The Gazette 1991

g a z e t t e

april

1991

come from sole practitioners ac-

counting for a total of £3.9 million

in that period. Late submission to

the Society of accountants' cer-

tificates is undoubtedly one of the

early warning signs and the Socie-

ty has now embarked on a policy

which will see Practising Cer-

tificates withheld where solicitors

offend against this requirement. It

is also the policy of the Society to

issue i n j unc t i on proceedings

against solicitors who continue to

practise without a Practising Cer-

tificate. Recently, staff at Blackhall

Place has been augmented to

enable effect to be given to this

policy. Other measures are also be-

ing considered and the matter will,

it is hoped, be one of the issues

that the forthcoming Solicitors Bill

will address.

It is in nobody's interest that the

protection which the ordinary

member of the public enjoys at pre-

sent should be lessened in any way;

that is not the Society's objective.

That could happen, however, if the

Fund were not in a position to meet

the demands placed upon it.

It might also, ,of course, happen

if the courts were to hold that the

Fund, in its present form, is not in

accordance wi th constitutional

norms of justice and the Govern-

ment would do well to bear that in

mind. A challange has already been

threatened.

The Society intends to continue

to press its case for reasonable

change while, at the same time,

monitoring the profession with the

utmost diligence to try to lessen

the burden on the honest practi-

tioner.

Noel C. Ryan,

Director General

* Trustee

Savings

Bank

-v-

Incorporated

Law Sociaty

Inland [1989] I.R. 234

This case concerned specifically s.21

(4) of the Solicitors (Amendment)

Act, 1960, relating to the Compen-

sation Fund, which subsection

provides as follows:-

"Whe re it is proved to the

satisfaction of the Society that any

person

has sustained loss in conse-

quence of dishonesty on the part of

any solicitor or any clerk or servant

of a solicitor in connection with that

solicitor's practice as a solicitor or in

connection with any trust of which

the solicitor is a trustee, then, subject

to the provisions of this section, the

Society shall make a grant to that

person out of the Fund and the

amount of the grant shall be such as

represents in the opinion of the

Societyfull indemnity for that loss".

By comparison s.23, (2) of the

1960 Act, which provides for the

making by solicitors who practice in

both parts of Ireland of a combined

annual contribution to the Com-

pensation Funds of the Incorporated

Law Society of Ireland and the Incor-

porated Law Society of Northern

Ireland, refers to a scheme operated

by the Northern Ireland Society

requiring contributions to a fund "for

the compensation or indemnification

clients

for or against losses due to

defalcations of such practitioners or

their clerks or servants . . . "

M., a partner in a firm of solicitors,

applied to the plaintiff for a loan

which was expressed to be for the

purpose of purchasing a house. The

plaintiff agreed to make the loan on

condition that it received certain

undertakings from the applicant's

firm. A letter, which contained the

required undertakings and which

purported to be signed by another

partner on behalf of the firm, was

forged by M., and presented to the

plaintiff, and monies were advanced

by the plaintiff to the firm's account.

When called upon to do so, both M.

and his firm failed to repay the loan.

The plaintiff applied to the defendant

for compensation in respect of its

loss from the fund maintained by the

defendant. The defendant refused to

pay compensation on the grounds

that the plaintiff had not been a client

of the solicitor. The plaintiff success-

fully applied to the High Court for a

declaration that it was entitled to be

paid compensation by the defendant

out of the fund, and for an order that

such payment be made. (See [1987]

I.R. 430 for High Court decision of

Johnson J. delivered 30/7/87).

On the defendant's appeal against

the judgment and order of the High

Court, it was

Held

by the Supreme

Court (Finaly CJ, Griffin and

McCarthy JJ concurring) in dis-

missing the appeal,

1. that the fact that s.21, sub-s.4

made specific provision for cases

where a person sustained loss in

consequence of dishonesty on the

part of a solicitor "in connection with

any trust of which that solicitor is a

trustee" did not mean that the phrase

"any person" in the sub-section

should otherwise be interpreted as

including only those who had been

clients of solicitors; the special

provision had been added in

recognition of the fact that solicitors

were often chosen to act as trustees

but, in carrying out such duties, were

not necessarily acting in connection

with their practices as solicitors.

2. That the description given in

s.23, sub-s.4 to the scheme operated

by the Northern Ireland Law Society,

which was expressed to be for the

compensation of " c l i e n t s" of

solicitors, had no relevance to the

interpretation to be given to s.21, sub-

s.4 of the Act.

3. That, interpreting s.21, sub-s.4

according to its plain and unam-

biguous meaning, the plaintiff was

rightly held to be a person which had

sustained loss in consequence of

dishonesty on the part of a solicitor,

within the meaning of the sub-

section.

4. That in providing the plaintiff

with a forged letter purporting to

contain undertakings and to be

issued on behalf of the firm of which

he was a partner, M. was guilty of

dishonesty in connection with his

practice as a solicitor.

•

James Nash

F.S.S. DÍ

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