The change would grant TLANZ members a share in Solicitors' Fidelity Guarantee Fund assets
Justice minister Paul Goldsmith has rejected a pitch put forward by The Law Association of New Zealand (TLANZ) to modify the Lawyers & Conveyancers Act 2006 to grant TLANZ and its members a share of Solicitors’ Fidelity Guarantee Fund (SFGF) assets.
The SFGF was established in 1982 under the Law Practitioners Act to address lawyer theft. The fund was closed in August 2008 with the implementation of the Lawyers & Conveyancers Act and a new Lawyers’ Fidelity Fund launched.
The SFGF currently contains $14.92m primarily in the form of cash and bonds, per the Law Society’s 2023-2024 annual report. The Law Society started winding up the fund in 2022.
An Order in Council confirming that the fund is wound up is expected; subsequently, the fund’s residual assets can be distributed. Under section 369 of the Lawyers & Conveyancers Act, a third of the SFGF funds must be moved to the Lawyers’ Fidelity Fund; the remainder is to be granted to the Law Society for use on its representative functions.
TLANZ asked Goldsmith to change the wording in the legislation from “by that society” to “to bodies representing lawyers and conveyancers who have been approved by the minister”. Per TLANZ in a LawNews release, the Regulatory Systems (Occupational Regulation) Amendment Bill came before the Education and Workplace Select Committee and incorporated six major changes to the Lawyers & Conveyancers Act.
TLANZ CEO Clayton Kimpton explained that the distinction was important because TLANZ, formerly the Auckland District Law Society, was not under the Law Society umbrella.
“TLANZ was the only district law society not to merge with NZLS, carving its way – along with other practice group and sector associations – as a representative body for the profession that is completely independent of the regulator (NZLS). TLANZ membership now sits at 8,200+, many of whom actually paid the SFGF levies that created the fund”, Kimpton said in a statement published by LawNews.
He added that the Law Society had only launched its membership representative function last year, something that he said “highlights the conflict NZLS now has as both the regulator and one of the profession’s many representative bodies”.
However, Goldsmith told LawNews that the government already had “an extremely busy legislative agenda”.
“I just couldn’t justify having legislation focused on that when we’ve got so many other pieces of legislation that we need to get on with”, he said.
TLANZ president Tony Herring expressed his disappointment with Goldsmith’s decision and called for the Law Society to reveal its plans for the SFGF funds.
“How and when does the regulator of our profession intend to apply those funds to ensure it fulfils the ‘representative functions’ requirements of s 369(2) of the LCA, and is the intention to represent all members of the profession or only those who have paid to join the NZLS membership program?” he asked in a statement published by LawNews.
