Wilkinson Kate: Lawyers and Conveyancers Bill — In Committee 
Wilkinson Kate: Lawyers and Conveyancers Bill — In Committee 
[Volume:629;Page:1536] 
KATE WILKINSON (National) 
: 
 In rising to speak to Part 6 of the Lawyers and Conveyancers Bill relating to the conduct of practice by practitioners I refer to my short address on Part 5. Whilst both lawyers and conveyancers are to have their own respective practice rules or codes of conduct it is vital that they dovetail together to ensure consistency of standards. The standards of professional conduct and client care must be upheld and maintained if this dual profession is to have any integrity if it is to be held in any respect and if it is to enjoy the total confidence of the clients. In this regard the maintenance of a properly managed trust account is critical. Lawyers receive clients’ funds—their hard-earned savings—in trust in order to purchase that iconic Kiwi home. That money is sacrosanct. It must be protected; there must be no defalcations. That is the responsibility and the trust currently enjoyed by lawyers and that will be the responsibility to be had and the trust to be earned by conveyancers. 
This part of the bill also provides for the rules relating to trust accounts and the management of such trust accounts and I would just like to indulge members and step them through a typical conveyancing transaction in relation to the financial aspects. At the commencement of a transaction a deposit is often paid to the solicitor’s trust account to be held on trust until any conditions contained in an agreement for sale and purchase are fulfilled. Prior to settlement if mortgage moneys are required once the documentation has been duly signed the solicitor then signs a certificate to the bank certifying that all those documents have been properly signed and that on receipt of the mortgage funds the solicitor in effect guarantees that the bank will get its mortgage security. The client’s personal contribution is also paid to the solicitor’s trust account. All those funds are then paid over to complete the purchase transaction. So money is flowing in and out of the trust account for any number of different clients at the same time and for any number of different purposes. It is absolutely vital when dealing with other people’s money that the proper accounting practices are in place and are complied with at all times. That money does not belong and never belongs to the solicitor or—when this legislation is passed—to the licensed conveyancer. It belongs to the client to be held exclusively for that client and to be paid as that client directs. 
There must be the ability for an independent auditor or person to examine from time to time the accounts of conveyancing practitioners. Such examinations and investigations give integrity to the whole system and they are preserved in clause 96 of this bill. There must be regulations relating to the use and audit of trust accounts. There are provisions for many of those regulations to be provided prohibiting for example the collection of a client’s money by a lawyer regulating the lending of a client’s money by a practitioner and prohibiting the borrowing of a client’s money by a practitioner. Those guidelines are firm and they must be obeyed. Members will also see that trust account management is vital and having the training for that is vital. There is provision for such training for those intending to set up their own trust accounts. It is interesting that there is also provision for those intending to be directors. I wonder whether there is an omission in this bill as it does not address the situation of existing partners who have already undergone such training and who want to avail themselves of incorporation. Will they have to be retrained? Those existing partners already have to undergo retraining under the trust account partners scheme. If they have to have new training as well as the retraining it might be a wee bit of overkill for those who are already experienced in the running of a trust account. 
Those existing partners have been managing their trust account for years. The situation is not like that of the conveyancers who are suddenly coming to this afresh and who have had no training whatsoever and no experience in running trust accounts. Do existing trust account partners really have to undergo the new training just because they now want to incorporate?