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. A 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 T he 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 G 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 G 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,