New regulations to put brakes on thieving lawyers
Misuse of clients’ monies by attorneys-at-law remains “a worrying trend” for the General Legal Council (GLC), but the watchdog is hoping that new amendments to its accounting regulations, which take effect in January 2022, will nip the problem in...
Misuse of clients’ monies by attorneys-at-law remains “a worrying trend” for the General Legal Council (GLC), but the watchdog is hoping that new amendments to its accounting regulations, which take effect in January 2022, will nip the problem in the bud.
Under the Legal Profession (Accounts and Records) Regulations 1999, attorneys-at-law are required to submit an accountant’s report to the council annually unless he or she files a declaration that satisfies the council that owing to the circumstances of the case, it would be unnecessary or impractical to do so.
But the GLC has found a number of deficiencies with how the regulations function.
“A worrying trend has been that several attorneys who have misappropriated clients’ money have nevertheless been able to submit unqualified annual accountant’s reports.
“In addition, a number of attorneys have submitted accountant’s reports prepared by unqualified persons and, in at least one instance, the annual accountant’s reports bore the purported signature of an accountant who had died some years prior to the date of the reports,” the GLC said in its latest annual report (April 2020-March 2021).
However, chairman of the GLC, attorney-at-law Allan Wood, in a recent interview with The Gleaner, said that the amendments will not only address those deficiencies but will also assist the council in reviewing how attorneys are maintaining their clients’ accounts. The changes should also aid the early detection of irregularities such as misappropriation.
“It is hoped that we will pick up problems like that much earlier than is now occurring because experience tells us that you have signs long before you have major acts of misconduct. There are signs along the way, it develops. That has been our experience,” Wood, a Queen’s Counsel, said.
The GLC chairman also noted that in tightening the regulations, accountants who will be preparing reports are required to provide more details in cases where they find matters of concern.
They are also required to separately notify the council where serious deficiencies/irregularities have been detected in the course of preparing the report and to submit a copy of their current practising certificate with the reports under the Amended Accounting Regulations 2021.
The amendment regulation will, however, reduce the burden on attorneys with small practices by permitting the filing of a declaration by the lawyer in lieu of an accountant’s report, where the trust money received by the attorney in any calendar year comprises fee advances that do not exceed $3 million in aggregate, the GLC noted in its annual report.
The accountant’s report or declaration must be filed no later than six months after the start of any financial year unless the lawyer recognises a different period for his or her financial year.
Also, an attorney who fails to submit his or her report is, therefore, in breach of the regulations and has committed an act of professional misconduct.
Wood is advising the public to track the GLC’s website to find out whether attorneys-at-law are up to date with their filings.