The Gazette 1977

JANUARY/FEBRUARY IV77

GAZT I I H

the Solicitor from the case, leaving the Solicitor liable on foot of a previous Undertaking given on the client's behalf. Broadly speaking, Solicitors' Undertakings fall into three categories :- First: Those they give to other Solicitors in the course of everyday practice — mostly in conveyancing transactions; Second: Those they give to persons or bodies other than other Solicitors — mostly Banks or other providers of Finance; Third: Those they give in their capacity as Officers of the Court — that is, in general terms, those they give to the Court — and mostly relating to litigation. The same basic considerations apply to all three and it should possibly be borne in mind that, in the case of Undertakings given as Officers of the Court, a Solicitor is actually liable to commital for breach of such an Undertaking. A Solicitor failing to enter an appearance in an action, in pursuance of a written Undertaking — a very common situation — is liable to attachment. Fortunately, the situation is seldom reached wherein such drastic measures are necessary or resorted to, but it is worth remembering that such remedies exist. As between Solicitors themselves, usually in conveyancing transactions, it is accepted — and probably rightly so — that without such Undertakings and without the mutual trust that makes such Undertakings possible, a great many wheels would very rapidly cease to turn and considerable hardship would result to a great many unsuspecting and innocent clients. However, most Solicitors have their Blacklists, and some have been forced into the extreme position of refusing to accept any Undertakings whatsoever. Most Solicitors content themselves with being selective as to whose Undertakings they will accept. The Conveyancing Sub-Committee of the Dublin Solicitors' Bar Association was interested to discover recently that one of the country's leading Banking Groups keeps all Solicitors' Undertakings it receives under the personal eye of the Law Agent himself, who is believed to have remarked that he has a whole filing cabinet drawer full of what can only be called, at best, 'dubious' undertakings, and who has told us that the Law Society is now backing up the Bank to ensure that all Solicitors' Undertakings arc performed. This is absolutely as it should be, but no doubt a good many red faces will result. The practical points to be made concerning Undertakings are very few and the writer considers that they can be reduccd to the following, applied in a general fashion to all situations:- First:- Always ensure, before giving it, that the client's clear authority to give the Undertaking has been obtained. And it should be noted that a Solicitor cannot hide behind an Undertaking expressed to be given 'on behalf o f . . . ' the client. It has been judicially decided that, such an Undertaking still binds the Solicitor personally. Second:- Always ensure, before giving the Undertaking, that the client's written Undertaking has been obtained not to discharge the Solicitor's retainer in connection with the matter in which the Undertaking is given. Third:- Always ensure, before giving the Undertaking, either (a) that the Title documents or whatever may be

DUBLIN SOLICITORS' BAR ASSOCIATION

As already reported in The Gazette, at the first half- yearly meeting of the Association, held on the 5th April 1976, Mr. Charles Meredith read a paper on the subject of Solicitors' Undertakings which the meeting recommended should be offered to The Gazette for publication. The text of the Paper, slightly amended for visual rather than verbal presentation, is set out below. There is a further warning which may be passed on to the profession as a whole, beyond that inherent in the contents of the Paper; in direct consequence of his industry in the preparation of his address, the writer was co-opted to the Incorporated Law Society's Sub- Committee on the whole question of Undertakings. Let those who presume to air their views beware! UNDERTAKINGS NOT TO BE UNDERTAKEN LIGHTLY You may not know the story - the, sadly, true story - of The Three Solicitors. Unlike the Three Bears, who were, one is led to believe, a family, or at least a related group of Bears, the Three Solicitors had nothing in common except their professional qualifications and, possibly, the desire to secure a prospective piece of lucrative conveyancing business. The Three Solicitors gave three separate undertakings to hold title documents in trust for three separate banks, in three separate financing arrangements — the only small snag being that the three separate solicitors all turned out to be acting for the one client and there was only one property the subject of the title documents referred to. Fortunately for one of the three solicitors, the lucky one did indeed hold the Title Deeds, but the other two found themselves in positions of considerable discomfort, especially as the client left the jurisdiction, with the borrowed money in his pocket! The story of the Three Solicitors is a salutory story - and one which serves as a timely reminder of the risks Solicitors run in giving Undertakings on their clients' behalf without considering extremely carefully just what they are doing. The writer was recently involved in advising upon the strength of a collection of paper writings held out by an independent Merchant Bank to represent security for advances amounting to approximately £1,000,000. These turned out to be a motley collection of unperformed Solicitors' Undertakings dating from the property boom of 1973, given in every conceivable circumstance of property utilisation. Guarantees by the directors of private development companies and other miscellaneous security documents - but mostly, regrettably, Solicitors' Undertakings. In at least one case, it appeared that the Solicitor concerned had returned the title documents to his own client, leaving himself open to the Bank on an Undertaking securing an advance in excess of £50.000. All this is a somewhat lengthy way of pointing out the very obvious fact that Solicitors should never give undertakings without very careful consideration; without being absolutely certain that they can perform that Undertaking; without ensuring continuously thai they remain able to perform that Undertaking; and without ensuring that their client is not in a position to discharge