Fidelity Fund
The Lawyers and Conveyancers Act introduces a new Lawyers’ Fidelity Fund – Part 10 (ss 304-332).
Old fund
The old fund, established under the Law Practitioners Act 1982, will continue to operate for some time and will continue to apply to thefts by lawyers occurring before 1 August 2008. The old fund cannot be wound up until:
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the NZLS gives public notice of the last day of making claims
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the NZLS is satisfied that all pre-1 August 2008 claims have been received and fully dealt with and notice to that effect is given to the Minister of Justice
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any claims received in the period of 12 months from the date of the report to the Minister are fully dealt with
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there is an Order in Council declaring the old fund to be wound up.
New fund
Under the LCA, all claims relating to theft by lawyers from 1 August 2008 will be made against the new Lawyers’ Fidelity Fund, provided for under Part 10 of the new Act.
The LCA (Lawyers: Fidelity Fund) Regulations 2008 provide for the establishment, maintenance and management of the new fund.
The new regulations also include forms for claims and declarations in support of claims.
An important change that distinguishes the new fund from the old fund is that the maximum amount payable to an individual claimant under the new fund is $100,000 (Regulation 11). There is no limit in respect of claims made under the old fund.
As with the old fund, the new fund has a provision that there will be no compensation in respect of money instructed to be invested (s 322 of the LCA).
Contributions to the new fund are payable by all practitioners who practice on own account, other than those who elect not to receive money or other valuable property in trust (s 317 of the LCA).