PART III

Control of Solicitor's Property and Compensation to Clients in Certain Cases

19. —(1) Where the Society are of opinion that a solicitor or a clerk or servant of a solicitor has been guilty of dishonesty in connection with that solicitor's practice as a solicitor or in connection with any trust of which that solicitor is a trustee, they may by notice require the production or delivery to any person appointed by the Society and may take possession of all or any documents in the possession or control of such solicitor or his firm or relating to any trust of which such solicitor is the sole trustee or of which the trustees are such solicitor with a partner, clerk or servant of his or with more than one of such persons.

(2) Where a person, having possession or control of documents which he has been required under this section to produce or deliver, refuses or fails to produce or deliver them in accordance with the requirement—

(a) he shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding fifty pounds, and

(b) the Society may apply to the High Court and that Court may by order require such person to produce or deliver the documents.

(3) Where the Society take possession of documents produced or delivered under a requirement under this section—

(a) they shall serve, on the solicitor and on every other person from whom the documents were received, a notice giving particulars of the documents and the date of taking possession thereof, and

(b) if any of the documents are grouped together as relating to a particular matter, the notice may give particulars of those documents by referring to the group and the matter to which it relates.

(4) Within fourteen days after service of a notice under subsection (3) of this section on a solicitor or other person, he may apply to the High Court for an order directing the Society to return the documents received by the Society to the person or persons from whom they were received or to such other person or persons as the applicant may require and the High Court may make the order applied for or such other order as the Court thinks fit.

(5) (a) Where an application is not made in accordance with subsection (4) of this section or the High Court on such application directs that the documents shall remain in the custody or control of the Society, the Society may make inquiries to ascertain the person or persons to whom the documents belong and may deal with the documents in accordance with the directions of such person or persons.

(b) For the purposes of paragraph (a) of this subsection, the provisions set out in the Second Schedule to this Act shall have effect.

20. —(1) Where the Society are of opinion that a solicitor or a clerk or servant of a solicitor has been guilty of dishonesty in connection with that solicitor's practice as a solicitor or in connection with any trust of which that solicitor is a trustee, they may apply to the High Court, and the High Court may make an order directing either—

(a) that no banking company shall, without leave of the High Court, make any payment out of a banking account in the name of the solicitor or his firm, or

(b) that a specified banking company shall not, without leave of the High Court, make any payment out of a banking account kept by such company in the name of the solicitor or his firm.

(2) The High Court shall have power to hear in camera an application for an order under subsection (1) of this section.

(3) Where the High Court make in relation to a solicitor an order under subsection (1) of this section, the High Court may at the same time order that his practising certificate be suspended until the certificate expires.

(4) If any person acts as agent or nominee of a solicitor or his firm so as to render nugatory an order made by the High Court under subsection (1) of this section, such person shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding one hundred pounds.

21. —(1) In this section—

“the Fund” means the Compensation Fund;

“grant” means a grant under subsection (4) of this section.

(2) The Society shall continue to maintain the Fund.

(3) The Fund shall be maintained and administered in accordance with the provisions of the Third Schedule to this Act.

(4) Where it is proved to the satisfaction of the Society that any person has sustained loss in consequence 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 that 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 Society full indemnity for that loss.

(5) The Society shall have a discretion to make or refuse to make a grant—

(a) in a case in which the solicitor did not have a practising certificate in force at the time when, in the opinion of the Society, the loss arose,

(b) in a case in which the Society are of opinion that there has been negligence on the part of the claimant or of any person for whom he is responsible which has contributed to the loss in question, and

(c) in a case in which the Society are of opinion that the claimant has by his conduct actively assisted in the commission of misconduct by the solicitor,

and, where the Society decide to make a grant in any such case, they shall have a discretion to make it only to a limited extent.

(6) A grant may be made notwithstanding that the solicitor has, after the act of dishonesty, died, had his name removed from or struck off the roll, ceased to practise, been suspended from practice, or had his practising certificate suspended.

(7) No grant may be made in respect of a loss made good otherwise.

(8) (a) On the making of any grant to any person (in this subsection referred to as the grantee) in respect of any loss—

(i) the Society shall, to the amount of the grant, be subrogated—

(I) to any rights or remedies to which the grantee was entitled on account of the loss against the solicitor or any other person or against the estate of such solicitor or other person,

(II) to any rights or remedies to which the solicitor or his clerk or servant was entitled on account of the loss against any other person or against the estate of such other person,

(III) to all other rights and remedies (if any) of the grantee or such solicitor, clerk or servant in respect of the loss,

(ii) the grantee or his representative shall have no right under bankruptcy or other legal proceedings or otherwise to receive any sum out of the assets of the solicitor, clerk or servant in respect of the loss until the Society has been reimbursed the full amount of the grant.

(b) In paragraph (a) of this subsection, references to the grantee or the solicitor, clerk or servant include, in the event of his death, insolvency or other disability, references to his personal representative or any other person having authority to administer his estate.

(9) No grant shall be made unless notice of the loss is received by the Society—

(a) in the prescribed manner, and

(b) within the prescribed period after the loss comes to the knowledge of the loser.

(10) The Society, for the purposes of inquiry into any matters which may affect the making or refusal of a grant, may take evidence on oath, and the administration of such oath is hereby authorised.

(11) (a) A grant may, at the discretion of the Society, be paid either in one sum or in such instalments as the Society may determine.

(b) The Society, if they are of opinion that the financial stability of the Fund so requires, may postpone payment of any grant payable in one sum or payment of any instalment of a grant.

22. —(1) In this section “the Fund” means the Compensation Fund.

(2) Before a practising certificate is issued to a solicitor in respect of the practice year ending on the 5th day of January, 1962, or any subsequent practice year, he shall pay to the Society such annual contribution to the Fund as may be appropriate in accordance with the subsequent subsections of this section and the registrar may withhold the issue of the certificate until the payment is made.

(3) Subject to subsection (4) of this section, the annual contribution to the Fund payable by a solicitor under subsection (2) of this section shall be—

(a) in case the practising certificate in respect of which it is paid is issued to him within the period of three years beginning on the day of his admission—five pounds, and

(b) in any other case—twenty pounds.

(4) (a) At any time in any practice year, being—

(i) the practice year next following that at the end of which, for the first time, the total amount standing to the credit of the Fund (including the value of all investments forming part of the Fund but after deducting all outstanding liabilities) is more than £25,000, or

(ii) any subsequent practice year,

the Society may, if they think fit, determine that every solicitor taking out a practising certificate in respect of the next following practice year (not being a certificate issued to him within the period of three years beginning on the day of his admission) shall pay to the Society, as the annual contribution payable under subsection (2) of this section in the case of that year, such amount greater or less than twenty pounds as the Society may fix.

(b) In exercising the powers conferred by the foregoing paragraph, the Society shall have regard to the principle of maintaining the total amount standing to the credit of the Fund (including the value of all investments forming part of the Fund but after deducting all outstanding liabilities) at £25,000.

23. —(1) In this section—

“the corresponding society” means the Incorporated Law Society of Northern Ireland,

“corresponding certificate” means a certificate issued by the corresponding society and corresponding to a practising certificate,

“corresponding practitioners” means persons holding corresponding certificates.

(2) Where a scheme operated by the corresponding society requires corresponding practitioners controlled by that society to contribute to any fund or insurance policy, or to take out any insurance policy, for the compensation or indemnification of clients for or against losses due to defalcations of such practitioners or their clerks or servants, the Society may make arrangements and agreements with the corresponding society in regard to persons who are entitled both to take out practising certificates and to take out corresponding certificates, and any such arrangement or agreement may provide—

(a) for the payment by each such person of one combined annual contribution and the manner in which the combined contribution is to be applied for the purposes of the Compensation Fund and any fund or insurance policy maintained for the purposes of the said scheme,

(b) for the manner in which claims in respect of defalcations by any such person, or his clerk or servant, shall be treated and the extent, if any, to which those claims shall be paid by the Society and the corresponding society respectively,

(c) for any consequential or incidental matters.

24. —Regulations made with the concurrence of the President of the High Court may—

(a) provide for procedure (other than court procedure) to be followed in giving effect to the provisions of this Part of this Act and the Second and Third Schedules to this Act,

(b) make provisions ancillary or supplemental to the provisions of this Part of this Act and the Second and Third Schedules to this Act,

(c) make provisions giving effect to any arrangement or agreement pursuant to section 23 of this Act or ancillary or supplemental thereto.