THE Law Society has moved a step closer to tightening controls to safeguard the money clients hand over to lawyers, in the wake of the disappearance of lawyer David Rasif who absconded with millions.
One of the key measures announced yesterday compels lawyers to have a second signatory for withdrawals of more than S$50,000 (RM118,000) of clients money.
Currently, a second signatory is required for withdrawals of more than S$5,000 (RM11,800), but sole proprietors can bypass this requirement by using an approved bookkeeper to audit their books every month. However, this leaves a period of time each month when it is possible for an errant lawyer to make off with a clients funds.
The second signatory has to be a lawyer with at least three years experience.
Lawyers will also be barred from withdrawing clients funds from ATMs. And any cheques issued to the law firm must specify if they are meant for the firms account or the clients account.
These safeguards were among a slew of proposals made by a Law Society committee in June following the disappearance of Rasif, who is believed to have fled with more than S$10mil (RM23.6mil) of his clients money.
For large sums of money, such as deals involving property development and conveyancing, the society suggested the Singapore Academy of Law hold the funds.
Sums involving conveyancing transactions could also be held in a joint account to which the lawyers for both the buyer and the seller are signatories.
The society also proposed setting up an insurance policy in its name to cover clients who lose money to errant lawyers.
While lawyers agreed the recommendations were helpful to win the trust of their clients, some were worried about increased costs.
One lawyer, who declined to be named, said she would be reluctant to act as a second signatory.
I will think long and hard before signing. You will never know the true character of a person, even if he is your friend. What if I sign and he runs away with the money?
Agreeing, lawyer David Ng said it may prove difficult for a lawyer to get another as a signatory.
It is hard enough for sole proprietors as it is. More costs will mean more difficulties to survive on your own, he said. The Straits Times / Asia News Network
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