Bar Council seeks to tighten rules on handling of clients’ money
KUALA LUMPUR: Under a proposed move to tighten the rules governing handling of clients' accounts, lawyers may soon find it hard to withdraw money from these accounts.
The Bar Council's conveyancing practice committee chairman Roger Tan said the move was aimed at curbing incidences of fraud.
He said his committee was working with the Legal Profession Committee to propose amendments to the Solicitors Accounts Rules 1990, which were drawn up under the Legal Profession Act 1976.
Among the changes being looked at include:
· PROHIBITING lawyers from issuing cash or bearer cheques or drawing money from their clients’ accounts via ATMs or online banking services;
· REQUIRING lawyers to issue only account payee cheques;
· INTRODUCING a two-signatory rule for withdrawals from the clients’ account if it exceeds a certain limit;
· WHETHER a sole proprietor is required to hire a bookkeeper to comply with the two-signatory rule; and
· ONLY a partner of a firm may sign a cheque to withdraw money from the clients’ account.
Tan said the Bar Council was always conscious of its responsibility to protect the public against errant lawyers and the maintenance of public confidence in the lawyers who hold their clients’ money as stakeholders or trustees.
Among the situations where lawyers hold clients' money as stakeholders are when property purchasers pay the balance amount for the property they are purchasing to the lawyer to enable their loans to be released, and when lawyers collect the 10% deposit from clients when the sale and purchase agreement is signed.
The House Buyers Association lauded the move as it came in the wake of reports that more than 100 lawyers were wanted by police regarding investigations into criminal breach of trust cases.
The association's secretary-general, Chang Kim Loong, said the proposed changes were good as they made the whole process a lot more transparent.
Chang said it was also necessary to ensure that if two partners in a firm with multiple partners colluded to cheat, the firm had to be held responsible.
He added that ensuring young lawyers were educated in managerial and accounting practices would also curb instances of cheating.