Legislative Assembly for the ACT: 1995 Week 10 Hansard (7 December) . . Page.. 2768..
MR HUMPHRIES (continuing):
In 1994 the Legal Practitioners Act was amended to bring moneys owned by a client of a solicitor which the client has given authority to the solicitor to control, that is, "controlled moneys", within the recording and auditing requirements of the Act. The Act requires a solicitor to record the funds of a client over which the solicitor has control. The definition of these "controlled moneys" includes "valuable securities", that is, documents such as title deeds and share scrip. The Law Society submitted that, as there have been no known fraudulent dealings with such documents, the requirement imposes an unduly onerous administrative task on a practitioner.
Further, a solicitor often holds a sealed package for a client which would be likely to contain documents which would come within the meaning of a "valuable security". In such a case, a solicitor could not comply with both the instruction of the client that his or her sealed package be held as is and with the requirement under the Act that the solicitor record all "valuable securities" held for a client. For these reasons, the Law Society asked that the Act be amended to delete the reference to "valuable securities" from the definition of "controlled moneys".
I think the society's concerns are reasonable and the Bill removes the reference to "valuable securities" from the meaning of "controlled moneys". Needless to say, Mr Speaker, this issue would be revisited should there be any suggestion that a defalcation related to documents which come within the meaning of "valuable securities" has occurred. Following consultation with the Law Society of the ACT, it was understood that the scheme relating to "controlled moneys" should include requirements that, when a client gives a solicitor authority to control money of the client, the solicitor should make an acknowledgment to the client of the taking of that authority. Accordingly, the Bill includes such requirements.
Related to the requirement that the solicitor acknowledge and notify a client in respect of the solicitor's control of the client's money is the audit of the solicitor's control of, and dealings with, the money of a client. The Bill provides for a quarterly statement to be prepared and provided to the client in respect of any payments by a solicitor out of the client's funds controlled by the solicitor. This quarterly statement would be a document within the meaning of those which an auditor may require to be produced for audit under section 103 of the Legal Practitioners Act. This means that an auditor may require a solicitor to produce for inspection any acknowledgments and statements prepared by the solicitor in respect of "controlled moneys" during the audit period. These amendments will bring the procedure providing for the accounting by a solicitor for "controlled moneys" more into line with that provided for the regulation of "trust moneys" under the Act and will have the effect of enhancing the protection of a client who engages a solicitor to undertake control of his or her funds. I commend the Bill to the Assembly.
Debate (on motion by Mr Connolly) adjourned.