New South Wales Repealed Acts

This legislation has been repealed.

LEGAL PROFESSION ACT 1987 - SECT 80

80 Claims against Fidelity Fund

(1) The Fidelity Fund is held, and is to be applied, by the Law Society for the purpose of compensating persons who suffer pecuniary loss because of a failure to account or a dishonest default.

(1A) Without limiting subsection (1), a claim lies against the Fidelity Fund for the purpose of compensating persons who suffer pecuniary loss:

(a) occurring wholly in this State from a failure to account or a dishonest default (whether or not in the course of practising in this or another State) of a solicitor who is a local legal practitioner or a contributing interstate legal practitioner, or

(b) occurring both in this State and in another State or a Territory from a failure to account or a dishonest default (whether or not in the course of practising in this or another State) of a solicitor who is a local legal practitioner, or

(c) occurring both in this State and in another State or a Territory from a failure to account or a dishonest default (in the course of practising in this State) of a solicitor who is a contributing interstate legal practitioner, or

(d) occurring in this State or another State or a Territory, or both, in circumstances in which it cannot be determined precisely where the loss occurred, from a failure to account or a dishonest default (whether or not in the course of practising in this or another State) of a solicitor who is a local legal practitioner, or

(e) occurring in this State or in another State or a Territory, or both, in circumstances in which it cannot be determined precisely where the loss occurred, from a failure to account or a dishonest default (in the course of practising in this State) of a solicitor who is a contributing interstate legal practitioner, or

(f) in any other circumstances in which an agreement or arrangement under section 48ZC provides that a claim is payable.

(1B) Without limiting subsection (1), a claim lies against the Fidelity Fund for the purpose of compensating persons who suffer pecuniary loss occurring wholly in this State from a failure to account or a dishonest default (whether or not in this State) of a locally registered foreign lawyer who has paid a contribution required to be paid in accordance with regulations under section 78A.

(2) A claim against the Fidelity Fund is to be made in writing in the form approved by the Law Society.

(3) If a claim is made against the Fidelity Fund, the Law Society Council must:

(a) investigate the claim, and

(b) determine the claim by wholly or partly allowing, compromising, settling or disallowing it.

(4) If a solicitor has failed to account or made a dishonest default, the Law Society Council may wholly or partly disallow a claim:

(a) if satisfied that the claim does not have sufficient connection with practice as a New South Wales solicitor in Australia (for example, because the claim arises from the receipt or entrustment of money or valuable property that was received by or entrusted to a solicitor outside Australia and the act or omission giving rise to the claim occurred outside Australia), or

(b) if the person who made the claim knowingly assisted in or contributed towards, or was a party or accessory to, the act or omission from which the failure to account or dishonest default arose, or

(c) if satisfied that the negligence of the person who made the claim contributed to the loss, or

(d) if satisfied that the conduct of the transaction with the solicitor was illegal, and the person who made the claim knew or ought reasonably to have known of that illegality, or

(e) if satisfied that proper and usual records were not brought into existence during the conduct of the transaction (or were destroyed), and the person who made the claim knew or ought reasonably to have known that such records would not be kept or would be destroyed.

(4A) Subsection (4) does not limit the Law Society Council’s power to otherwise disallow a claim.

(5) A person is not prevented from making a claim just because, after the act or omission by a solicitor from which the failure to account or the dishonest default arises, the solicitor:

(a) being a natural person, dies or ceases to be a legal practitioner or interstate legal practitioner, or

(c) ceases to practice as a solicitor, or

(d) ceases to hold a current practising certificate or interstate practising certificate.

(6) If the amount of a claim against the Fidelity Fund does not exceed $2,500 or such other amount as may be prescribed, the Law Society Council may allow the claim after waiving compliance with such of the provisions of this Division as it thinks fit.

(7) A claim does not lie against the Fidelity Fund unless the prospective claimant notifies the Law Society of the failure to account or dishonest default:

(a) in the case of failure to account-not later than 3 months after the prospective claimant becomes aware of the failure, or

(b) in the case of dishonest default-not later than 3 months after the prospective claimant becomes aware that there has been a failure to satisfy the relevant judgment debt for the period required before a claim can be made, or

(c) if the Law Society Council allows further time after the period of 3 months referred to in paragraph (a) or (b)-within the further time allowed, or

(d) if the Supreme Court allows further time after the Law Society Council refuses to do so-within the time allowed by the Supreme Court.

Note: There are constraints on the making of claims against the Fidelity Fund in respect of certain mortgage work carried out by solicitors. See Part 9.