The Gazette 1989

GAZETTE

pril

1989

From the President . . .

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;

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

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

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.

•

James Nash

f.s.s. di

Forensic Document Examiner

•end

Handwriting Consultant

38, Monastery Rise,

Clondalkin, Dublin 22.

Telephone: (01) 571323

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