Law Society Inspectorate carried out 544 trust account reviews
New Zealand Law Society inspectors carried out 544 reviews of the trust accounts of legal practices in the year to 30 June 2010, according to the Society’s annual report on the exercise of regulatory functions and powers.
The report was presented to Parliament on 29 October by the Minister of Justice, the Hon Simon Power.
It says that the Law Society has continued the scheme for the protection of money entrusted to legal practices. This is known as the Financial Assurance Scheme, and includes an Inspectorate established and maintained in accordance with the Lawyers and Conveyancers Act (Trust Account) Regulations 2008.
Functions of the Inspectorate include review of lawyers’ trust accounts, ensuring compliance by lawyers with the legislation regulating trust accounts, investigating the affairs of pratices and lawyers where necessary and educating lawyers and law firms on their trust account obligations.
The report says that in addition to the 544 reviews, the Inspectorate oversaw 26 systematic compliance reviews of practices which are not assessed as of sufficient risk to require a full inspection. These reviews were carried out by three chartered accountancy firms engaged by the Law Society.
There were 29 reviews referred to local Lawyers Standards Committees, the report states.
“Five were referred on to the New Zealand Lawyers and Conveyancers Disciplinary Tribunal, 15 are still with the Standards Committees pending further action, six were ordered to improve in particular areas and three required no further action.”
The Inspectorate also investigated the affairs of seven law practices, using its powers under s109 of the Lawyers and Conveyancers Act 2006. Three of these resulted in reports to the New Zealand Police, five were referred to the Disciplinary Tribunal, one is held pending further inquiries and one resulted in no further action.
The report says the Inspectorate comprises a manager, who is also an inspector, and eight other inspectors. It says that during the year the Inspectorate also participated in compulsory courses for lawyers intending to practise on their own account as barristers and solicitors.
“They also maintained and presented programmes for trust account supervisors and administrators as well as conducting seminars on trust account-related issues and preparing articles for publication to lawyers by the New Zealand Law Society.”