that was raised and the considerable discussions that must have taken place between the Law Society and the Minister, the Parliamentary Secretary, the officials of the Department of Justice and subsequently the Attorney General. At any rate, it is satisfactory that this Bill has now been brought forward and the Law Society will again be in a position to deal adequately with defaulting members and thus protect and [18] build up the Compensation Fund, the reserve of which must be £25,000 as provided in the Bill.

The passing of the Bill should undoubtedly add to the prestige of the solicitors' profession and adequately safeguard the interests of the public in dealing with the individual members of the profession.

It must be appreciated that it was the Law Society themselves that suggested the setting up of this Compensation Fund, and the regulations made under the 1954 Act. The burden of building up this Fund will undoubtedly impose sacrifices on individual members, particularly in rural areas where practices are fairly small and the funds passing through solicitors' hands are ever so much less than those passing through the hands of solicitors with big practices in the better-off areas.

The Parliamentary Secretary has explained and dealt adequately with the provisions of the Bill. The proposal in Section 31 will undoubtedly tighten up the regulations as to the keeping of adequate accounts and should, as the Parliamentary Secretary stated, save solicitors from themselves and encourage them to keep on the straight and narrow path. It should also mean that eventually the demands on the Compensation Fund will not be as great as they are at the moment, and that ultimately the premium which the solicitor will be required to pay will be less than the £20 set out in the Bill. The Society accepted the obligation to establish the Compensation Fund only on the understanding that they would have sufficient control over their members properly to protect the Fund. For these reasons, I am pleased to be able to recommend the House to pass this Bill.

Mr. Cole: Information on John Copeland Cole  Zoom on John Copeland Cole  I fully endorse the remarks of speakers in this and the other House with regard to the satisfaction that must follow from the fact that this Bill has the practically unanimous approval of the profession. As Senator Burke has said, this is more or less a Committee Bill, but I should like to ask the Parliamentary Secretary a few questions about it. One aspect does slightly disturb me. I cannot follow what the procedure would be if court [19] proceedings were pending or an action being brought against a solicitor where the Disciplinary Committee might also be inquiring into a claim. Does this committee wait until any proceedings pending in a court are finished or will the committee take action on their own in camera perhaps or in some other way, or would their proceedings be harmful in any way to the solicitor? There might be some doubt and the solicitor would be entitled to that doubt. Where does this committee's function come in and where does the court case come in?

The sections from Section 19 on cover the position where the Society are of opinion that a solicitor has been guilty of dishonesty or misconduct. Would it not be more proper and more in the interests of a solicitor who might, in fact, be accused wrongly if another solicitor, acting on the instructions of the Incorporated Law Society, could be quietly placed in his office with full power to carry on the business, instead of giving power to the Society to take control of trust and other documents, and to give notice to the bank that certain accounts must not be dealt with, which makes the whole thing rather public? There must be cases where there is no necessity to make the proceedings public at all until further inquiries are made. These are two aspects in defence of a solicitor who might be wrongly accused on which I should like the Parliamentary Secretary to comment.

With regard to the £25,000, would it not be better to use that by way of some sort of fidelity bond or something of that nature? It occurs to me that £25,000 nowadays in a big solicitor's office, particularly a solicitor's office in the city of Dublin, is not a very large sum. He might easily handle that in one transaction for one client. If a solicitor tended to be dishonest, he would obviously wait until the occasion arose when he would handle some such big sum. There could be other ways of securing compensation. Each solicitor could insure himself. I should like to have the Parliamentary Secretary's comment on whether that [20] £25,000 would be adequate at all at the present day.

Section 32 contains provisions in relation to certain accounts kept by a solicitor at a bank. Could we not add to that another section to the effect that any further sums in the solicitor's hands could be easy recognisable as clients' funds? Take the case where a solicitor is going bankrupt.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  The bankruptcy rules apply to them, anyway.

Mr. Cole: Information on John Copeland Cole  Zoom on John Copeland Cole  Could we not take that out of it? Take the case of a solicitor who knows on the day before proceedings are to be taken against him, that some clients' money is to come into his hands. He lodges that to his own account. The money in question is a very recognisable sum. Would it not be possible to include such words in that section as “the recognisable sum” which could be saved on behalf of a client?

Mr. Murphy: Information on Dominick F Murphy  Zoom on Dominick F Murphy  I welcome this Bill and I am glad to know that the solicitors' profession, like any other profession, welcomes an effort to lift the general standard. Much stress has been laid upon the defalcations, dishonesty and loss of clients' money, but I have the impression, from what little dealings I have had with the profession, that perhaps, most of it is not real dishonesty, but rather a lack of business methods. In the solicitors' profession as such, there seems to be a tradition of old fusty, musty books and the lack of a modern approach in dealing with accounts and business generally. The Bill cannot obviously do anything for that. It is a matter for the profession itself—if my impression is correct—to try to ensure that standard or give training in this direction to solicitors—not simply training in law but training in business methods and administration.

Another aspect of the profession which I think is open to some complaint are the delay and failure to carry out work expeditiously. We know it is difficult to deal with the law. We know it is difficult to dispose of estates. I have had complaints from people with comparatively small [21] estates that the time taken by the solicitor in going through the necessary work is often very alarming. Again, while the Bill cannot do anything about this, the profession as such should, try to encourage expedition in dealing with such work and if the Department can help by streamlining their machinery, then I should hope that it would do so.

As I said at the outset, I do not think there is very much real dishonesty. There is very little. Much of the trouble arises from perhaps lack of training in business methods and the fact that things get into a mess because the solicitors do not approach the problem properly, in the first instance.

Professor Quinlan: Information on Patrick Michael Quinlan  Zoom on Patrick Michael Quinlan  Like the other speakers, I welcome this Bill and I welcome it especially because it is presented as a Bill agreed with the Law Society. Its provisions and the changes from the 1954 Act go a long way towards meeting conditions to-day and this applies especially to the Compensation Fund; but I should like to ask the Parliamentary Secretary about the magnitude of this; £25,000 does seem to be a very small fund to meet liabilities for the whole country. Again, in regard to the charge of £20 —and of course if the fund is increased or has to be increased in the future, that charge would naturally be increased—I should have thought that some system of levying the charge on the income of the solicitor, or on his whole turnover, rather than a flat per capita charge, would be more equitable. For instance, a small country solicitor who is barely making ends meet will apparently be asked to make the same contribution as a solicitor carrying on a prosperous business in a large town. That is scarcely equitable.

The Parliamentary Secretary stressed, in regard to Section 12, that the slight curtailment of powers and the recognition of the finality of the decisions of the High Court, except in matters relating to the interpretation of the law, was very fair and reasonable. I should like to know: did the Law Society actually agree to those powers? Are they in full agreement [22] with Section 12? Again, in connection with the Compensation Fund, it is essential that the Law Society should have the maximum control of it, since they are the body creating the fund. In regard to Section 31, the Parliamentary Secretary mentioned that two slight powers of the Law Society were whittled down, for instance, that a solicitor has to be automatically admitted by the Law Society when he has carried out his penalty. Seeing that this admission brings him back as a participant in the fund, I should like to know if the Law Society is in agreement with Section 31?

I fully endorse what has been said by Senator Murphy and the need for having legal matters dealt with more expeditiously. I had some experience of that recently, of the length of time it takes to carry out even what appears to be simple transfers, and it is very baffling. I hope that we may see a big improvement in this and probably the best way to secure it would be the provision of the annual account which will be mandatory in a short time.

Mr. P. Crowley: Information on Patrick Crowley  Zoom on Patrick Crowley  I also want to welcome this measure and the purpose for which the Bill is introduced, but, like some of the other speakers, I am troubled about one or two aspects which strike me as being contradictory, particularly in the light of the statement made by the Parliamentary Secretary. What troubles me is that we are told the Bill has been made necessary because of a ruling by the Supreme Court which invalidated an order given under the old Act and we are told there is a necessity for putting that right and making the orders of the new Disciplinary Committee, and so on, constitutional. I think Senator Quinlan, like myself, is a bit troubled about the actual effect of Section 12 which says that—

(1) Subject to subsection (2) of this section, an order of the High Court under Section 8 of this Act....

and so on—

...shall be final and not appealable. The section then goes on to say in the second part——

[23] By leave of the High Court, an appeal, by the Society or the solicitor concerned, from an order of the High Court under Section 8 of this Act, under that section as applied by Section 11 of this Act or under Section 9 or Section 10 of this Act shall lie to the Supreme Court on a specified question of law.

That section seems to me to impose a certain restriction, either on the freedom of the individual solicitor or on the Incorporated Law Society itself, to proceed with an appeal from the High Court to the Supreme Court. As a layman, that strikes me as being restrictive and I should imagine it must in some way be regarded as unconstitutional. I understood the Parliamentary Secretary to say that he had the opinion of the Attorney General that this section was in fact constitutional. With all due respect to the opinion of the Attorney General, Attorneys General have been held not to be infallible in the past and in fact we have it offered here as a defence of this Bill that an order of the Disciplinary Committee under the old Act was held to be unconstitutional. That being so, I should like to hear the Parliamentary Secretary further on this section and it would be interesting to know has that section been agreed to by the Law Society. It seems to me to be restrictive.

Professor Hayes: Information on Michael Hayes  Zoom on Michael Hayes  As the Parliamentary Secretary appears to be overwhelmed with welcomes, I might as well add my voice to what has been said by other speakers. The Bill is necessary from the point of view of the solicitors, their clients and the public. It provides machinery which it is hoped is now constitutional for dealing with cases of the dishonest solicitor. I was very glad the Parliamentary Secretary pointed out that clients themselves sometimes contribute to their own undoing and to their own disasters by the way in which they themselves behave and the kind of solicitors they select. The negligent client is not going to be indemnified under this Bill when it becomes an Act.

[24] Something has been said about the £20 contribution. It is a minimum figure and although the Law Society hoped it would be reduced, it must be remembered that the Bill contains provisions for allowing it to be increased, and it might be increased, but of course one hopes that that will not happen. The true story regarding the underlying principles of the Bill is that the solicitors are an honourable profession; they are trusted by the public; and the vast majority of them are worthy of the trust reposed in them. It is the purpose of this Bill that they must pay for the trust which the public places in them and if a person goes to a solicitor who is still on the roll and who is negligent and dishonest, the client will not suffer. I have to agree with the Parliamentary Secretary that there is no other scheme except the one in this Bill for creating a fund which will accomplish that end.

There were some points made by Senator Murphy which may very well be true, that the dusty and fusty atmosphere gives an impression of reliability and integrity and is attractive. The Bill contains provisions which will make all solicitors keep their books in an up-to-date manner because they have to be subject to inspection. Although I have not looked at the matter lately, I think at present that, when solicitors are doing their course, they do a certain amount of accountancy, but I have not got much faith, and I am sure the Parliamentary Secretary will agree with me, in the possibility of teaching people accountancy when they are doing law. They get some——

Mr. Murphy: Information on Dominick F Murphy  Zoom on Dominick F Murphy  Teach accountants law?

Professor Hayes: Information on Michael Hayes  Zoom on Michael Hayes  I do not think accountants are lawyers, and I am not sure that lawyers can be accountants, but if it teaches them enough to convince them they cannot do their account themselves, I think that would be a good thing and a good deal of Senator Murphy's complaints will have been eradicated.

Some people have said that this £25,000 is not sufficient. I am sure the Parliamentary Secretary has information [25] on that, and it would be a very strange year, I think, in which £25,000 would have to be paid out of the funds. I should like to go on record as disagreeing with Senator Quinlan when he says that the fund should be on a sliding scale, that the bigger the solicitor, the more he will pay. Their accounts are already mulcted by way of income tax and should not be mulcted again in this way. The only way in which it can be done is the way it is being done in the Bill, and one can only hope that the amount will not be increased, that the provision in the Bill for the proper keeping of accounts—two bank accounts: a personal and a clients' account—and the inspection of the books will considerably reduce the danger of the clients' account being in any way defrauded. I can only express the hope that the Bill which is a great improvement from that point of view will work satisfactorily and that it will not break itself upon any constitutional rock in the ocean.

Mr. O'Reilly: Information on Patrick Firmullagh OReilly  Zoom on Patrick Firmullagh OReilly  It appears to me that this Bill is really an attempt to marry principles that are to some extent incompatible. This Bill seeks to safeguard the public from being defrauded and, at the same time, it hopes to give the rights which the Constitution guarantees to every citizen. It is not easy to marry those principles and I suppose it was for that reason the previous Bill foundered. With Senator Hayes, I trust that this Bill will not founder.

In dealing with this matter, one must take a common-sense point of view. It is the duty of the Government, Parliament and the Law Society to safeguard the general public and this Bill attempts to safeguard the interests of the clients who are the general public, even though it may curb the activities of solicitors. I agree with Senator Murphy and other Senators who maintain that quite a lot of this difficulty could be avoided. I am convinced it is not sheer dishonesty on the part of solicitors which causes this difficulty. I think it is carelessness in the method of practising. Many people seem to think that professional men make very bad businessmen—not [26] necessarily solicitors. It has been said about other professions; it has been said about University professors, doctors and such people. If over the years the Law Society had tried to develop a standard method of practising and had got their members to adopt such a standard, some of the difficulty could have been avoided.

Under this Bill, a solicitor will now have to call in an accountant to do his accounts and certify to the Law Society that his clients' accounts are in order. If the Law Society had in the past got a firm of accountants or technicians to develop standard or routine methods which the solicitors could adopt in the running of their business, some of the cases of clients finding themselves in difficulty could have been avoided.

I am speaking from the clients' point of view. I hold no brief for solicitors, except to be fair to them, but I am satisfied that it is not dishonesty, initially at any rate, but carelessness in their methods which has caused solicitors in many cases to get into difficulty. In the long run, the duty of the Law Society and of Parliament is to safeguard the interests of the clients and I hope this measure will achieve that purpose.

It has been suggested by Senator Quinlan and by Senator Hayes, I think, that £25,000 is not sufficient. I am of the opinion that it is only an iron ration and that the Fund may go much higher than that, but a minimum must be held in reserve to safeguard the interests of clients. If it is found in the light of experience that the sum is not enough, I am sure the Parliamentary Secretary or some other Parliamentary Secretary, after consultation and agreement with the Law Society, will come before the Dáil and the Seanad and ask that another look be had at the matter. It is only proper that that should happen, if the sum is found to be inadequate.

The main point I want to make is that even at this late stage, if the Law Society called in some experts on accountancy to have a look at the whole method of practising on the part of solicitors in dealing with their clients' accounts, it might be possible [27] for them to produce some formula along the broad lines of which solicitors would be compelled to work. In my view, that would eliminate many of the difficulties and if it were done, it would be a good thing for the Law Society, for clients and for solicitors.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Let me say, first of all, that I fully agree with what Senator Walsh said as to the use of the word “majority” in my opening remarks. I agree wholeheartedly that the overwhelming majority of solicitors are honest and reputable; and, indeed, I would go further and say that when one takes into account the volume of funds which passes through solicitors' hands, the amount of the defalcations is quite negligible when related to the total.

Senator Cole raised a point about criminal proceedings. I think there is no doubt that if criminal proceedings in the courts are instituted or pending against a solicitor, then the Law Society will almost certainly await the outcome of such proceedings before taking any action. The Disciplinary Committee of the Law Society will deal only with misconduct, which is defined in Section 3 of the Bill as including a felony or misdemeanour.

I do not think the Senator's suggestion that the Law Society should be entitled to put another solicitor into the office of a solicitor about whom they had doubts would be at all feasible. I cannot see this working out in practice; and I do not imagine it would be very desirable.

With regard to the size of the Compensation Fund, mentioned by Senator Cole and others, the reserve of £25,000 is a pure reserve; in other words, it is a net figure to be arrived at after providing for all outstanding liabilities. Taken in that light, it is a fairly adequate reserve. However, if it proves inadequate, the Council of the Law Society have agreed with me that we consider the matter afresh with a view to providing for a more substantial figure. There is nothing to prevent the Council of the Law Society permitting a greater amount than £25,000 to accumulate, provided they do not increase the contribution [28] beyond £20 to achieve this. They may leave the amount at £20 for the required period. If that brings about a higher reserve, as undoubtedly it should in time, there will be no need to amend the law.

Senator Cole also asked about insurance bonds for solicitors. We have considered that matter carefully but we are satisfied that the system in the Bill is a much better one. In passing, I should point out that the Law Society may invest and undoubtedly will invest any funds in the Compensation Fund as advantageously as possible. We would hope that after a period the income from those investments would go to swell the Fund.

Where any person, who cannot himself provide against a possible disaster, goes to an insurance company, he joins a group and procures the overall protection of that group. Why should solicitors not do that for themselves instead of going to an insurance company? Everybody concerned is within the profession. In fact, the Compensation Fund is a compulsory insurance scheme, the only difference being that it is run by the Law Society and not by some outside body. There would be many difficulties in trying to enforce an insurance bond scheme for solicitors. Not the least, I think, would be the fact that the annual premium would undoubtedly be much higher than the annual contribution to the Fund. We hope that in time that that contribution will be reduced.

Senator Cole raised, in connection with Section 32, a question as to the administration of the funds of a solicitor who becomes a bankrupt or who dies insolvent. I think I can assure the Senator that in the type of case he outlined, where a client pays money to a solicitor that is clearly identifiable, that money would undoubtedly be regarded as trust money in that solicitor's hands.

Mr. Cole: Information on John Copeland Cole  Zoom on John Copeland Cole  No matter where it might be lodged?

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  No matter where it was lodged. If the money was clearly identifiable as the client's money, there would, as I see it, be no difficulty. [29] Where a solicitor becomes bankrupt or dies insolvent at the moment, the ordinary bankruptcy rule, which we can agree, I think, are the fairest, apply to all moneys in his possession which are not clients' moneys: but the rule in Clayton's Case applies to the clients' funds. Section 32 applies the bankruptcy rule to these funds, so that from now on all funds, whether ordinary assets or clients' moneys, will fall to be administered in the same way.

Senator Murphy dealt with matters which are not, strictly speaking, my concern. One of the points he touched on was also dealt with by Senator O'Reilly and Senator Hayes. I refer to the question of business methods in solicitors' offices. I agree fully that very often the trouble a solicitor gets into arises not from any original dishonest interest but from casual or slipshod methods. There have been cases of solicitors becoming bankrupt and being struck off the roll, where, if their affairs had been properly managed and all the costs due to them regularly collected, no serious difficulty would probably have arisen.

I would certainly agree with Senators in this matter of good business methods and I would appeal to these solicitors concerned to be efficient in their office methods. As Senator Hayes says, it is not possible, I think, or even desirable, to transform all solicitors into first-class accountants. A solicitor is primarily concerned with being a good lawyer and adviser. I am not sure there is not a certain contempt among some solicitors for the bookkeeping profession and books in general. That may be so. However, if, as Senator Hayes says, the Law Society, in its educational courses, can succeed in persuading solicitors not to become good bookkeepers but to appreciate the idea of good bookkeeping, the Society will be doing a very good job. Good bookkeepers are readily available. A solicitor can have first-class books and excellent accounts without, I would say, his ever looking at them or taking any part in the writing up of them.

We should all like solicitors, and indeed all the professions, to be more [30] expeditious in carrying out their affairs. Possibly there is a certain tradition of cautiousness and carefulness in the legal profession. I think a similar tradition, to some extent, exists in the accountancy profession. If we in the Department of Justice can do anything to facilitate solicitors in the expenditious discharge of their business, we shall do so.

I could not at all entertain Senator Quinlan's suggestion that the contribution to the Compensation Fund should be based on a solicitor's income. If, as a mathematician, he examines his suggestion carefully, he will realise that not alone would it be unjust but that it would certainly also be impracticable and most difficult to put into operation.

Senator P. Crowley gallantly and courageously entered into the realms of constitutional law. I am not sure that he did not set himself up to be the equal of the Attorney General in this field. I want, first of all, to point out to him that he is under a slight misconception in thinking that Section 12 relates to the decision of the Supreme Court on the 1954 Act. As I indicated to him in my interruption, the 1954 Act was found to be unconstitutional, broadly speaking because the Disciplinary Committee of the Law Society were given a power which the Supreme Court held to be a judicial function. The proposals in Section 12 and in the Bill generally are to the effect that the judicial function of striking the names of solicitors off the roll, etc., is to vest in the High Court, and not in a non-judicial body.

Furthermore, whatever be the Senator's enthusiasm for constitutional law I should like to point out to him that the constitution specifically provides in so many words that there shall be an appeal to the Supreme Court in all cases, except where otherwise provided by law, that is, of course, excepting constitutional matters where there must always be an appeal. All we are doing in Section 12 is providing that the decision of the High Court will be final, except on a specified question of law. I suggest we could, if we so desired, have no appeal at all, even on question of law. I and my advisers have no doubt but that [31] Section 12 and the provisions of the Bill generally are within the Constitution.

Senator Quinlan asked me if the Law Society were satisfied with the provisions of Section 31. I am not sure exactly what the Senator had in mind. His point escaped me, but I can assure him that on Section 31, as on all other sections of this Bill, the Law Society are quite satisfied.

Mr. P. Crowley: Information on Patrick Crowley  Zoom on Patrick Crowley  Including Section 12?

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Yes. We have had long discussions with them and the Bill is an agreed Bill. At this juncture, I should like to pay a very sincere tribute to the Council of the Law Society for the manner in which they approached the Bill, for their efforts to procure the best possible measure and for the wholehearted co-operation they gave me all along the line.

Senator O'Reilly mentioned that it should be the job of the Government to look after the interests of the general public. I agree that that is an obligation of government and of all of us here, but I do not see any conflict between the interests of the general public and the interests of the solicitors' profession. It is desirable for the community as a whole to have a solicitors' profession that will be respected and trusted.

I do not think there were any other points raised which call for comment from me. We shall have an opportunity of going through the Bill in more detail on Committee Stage.

Dr. Sheehy Skeffington: Information on Owen Lancelot Sheehy Skeffington  Zoom on Owen Lancelot Sheehy Skeffington  I do not know if I shall be in order in asking for further clarification of one or two points as I do not know whether the Parliamentary Secretary was concluding.

An Leas-Chathaoirleach:  No; He was concluding. This is the Second Reading.

Dr. Sheehy Skeffington: Information on Owen Lancelot Sheehy Skeffington  Zoom on Owen Lancelot Sheehy Skeffington  Sometimes a Minister or a Parliamentary Secretary intervenes on the Second Reading.

[32]An Leas-Chathaoirleach:  He was not intervening; he was concluding.

Dr. Sheehy Skeffington: Information on Owen Lancelot Sheehy Skeffington  Zoom on Owen Lancelot Sheehy Skeffington  Then I shall raise the point on Committee Stage.

Question put and agreed to.

Committee Stage ordered for Wednesday, November 16th, 1960.


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