Money unclaimed by lawyers' clients to go to new fund

A new fund, made up of monies unclaimed by lawyers' clients, will be used to provide funding for pro bono services, Senior Minister of State for Law Indranee Rajah said in Parliament yesterday.

The Unclaimed Money Fund (UM Fund) will be managed by the Law Society.

The setting up of this fund will allow lawyers who want to retire and close their law practices to do so, even if their clients can no longer be contacted to take back their money.

It was part of several changes to the Legal Profession Act passed by Parliament yesterday.

The unclaimed monies can be transferred by lawyers and law firms into the UM Fund subject to certain requirements and the approval of the Law Society.

Clients who appear later to seek the money can apply for it to be returned if their claims are made within six years of the date the Law Society approved the transfer of the unclaimed money.

After that, the Law Society can make ex-gratia payments on a case-by-case basis.

During the debate, Ms Indranee also told the House that subsidiary legislation will prescribe how the money in the UM Fund is to be used. This must have the approval of the Minister.

"It is fair to say the people who will benefit from the new UM Fund will be members of the public who are in need of and eligible for the Law Society's pro bono services," she added.

The new fund will also take charge of clients' money when the Law Society is forced to intervene in client accounts for various reasons, like when the sole proprietor of a law firm is made bankrupt.

This "intervention money" is first paid into a special account for the Law Society to administer, and where possible, returned to the lawful owner.

As at March 31 last year, the Law Society held in trust $379,131 in unclaimed intervention money.

Currently, when "intervention money" is unclaimed after six years in the special account, it is credited to the Law Society's Compensation Fund.

With the changes in the Act, it will be placed in the UM Fund.

The Compensation Fund, which had about $13 million as of last March, is for compensating those who suffer financial losses owing to lawyer misconduct.

The new law also enhances the existing range of sanctions to deal with errant lawyers under the disciplinary process by including remedial measures like training and counselling. It also introduces a registration category for non-practising foreign law experts to appear in the Singapore International Commercial Court.

Several MPs spoke in support of the Bill, including three lawyers: Mr Christopher de Souza (Holland-Bukit Timah GRC), Mr Murali Pillai (Bukit Batok) and Ms Rahayu Mahzam (Jurong GRC).

Said Mr de Souza: "Through ways such as providing legal advice, representation and promoting legal literacy through education, lawyers play an important role in access to justice.

"This Bill furthers their efforts and the legal profession's contribution to society."

Law Society president Gregory Vijayendran last night lauded the changes, adding that they were "forward-looking and positive moves".

A version of this article appeared in the print edition of The Straits Times on March 21, 2018, with the headline 'Money unclaimed by lawyers' clients to go to new fund'. Print Edition | Subscribe