The Gazette 1949-1952

the aggregate sum that has been paid to the treasurer

o f the Society of K ing’s Inns by the Commissioners

for Inland Revenue for the period 31st March, 1925,

to 31st March, 1930, out o f stamp duties collected

on indentures of apprentices to solicitors, and if he

is aware o f any function or sendee performed by

the Society o f King’s Inns for the benefit of appren

tices during that period, and whether he intends to

introduce proposals for legislation to amend the

Stamp Act, 1891, so as to provide that the Incor

porated Law Society shall become the recipient

o f £ 14 out of the duty on each indenture.

nswer

An aggregate amount of £20,720 has been paid

over to the treasurer o f the Society o f K ing’s Inns

by the Revenue Commissioners during the period

from the 31st March, 1923, to the 31st March, 1950,

out of the stamp duties paid on Articles of Clerkship

to a Solicitor.

The statutory provision authorising these pay

ments originated in 1790, and, so far as I am aware,

it has never been established that the purpose o f the

payments was to enable the Society to provide

facilities for Solicitors’ Apprentices.

The question o f amending the Stamp Act, 1891,

with regard to the duty payable on Articles of

Clerkship to a solicitor is receiving consideration.

APPROVAL AND CONTRACT

FEES

Certificate under Section 6, Finance Act, 1928

following circular has been sent to the Bar

Associations by direction o f the Council.

“ Dear Sir,

“ I am directed by the Council to draw your

attention to the following resolution which was

published in the issue of the Society’s

azette

for

March, 1947 :—

“ That in the opinion o f the Council no

solicitor should include in any conditions of

sale or contract for sale prepared by him any

condition or clause providing for the payment

by the purchaser to the vendor or his solicitor

o f a fee for the approval of the draft conveyance,

assignment, or transfer, and that the profession

throughout the country be requested to give

effect to the resolution.”

The resolution of the Council applies to all sales

either by public auction or by private treaty.

In an article published in the same issue o f the

azette

the reasons which led the Council to

reach this decision were set out at some length.

It was pointed out that the scale fee charged by

the vendor’s solicitor to his client covers all the

work done in connection with the preparation of

the contract, deducing title, and completing the

sale, and that the solicitor is not entitled to charge

any costs over and above the scale fee. I f the

conditions of sale or contract for sale contain a

stipulation obliging the purchaser to pay an approval

fee, the vendor’s solicitor on receiving it must

either pay it over to his client, or allow it as a credit

in the bill of costs. In so far as the public is con

cerned there seems no particular reason why a

purchaser should be obliged to indemnify the

vendor against any part o f the costs of the sale. The

right to exact an indemnity o f this kind depends

entirely on contract, and the practice of imposing

such a liability on the purchaser is purely arbitrary.

The Council are o f the opinion that any custom

or practice which, imposes on either party to a sale

an obligation to pay all or part of the other party’s

costs is against the interests of the profession. The

custom o f exacting an approval fee is such a practice.

In the shortsighted view a particular solicitor may

find it to his advantage in a particular case to make

the other party liable for his client’s costs, but the

interests o f the profession as a whole do not neces

sarily coincide with the interests of a solicitor in a

particular case, and the same solicitor may have the

experience in other cases of having to apply for

payment of his own costs to a client who is already

liable under the contract for the costs of the other

party’s solicitor. Generally speaking the practice of

making a purchaser indemnify the vendor against

the whole or part of the costs causes purchasers to

employ the vendor’s solicitor, rather than be

separately represented with liability for extra costs.

If this practice became universal the remuneration

o f the profession as a whole from conveyancing

business would be reduced by an amount varying

from 23 per cent, to 50 per cent.

Another consideration which led the Council to

disapprove of the practice o f charging an approval

fee is as follows :—

The vendor’s solicitor is legally bound to pay or

credit it to his client. A practice has grown up

whereby a solicitor collects the approval fee and then

informs the vendor that he will allow him an abate

ment of the costs. The client thinks he has got the

abatement, but in fact it is off-set by the approval

fee which has been collected, by the solicitor. The

Council disapprove o f this practice on ethical

grounds, and on the ground that it countenances

the idea of under-cutting costs.

The same considerations which apply to approval

fees are equally applicable to what has become known

as a contract fee, that is, a provision in a contract

for sale obliging the purchaser to pay a sum for the

preparation of the contract by the vendor’s solicitor,