The Gazette 1989

A pril 1989

GAZETTE

From the President . . .

facilitating the speedy conduct of many types of financial trans- actions and it is important that the banking community continue to have confidence in our profession and that accordingly solicitors at all times honour their undertakings. You should find copies of the new forms of undertakings included with this Gazette and hopefully you will appreciate how useful they should be in the future. •

advised to make appropriate searches before completing the undertaking to ensure that all outstanding liens, mortgages and charges are identified. Undertakings can indeed have serious implications for the Law Society as judgment was given in the Supreme Court recently against the Society in an action by the Trustee Savings Bank claiming against the Compensation Fund on foot of a fraudulent undertaking given by a former solicitor. The Society disputed that the Compensation Fund was liable to the Bank in such circumstances but both the High Court and the Supreme Court held against us. There are serious implications for the Compensation Fund as this action was by way of a test case so that the total claims arising from this against the Fund will amount to approximately £0.25m. Most of this sum is already reserved in the accounts of the Compensation Fund. The Guide to Professional Con- duct of Solicitors in Ireland has a special section dealing w i t h undertakings where it states that an undertaking of a solicitor is binding in law and the failure of a solicitor to honour an undertaking is unprofessional conduct. A solicitor is responsible for carrying out an undertaking given by any member of his staff and all undertakings should be signed by a principal or partner. Undertakings should not be given lightly and should only be given when it is clearly necessary to do so in the interests of the client and shall be deemed to be the personal under- taking of the solicitor unless the contrary be proved. If a solicitor does not intend to accept personal responsibility this should be clearly expressed in the undertaking. Before giving an undertaking involving any substantial sum there should be an irrevocable instruction in writing from the client and an irrevocable written retainer continuing in force until the undertaking is carried out and an undertaking should neither be given or sought with which it is not possible for a solicitor to comply in all respects. Solicitors' undertakings have always played an important part in

James Nash f.s.s. di p .

Recently the Law Society hosted a Reception to launch four forms of undertaking that have been agreed between the Law Society and the Irish Bankers Federation which are:- (a) Undertaking where title docu- ments are lent to a solicitor for the purposes of inspection only and return; (b) Undertaking where title docu- ments are furnished to a solicitor for the purposes of sale or mortgage of property (or part of it) and to account to bank for net proceeds; (c) Undertaking to deliver title documents to bank on comple- tion of purchase; and (d) Undertaking by solicitor for use in connection with bridging finance. These are excellent documents which it has taken very many years to agree finally with the Banks but if they are used in all solicitor/bank situations where undertakings are required, there should be less confusion about undertakings in the future. For example, the under- taking for a sale or mortgage spec- ifies that the undertaking is to account for net proceeds after deduction of prior mortgages, auctioneers' fees and legal costs and outlay, usual apportionment of outgoings and any insurance pre- miums deducted by the mortgagee and the undertaking is to pay either the net proceeds (estimated amount specified) or so much of the net proceeds as will satisfy the obligations of the client. The f o rms also carry an important caution that solicitors are

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