The Gazette 1977

GAZETTE

MAY-JUNE

of our undertaking but also that we should never be seen to fail. If the day should come where because of a bad track record in the performance of undertakings, the facility of which I have spoken should be in any way curtailed, we could not give our clients the service which they expect, and then the standing of the profession would be seriously undermined. Therefore: 1. Never give an undertaking unless you have your client's irrevocable authority to do so, and get this at the start of the case. 2. Never give an undertaking unless you know that you can perform it. 3. Never give an undertaking to pay a specific sum out of the proceeds of sale. At the end of the day there may be no proceeds. Always undertake to pay the net proceeds of sale. 4. Never undertake to do anything for anyone who is not within this jurisdiction. 5. As a member of a firm, or as an assistant solicitor, never give an undertaking unless in accordance with the strict practice of the firm, and if you are an assistant, unless with a partner's full authority. 6. Never undertake to pay a Government tax without being absolutely sure how much is involved. For example, an undertaking to pay Wealth Tax might appear to be limited to some thousands of pounds on a particular property. Remember, however, all the taxpayer's liability under this heading is a charge on each piece of his immovable property which is being sold. The reason why I say the undertaking should be irrevocable is that unless it is so, if the client should withdraw a retainer you could be in very serious trouble. Remember, in most cases the property being sold is subject to a mortgage, and that if you do get deeds up from the loan society you do so upon accountable receipt, and these deeds must be returned to the loan society at their request. It the client changes his solicitor, you will have no lien on deeds which you have obtained from a lending institution. The reason I say that an undertaking should always be in respect of net proceeds of sale is that until the actual day of closing you do not know what the net proceeds will be. It is not sufficient to know that a vendor has sold a property for 'X' pounds and that he owes his building society 'Y' pounds, and that auctioneers' and solicitors' fees and outlays will come to 'Z' pounds. On the day of closing there may be 'A', 'B' and 'C' Judgment Mortgages, which have come in since the contract has been signed, which could well create a shortfall, leaving you personally liable if you have undertaken to pay to your clients's bankers 'D' pounds and you find yourself now with 'D' minus £2,000.00. Wills: It is not necessary for me to attempt to go into the intricacies of drawing up a Will. Hopefully you have learnt this elsewhere. However, it is important to emphasise that there should be no delay in attending a person, particularly if they are in hospital or ill, to make their Will. If you have any doubt about their testamentary capacity do not make the Will unless you are assured by their visiting doctor, or a doctor in the hospital, that in his opinion the testator is lucid. Even then, in the first 91

experience to date. The policy that will be issued will guarentee continuity of insurance for three years. Professional indemnity, like all other insurance, is a contract of "uberrimae fidei", which means that not alone must there be full disclosure in the initial application form but upon renewal every year you must disclose to the insurance company not alone claims that have been notified to you but also claims, although not notified, which may arise because of professional negligence. An obvious example would be failure to issue a writ within time. Although no claim may have been notified against you, you are obliged to inform the company that a claim may arise once you are aware of what has happened. In a large office, at the time of renewal, a printed questionnaire should be sent round to all qualified and unqualified personnel dealing with clients' work, asking them the relevant questions, and once the form has been signed by each individual it should be returned to the partner in charge. If you take over a practice, or amalgamate with another practice, it is very important that you ensure that in both cases run-off insurance is continued for six years from the date of the take-over or amalgamation. The premium for this is substantially less than in the case of the normal professional indemnity policy. Solicitors' Accounts Regulations: Your obligations under this heading will have been fully covered in the lectures which you have received. However, it is important to emphasise that the lack of book-keeping in solicitors' offices in the past has been the rock upon which many of our colleagues have perished. It is penny wise and pound foolish not to have a proper system of book-keeping in your office. It pays for itself, and it is worthwhile before even installing a simple system to take the professional advice of an accountant. If your books are written up to date, if you carry out a regular bank monthly reconciliation statement, and take out at least quarterly accounts, your accountancy fee will be much less than the fee that will be charged where the accountant has to pay an articled clerk for three weeks to do the preliminary work to try and bring the accounts into some sort of shape, to enable him to issue the Accountants' Certificate. To be in breach of the Solicitors' Accounts Regulations is a disciplinary matter. Every practising solicitor has six months from the end of his financial year in which to file his Accountants' Certificate. For reasonable cause some extension has been allowed over and above this time in the past. The Society is, however, entitled to refuse a solicitor his practising certificate if his accountants' certificate is not up-to-date, and refusal of a practising certificate means that a solicitor can face prosecution for acting as a solicitor without such certificate. Undertakings: These are the profession's shop window. Without the solicitor's undertaking commercial life would become extremely difficult, and delays would be enormous. Our profession has been given the recognition and trust by the financial institutions, Building Societies, Courts, Government Departments and other bodies, which enables us, by issuing an undertaking, to obtain valuable concessions for our clients, without which it would be impossible for us to operate efficiently. Therefore, it is vital that not alone should we ever fail to perform on foot