New Zealand Law Society - Lawyer censured for breaches of the Trust Account Regulations

Lawyer censured for breaches of the Trust Account Regulations

This article is over 3 years old. More recent information on this subject may exist.

A Standards Committee has determined that a lawyer’s breaches of the Trust Account Regulations (TA Regulations) were sufficiently serious to warrant a finding of unsatisfactory conduct.

Amongst the breaches found were:

  • The trust account records had not been updated for several years despite the practitioner certifying to the Law Society that the ledger was correctly reconciled.
  • Balances were recorded with neither dates nor references.
  • The firm’s cashbook records did not identify the payer and, in some circumstances, the payee.
  • A ledger was overdrawn by several hundred dollars on several occasions.
  • The practitioner neglected to provide clients with transactional trust statements at intervals of not more than 12 months for all transactions not completed in a 12-month period.

The Committee noted that compliance with the TA Regulations is a fundamental element of client service and the Regulations are requirements that no partner or director of a law firm can be unaware of.

The Committee considered that the lawyer’s conduct was “a serious violation of the Act and the TA Regulations, gravely jeopardising the relationship of trust between lawyer and client.”

Had the practitioner not taken steps to improve his practice, the Committee would have seriously considered referring the matter to the New Zealand Lawyers and Conveyancers Disciplinary Tribunal.

The lawyer was censured, ordered to undergo further practical training and asked to make his practice available in 6 months’ time to verify his compliance.

Information about the role of Standard Committees

The Law Society administers one aspect of the complaint and disciplinary process – the Lawyers Complaints Service – which receives complaints about lawyers. Complaints are referred to independent Standards Committees which are responsible for investigating and deciding on the outcome of complaints made about lawyers. The Law Society has no power to direct Standards Committees to take further action or to influence the outcome of their inquiries. Members of Standards Committees are lawyers and lay people.

Standards Committees have the power to undertake investigations of their "own motion". Such investigations arise where matters are referred to the Law Society (other than as a complaint); or where the person raising a concern opts not to take an active role as a complainant. 

At the conclusion of the Standards Committee’s process, a Standards Committee may decide to take no further action; may find that a lawyer has engaged in unsatisfactory conduct; or may make a referral to the Lawyers and Conveyancers Disciplinary Tribunal if it considers the conduct complained of may amount to misconduct. 

Only the Standards Committee can make an order to publish its decision, including any names of lawyers, in summary or in full. 

There is more information about the co-regulatory system governing the legal profession here.