The Gazette 1992

MARCH1992

GAZETTE

Copies of the complaint form may be obtained from the Bar Council Office, P.O. Box 2424, Law Library, Four Courts, Dublin 7. Lawbrief is grateful to Mr. John Dowling, Director of the Bar Council for information relating to the Barristers' Professional Conduct Tribunal.

payees on the company's payment orders. The defendants set up companies, received the payments and passed them on, acted as directors of the companies and authorised payment of the assets on to a subsequent nominee of Mr. Zdiri. Finally they put the dummy companies into liquidation. The defendants did not act directly on behalf of the chief accountant, and they do not appear to have known of his existence or the precise nature of the fraud; rather they took instructions from a French lawyer who was acting as an intermediary. accountants in respect of a payment of half a million dollars which had been received and then passed on to a dummy company called "Baker Oil Services Ltd". The defendants were the only party involved with sufficient funds to satisfy a judgment in the plaintiff's favour. Millet J held that the defendants were not liable at common law for money had and received, and neither were they liable in equity for "knowing receipt and dealing," but that they were liable as constructive trustees for knowing assistance in a breach of trust (i.e. the fiduciary relationship between the plaintiff company and its chief accountant). The Court of Appeal unanimously upheld this decision. Fox LJ gave the only full judgment, with which Butler-Sloss and Beldam LJJ agreed. For further discussion on this issue, see the article by Steven Fennell, "Professional Liability" in Professional Negligence, September 1991, 151-156. Lawbrief is grateful to Mr. David R. Pigot, solicitor, a former President of the Society and a director of the Solicitors' Mutual Defence Fund Limited for drawing this issue to our attention. When Ag ip finally discovered the fraud it sued the defendant

Solicitors Arranging Investments through Advisers or Brokers

Maurice R. Curran, Chairman of the Solicitors' Mutual Defence Fund Ltd., has written to members pointing out that solicitors may be at risk in certain circumstances where they assist clients in arranging investments through certain advisers or brokers. With a view to improving the risk management among members, the Solicitors' Mutual Defence Fund Limited suggests the following precautions which should be taken by solicitors: 1. It is highly inadvisable to recommend any particular broker or agent to a client unless the solicitor has the most up-to-date and firm information as to the solvency and reliability of the agent in question. If a solicitor recommends a particular agent to a client, it is important to advise the client to take all necessary measures to satisfy himself as to the standing of the agent and to check with the appropriate association with regard to his registration with the association and his bonding. 2. If a solicitor is instructed to invest monies directly, always make sure that the cheque, marked " A /C Payee only", is payable to the primary institution or insurance company directly and not to the broker. This, of course, does not apply to direct investment in shares in public companies quoted on the Stock Exchange where they can only be bought through a stockbroker.

Maurice Curran

if the solicitor has made the cheque payable directly to the primary institution or insurance company, a solicitor should make sure that the investment is followed up and that the client receives his certificate of deposit, stock certificate, insurance policy or whatever.

Liability For a Client's Fraud

The decision of the Court of Appeal in Agip (Africa) Ltd. -v- Jackson [1991] 3 W L R 116 suggests that a professional adviser, such as a solicitor or banker, who assists in a client's financial transactions and who later discovers that the assets involved had been acquired by fraud, may be liable as a constructive trustee of the money for "knowing assistance". Steven Fennell in an article "Professional Liability" in Professional Negligence, September 1991, 151-156, states that, in appropriate cases, the adviser may have to take steps to verify his client's account of the purpose of the transaction or even reveal information acquired from the client to an injured third party. In Agip (Africa) Ltd. -v- Jackson, the plaintiff company was engaged in oil exploration in North Africa. Over a period of years its chief accountant, a Mr. Zdiri, had been defrauding it of substantial sums of money by substituting the names of companies in the United Kingdom for the name of the rightful

Corpus Juris Humorous

Readers may be interested in light reading and may well be planning their summer reading! Lawbrief

3. If an investment has been made through a solicitor's office and even

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