HL Deb 23 May 1933 vol 87 cc980-4

Order of the Day for the Second Reading read.


My Lords, I beg to move that this Bill be read a second time. The Bill is one which has for its object a purpose of which I am quite sure your Lordships will approve. It is in some measure to safeguard the public, and at the same time to give some possibility or an opportunity to the solicitors themselves to control those who are less careful in the matter of their accounts and in dealing with moneys entrusted to them. In the course of the past few years the solicitors' profession, no less than the public, have been much concerned at some cases in which defalcations have taken place in respect of moneys entrusted to solicitors. When I tell your Lordships that there are some 15,000 solicitors upon the Roll it can hardly be expected that there should not be some cases among them where a breach of trust may be committed. At the same time the solicitors have been very anxious indeed, for the honour of their profession, that they should take all steps that are possible to prevent the occurrence of these unfortunate incidents.

One measure that they propose after considerable deliberation is embodied in this Bill—namely, that solicitors should be bound to keep separate accounts of their clients' moneys and also have a separate account at the bank into which money entrusted to them by their clients should be paid. Cases have come before the Law Society in which it has been found that the initial lapse has arisen from a mistake. A solicitor has thought that his own personal account was in better credit than it was and has overlooked the fact that that account contained moneys which belonged to his clients. It remains as true as in the past when the words were written: How oft the sight of means to do ill deeds, Make deeds ill done! It may well be that a solicitor, not truly observing that the funds at his hank do not belong to him, has by carelessness more than dishonesty taken the original step which has lauded him in his downfall and his client in distress.

After some considerable deliberation over a period of years the system which is now enshrined in the Bill has been brought into being. The Law Society itself and the provincial Law Societies have for some years been engaged in trying to devise a system which might impose upon solicitors the duties of keeping separate banking accounts without imposing too great hardships upon some members of the profession, and over a period from 1930 there have been various schemes afloat. Some of them have been presented in the form of Bills in another place and I am happy to say the Bill to which I ask your Lordships to give a Second Reading is one which has passed through all its stages in another place and comes to your Lordships for final approval.

The scheme of the Bill is simple. Your Lordships will remember that there is a Committee of the Law Society known as the Disciplinary Committee to which is entrusted the duty of investigating charges made against solicitors and suggesting what should be the penalty imposed upon them in case they are found guilty; and their recommendation has ultimately to go before the Courts and to be confirmed. Your Lordships will find that by Clause 1 it is laid down that: The Council of the Law Society shall make rules—

  1. (a) as to the opening and keeping by solicitors of accounts at banks for clients' moneys; and
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  3. (b) as to the keeping by solicitors of accounts containing particulars and information as to moneys received, held or paid by thorn, for or on account of their clients."
Of course that might be merely a pious aspiration, but power is given to the Council to take such action as may be necessary to enable the Council to ascertain whether or not the rules are complied with.

The rules are to be made subject to the approval of the Master of the Rolls, who may be shortly described as the person who is known as the father-in-law of all solicitors. He signs all their admissions; he has power to restore them to the Roll if they have been taken off; he has power to relieve those who aspire to be solicitors from a preliminary examination in proper cases; and he has power to relieve them of the consequence of various defaults such as in the renewal of their certificates and so on. I am happy to say that in the present case the close association between the Master of the Rolls and the Law Society and all solicitors, is of the happiest; and in the ten years during which I have had this work entrusted to me my admiration for solicitors as a whole has increased as the time has gone on. The Master of the Rolls is to approve of these rules, as he does in the case of a number of other rules that are part of the working system of the entrance and renewal of solicitors' certificates. Then the clause provides that there shall be power to the Committee to ascertain and to deal with complaints if complaints should be made that the rules have not been complied with. That is the operative part of the Bill.

Then it was important to deal with certain solicitors who hold what might be called official positions. There is a saving in Clause 4 for solicitors who are employed as public officers such as those in the office of the Ecclesiastical Commissioners, Queen Anne's Bounty, the Forestry Fund, the Development Fund and so on. These are specified in the Bill and the clause has been agreed with the proper authorities. Clauses 5 and 6 have been agreed with the Ministry of Health and provide for proper exception in the case of certain county officers. Clause 6 also gives the interpretation of certain expressions. Clause 8 is a clause which has been a little troublesome, but it has been finally agreed with the Bankers' Association.

That is the purpose of the Bill. I think it contains quite a sufficient number of safeguards to cover those cases which ought not to be brought within it. At the same time it imposes upon solicitors a standard to which they ought to act up and which I may say does prevail among the leaders of the profession and most others. Here is an effort to impose that standard upon all with certain limited safeguards. I hope that as the Bill has been found to be satisfactory-after close examination in another place, your Lordships will also find it worthy not only of a Second Reading, but also of being passed into law. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Hanworth.)


My Lords, I have one or two suggestions to make to my noble and learned friend in charge of the Bill, so that if he thinks fit he can move Amendments in Committee. If your Lordships look at Clause 2 you will see that: If a solicitor fails to comply with any of the rules made under the preceding section, any person may make a complaint in respect of that failure to the Disciplinary Committee. Surely "any person" is a very wide term because, under Clause 1 (b), the Council of the Law Society shall make rules as to the keeping by solicitors of accounts containing particulars and information as to moneys received, held or paid by them, for or on account of their clients. If you give a sort of roving commission to people to enquire whether these provisions are adhered to by various solicitors you may get people going to find out all this information who then may use it in some improper manner. If you have such a wide clause surely there should be some penalty provision, as in the case of the Coal Mines Act and, I think, the Land Drainage Act, for dealing with people who, in their official capacity, obtain information which they proceed to give away to others.

Then if your Lordships will turn to page 4, line 20, you find these words: Provided that nothing in this subsection shall deprive a bank of any right existing at the time when the first rules made under this Act come into operation. I should have thought that there ought to be some time limit. If the banks do not exercise their rights within a certain time I think they ought to be precluded, because the banks are very rich and can much more easily afford to sustain a loss than ordinary members of the public. I put these matters before my noble and learned friend for his consideration, or for him to move Amendments if he thinks fit in Committee.

On Question, Bill read 2a, and committed to a Committee of the Whole House.