Parliament: New Law Society fund to benefit those eligible and in need of free legal services, says Indranee

Senior Minister of State for Law Indranee Rajah said subsidiary legislation will prescribe how the Unclaimed Money Fund is to be used.
Senior Minister of State for Law Indranee Rajah said subsidiary legislation will prescribe how the Unclaimed Money Fund is to be used.PHOTO: GOV.SG

SINGAPORE - A new fund to be managed by the Law Society is not an additional source of revenue, but is aimed at funding pro bono services, Senior Minister of State for Law Indranee Rajah assured Parliament on Tuesday (March 20), as she moved for changes to the Legal Profession Act.

In response to queries from MPs, she said subsidiary legislation will prescribe how the Unclaimed Money Fund (UM Fund) is to be used which the Minister must approve.

"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 fund, to be run by the Law Society, will handle client money that is left unclaimed in situations such as when a client goes incommunicado or when lawyers want to retire and close their law practices but are holding on to unclaimed money.

Such lawyers are in a difficult position and the proposed new law provides a "practical solution" , said Ms Indranee.

Lawyers and law firms will be able to transfer the unclaimed client monies into the UM Fund subject to certain requirements and the approval of the Law Society.

Clients who later surface can apply for the money to be returned if their claims are made within six years of the date the Law Society approved the transfer of the unclaimed money. However, the Society will also have the discretion to make ex-gratia payments on a case by case basis, if claims are made though the six-year limit has passed.

The new fund will also take client money that is unclaimed for a different reason.

This comes about when Law Society has to intervene in client accounts because the sole proprietor of a law firm has died, been made bankrupt or become physically or mentally incapacitated.

This "intervention money" - client money in such a situation - is paid into a special account, for the Society to administer, and where possible, returned to the lawful owner. As at March 31 last year, the Society held on trust $379,131 in unclaimed intervention money.

Currently, if "intervention money" is unclaimed after six years in the special account, it is credited to the Society's Compensation Fund but with the changes, will be channelled into the UM Fund instead.

Each of the 5,500 practising lawyers in Singapore contributes $100 a year to the Compensation Fund, which stands at about $13 million. The Compensation Fund was set up in 1962 to compensate those who suffer financial losses due to the misconduct of dishonest lawyers.

Responding to an inquiry from MP Rahayu Mazam, Ms Indranee said the six-year deadline was meant to limit the period against all actions to be brought against any lawyer or practice that had ever held the unclaimed money previously, thus ensuring "clarity and certainty".

A second major area of the Bill enhances the existing range of sanctions to deal with errant lawyers under the disciplinary process. These remedial measures include training and counselling, and add to the existing options for dealing with less serious disciplinary matters.

A third area of the changes to the Act introduces a registration category for non-practising foreign law experts to appear in the Singapore International Commercial Court, to make submissions on matters of foreign law.

Other miscellaneous amendments include giving the Law Society greater flexibility in the use of interest, dividends and accretions of capital arising from its Compensation Fund towards a wider range of worthwhile causes. Currently its council can use such monies only to buy and maintain a library for members' use.

"The majority of the amendments being introduced in this Bill are at the request of the Law Society," said Ms Indranee.

Several MPs spoke in support of the Bill including Mr Christopher de Souza, Mr Murali Pillai, Mr Louis Ng and Madam Rahayu.

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."

He noted the Unclaimed Money Fund provides a practical win-win solution for all.

Parliament passed the Legal Profession( Amendment) Bill 2018.