SOLICITORS (AMENDMENT) BILL [H.L.] (Hansard, 28 March 1972)

§ LORD TANGLEY
My Lords, I beg to move that this Report be now received.

§ THE LORD CHANCELLOR
My Lords, I understand that the noble Lord is now preparing to move the Third Reading of this Bill.

§ LORD TANGLEY
My Lords, I was waiting in case the noble Lord, Lord Stow Hill, had something to say. I beg to move that this Bill be now read a third time.

§ LORD TANGLEY
My Lords, I beg to move that the Bill do now pass,

§ LORD GARDINER
My Lords, before we decide (if we decide) to pass this Bill and send it to another place, may I revert to a point which I raised at an earlier stage of the Bill in order to give the noble Lord, Lord Tangley, an opportunity of telling us what further consideration the Law Society has been able to give to it? I refer to the question whether the Compensation Fund for the Law Society ought not to be an indemnity fund. I venture to raise it to-day for two reasons: first, because when, at an earlier stage, I took on purpose the case of a client of mine, Mr. Hinds, whose solicitor embezzled the £1,500 for Mr. Hinds's appeal, I obtained no reply from the noble Lord, Lord Tangley, as to what the position was in that case. As I understand it, there has never been any dispute that the solicitor embezzled the £1,500, and the non-payment of any sum to Mr. Hinds suggests that the Law Society are operating a principle that if the man whose money a solicitor has embezzled has committed a criminal offence then the Law Society do not pay. If that is so, it does not seem to me to be right. I think we ought to know whether it is so or not. Secondly, in many cases where clients have complained that they have been defrauded by their solicitor and can get no payment from the Compensation Fund they are told, "You must prosecute the solicitor first, or you must bring a civil action against him." In the case of one coloured woman a solicitor was prosecuted and convicted, but she was still told that she must bring a civil action, which of course she could not do. As Mr. Hinds's solicitor shot himself, it cannot have been a case where he could have been told that he ought to prosecute him or to take civil proceedings.
951 I should like to direct the attention of the noble and learned Lord, Lord Tangley, to a leading article in the New Law Journal this week which says that the matter I have raised is one of considerable public importance. It then goes on: They"— and they are the clients who complained that they have been defrauded and cannot get any compensation from the Compensation Fund— may of course be mistaken on the issue of fraud, but one of the most objectionable features of the fund as at present administered is that where compensation is refused the Law Society decline to give any reason for the refusal. It continues: In reply, Lord Tangley said that he had described the fund as having in fact worked as an indemnity fund, in the sense that no admitted claim had been rejected'. The editor then says That, however, begs the question on which Lord Gardiner was asking to be informed, for no one would of course expect the Law Society to meet a claim they did not admit, but the Law Society's refusal to give reasons for not admitting a claim leaves unanswered the question whether, in a particular case, a rejected claim was rightly rejected. With its present discretion, the Law Society does not, Lord Tangley explained have to insist on absolutely strict proof ', and this may work to the advantage of a claimant as well as to his disadvantage. If Lord Gardiner's point was met, this discretionary element would be lost. It was however said some centuries ago in R. v. Woolcott that discretionary is only a softer word for arbitrary, and ever since it has been said on occasions beyond number that the arbitrary and capricious administration of justice is a potent source of injustice and certainly a source of seeming injustice. Therefore we would suggest that there is a highly desirable via media between the positions Lord Gardiner and Lord Tangley represented in last week's debate, and it is this—that the discretionary basis of the Law Society's powers should remain, but only if full reasons are given for its decisions in all cases. If a decision to award or not to award compensation, though possibly involving some ex gratia element, is in fact sound, there can be no objection to stating the reasons on which it is based. I would remind the noble Lord that the noble and learned Lord, Lord Denning, in addressing the Law Society at Bristol, said: 952 But I say to all who are called upon to hear and determine, 'Always give your reasons.'A decision given without reasons is as bad as a decision given for no reason'. Being unreasonable it will be regarded by the loser as unreasonable. My Lords, it is because on reflection it appears to me that either or both of these points will be dealt with by an Amendment in another place that I am sure it will be helpful to all those who are concerned with the problem to know whether either or both the alternatives would be suitable to the Law Society.

§ LORD TANGLEY
My Lords, the noble and learned Lord, Lord Gardiner, raised this question on the Committee stage, and I thought that I then gave an undertaking that the Law Society would consider the matter. The Law Society is considering the matter but it has not concluded its consideration, and therefore I cannot give any undertaking as to what may take place in another place. Of course, what the noble and learned Lord has said will carry great weight, but there are quite serious difficulties, some of which I indicated in the course of the Committee stage and some of which are tied up with the client's privilege. If the Law Society were bound to give reasons, it might be that the reasons would infringe upon the client's privilege and be made public in a totally unauthorised and improper way. All these matters are being considered and will be considered, but I cannot give any undertaking as to what stage they have reached or will reach. I can undoubtedly give one absolute assurance: that the mere per se fact that a man is a criminal is not a bar to his receiving compensation.

§ LORD STOW HILL
My Lords, may I take this opportunity of saying just one word? During the Committee stage of this Bill I ventured to raise one or two questions, and I only desire to thank the noble and learned Lord, the Lord Chancellor, who has written to me fully on the matter and obviously given it very careful consideration. I am deeply grateful to him.