New Zealand Law Society

Navigation menu

Failed to maintain proper accounting records

03 April 2020

All names are fictitious.

A lawyer has been censured for failing to maintain proper accounting records and failing to correctly complete the monthly trust account certification.

A lawyers standards committee determined those two failures were unsatisfactory conduct.

The committee began an own motion investigation on receipt of a report from the New Zealand Law Society | Te Kāhui Ture o Aotearoa Inspectorate.

The report showed that from December 2017 to October 2018 proper accounting records were not maintained and monies received were not receipted.

The report also identified that the lawyer, Fermanagh, failed to correctly complete the required monthly trust account certifications.

“In both her initial response and submissions [Fermanagh] has set out a number of personal factors that impacted on her ability to properly attend to the requirements of running her practice,” the committee said. There were also issues with the accounting system that Fermanagh was operating.

“There is no doubt that things were done incorrectly, and errors were made.

“[Fermanagh] accepts that the standard of her record keeping deteriorated as a result of the circumstances she found herself in, although she believed that at the time she was correctly certifying.

“With the assistance of the Law Society inspector and professional colleagues she has improved her systems and practices to a standard where the appropriate records are being maintained and proper and timely certification is occurring,” the committee said.

The committee agreed that Fermanagh’s actions since the investigation began went to mitigation and penalty and noted that there was no evidence of loss of client monies.

The committee said it considered the facts in this case were similar to the New Zealand Lawyers and Conveyancers Disciplinary Tribunal decision in [2011] NZLCDT 31.

In that decision, the Tribunal said: “lawyers hold a position of privilege and trust in handling the funds of their clients, thus there must be strict observance with the conditions on which they do so, in order to maintain the confidence of the public in the profession as a whole.”

“Ultimately there is little room for discretion with trust account breaches, whatever the reasons may be,” the committee said.

As well as the censure, the committee ordered Fermanagh to undertake the Trust Account Supervisor Refresher Course within 12 months of its decision and to pay $500 costs.

Last updated on the 3rd April 2020