Legal Profession (Amendment) Bill

Order for Second Reading read.

The Senior Minister of State for Law (Ms Indranee Rajah) (for the Minister for Law): Mr Deputy Speaker, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a Second time."

This Bill makes amendments to the Legal Profession Act in three main areas.

First, it introduces new measures to the disciplinary framework for lawyers to supplement the existing suite of measures.

Second, it introduces a framework to deal with unclaimed client money and brings unclaimed intervention money within the same framework.

Third, it introduces a registration category for non-practising foreign law experts to appear in the Singapore International Commercial Court (SICC) to make submissions on matters of foreign law.

It also contains certain miscellaneous and technical amendments. The majority of the amendments being introduced in this Bill are at the request of the Law Society.

Let me now take the House through the key amendments in the Bill.

The legal profession is a noble one and members of the profession must continue to hold themselves to the highest ethical standards of professional conduct. This is essential to Singapore's reputation as an international legal services hub as well as for the protection of the public and clients.

Under the current disciplinary framework for lawyers, the range of disciplinary measures available to the Law Society Council include issuing a warning or reprimand to the lawyer, and/or ordering the lawyer to pay a penalty. In more egregious and serious cases of misconduct, the Court of three Judges can order that a lawyer be suspended or struck off the roll of advocates and solicitors.

This Bill introduces more nuanced and calibrated options to the range of disciplinary measures. The amendments seek to deal with the root causes of certain types of misconduct, reduce recidivism, as well as widen the range of measures available to deal with less serious disciplinary matters.

Clauses 2, 22, 23, 24 and 26 to 29 of the Bill thus expand the range of measures that may be imposed during disciplinary proceedings to include remedial measures. Such remedial measures can be imposed in addition to, or in lieu of, the current options which are available to the Law Society Council. The amendments will enable the Council to prescribe remedial measures, such as those which involve training, counselling and other means of rehabilitation. This does not mean that serious cases of misconduct will be dealt with lightly. Rather, it strengthens our disciplinary framework for lawyers with a broader range of disciplinary options that can be imposed, together with other existing measures, or in lieu of, where appropriate.

The second main set of amendments introduced a framework to deal with unclaimed client money and unclaimed intervention money.

Client money refers to the money which lawyers and law practices may receive in the course of client engagements, to hold on behalf of their clients. The Act currently requires all client money to be held and administered by the practising lawyer in a client account. The money remains in the client account until it is paid out based on the client's instructions or returned to the client.

However, the Act does not currently specify what happens when client money is left unclaimed in a client account, for example, if the client becomes uncontactable. In these cases, the lawyers and law practices concerned would be unable to close the client account, and must hold the unclaimed client money indefinitely, incurring costs in administering the client accounts. Lawyers who want to retire and dissolve their law practices, but who are holding onto unclaimed client moneys, are in a difficult position. They either have to find another practising lawyer willing to take over the administration of the client account, or they would be unable to retire and must continue to bear the expenses of maintaining their law practices and these client accounts.

Clause 18 of the Bill provides a practical solution to this problem. A new Unclaimed Money Fund (UM Fund) will be maintained and administered by the Law Society. Solicitors and Singapore law practices will be able to transfer unclaimed client money into the UM Fund, provided that they satisfy certain requirements and the Law Society approves the transfer. These requirements will be prescribed by the Law Society Council with the Minister's approval and will include what reasonable efforts the solicitor or Singapore law practice should have made to return the money, before the Society will approve a transfer. Such "reasonable efforts" will take various circumstances into account, for example, more robust steps may be required in the case of larger amounts, and account may be taken of practical issues which may arise in cases of very old client accounts. Provision is made for the framework to be extended, where appropriate, to foreign lawyers and foreign law practices or entities regulated under the Act.

Once the money is in the UM Fund, should the lawful owner of the unclaimed client money surface after the money has been transferred to the UM Fund, the new section 70L provides a statutory mechanism for such persons to apply to the Law Society for the transferred money to be returned. Such claimants may also approach their lawyers, and their lawyers can apply to the Law Society on the claimants' behalf for the transferred money to be returned to the claimants. Details of the statutory mechanism will be prescribed in subsidiary legislation.

The new sections 70K(4) and 70L(1) provide a six-year limitation period, commencing from the date the Law Society approves the transfer of the unclaimed client moneys, for actions or claims to recover the transferred unclaimed client money. After six years, any rights the client may have against the lawyer in relation to the unclaimed client money, or any statutory claim a claimant may have against the Law Society, will be extinguished. This is so that there will be clarity and certainty for the lawyers and law practices who transfer unclaimed client money into the UM Fund, especially for those who do so with a view towards retirement.

However, the new section 70L(5) states that the Law Society has the power to make discretionary, or ex gratia, payments from the UM Fund to claimants who apply after the time bar. The Law Society's discretion will be exercised on a case-by-case basis. In exercising its discretion, the Law Society will consider factors, such as the reasons why the claimant did not approach the Law Society before the time bar, for example, whether they were prevented by matters, such as fraud or disability, and whether there will be undue hardship if no ex-gratia payment is made.

The Law Society may invest or use the money in the UM Fund, as prescribed, to fund pro bono services provided by the Law Society or by any of its wholly-owned subsidiaries. This allows the unclaimed client money to be applied towards the public good instead of idling in a client account.

It should be noted that the issue of unclaimed client money is not unique to Singapore. Solicitors in England and Wales have a framework under which a solicitor may pay unclaimed client money below a certain threshold to a charity, provided that certain requirements are fulfilled.

I deal now with unclaimed intervention money. I mentioned earlier that unclaimed intervention money will be brought within this framework. Let me explain what this is.

Under the current Act, the Law Society has the power to intervene in a lawyer’s practice in specified circumstances, for example, where a sole proprietor has died. As part of the intervention, the Law Society may take over the administration of the lawyer’s client accounts. The client money in these client accounts is called intervention money. It is because the Law Society has intervened.

The intervention money is transferred into a special account held by the Law Society for the Law Society to administer, including returning the intervention money to the lawyer’s clients.

The Act currently provides that intervention money which has remained unclaimed for six years in the special account will be transferred to the Compensation Fund. In the event that a claimant surfaces after six years, the Law Society has the discretion to make an ex-gratia payment out of the Compensation Fund.

Clause 31 of the Bill amends the current Act to provide for intervention money that has been unclaimed for six years in the special account to be transferred to the UM Fund instead of the Compensation Fund. Similarly, in the event that a claimant surfaces after six years, any ex-gratia payments by the Law Society will be paid out of the UM Fund instead.

I now deal with the introduction of a registration category for non-practising foreign law experts to appear in the SICC to make submissions on matters of foreign law. Sir, SICC was established in 2015 as a division of the High Court to hear international commercial disputes, including those governed by foreign law. To date, SICC has heard 17 cases, with diverse subject matters, including banking and finance, shipbuilding, construction, investment and involving parties from jurisdictions, such as Australia, Japan, Hong Kong, the United Arab Emirates (UAE), India and Indonesia.

Clauses 8 to 16 of the Bill seek to allow a non-practising foreign law expert, such as an academic, to appear in SICC to make submissions on matters of foreign law. This will allow experts with specialised knowledge on matters of foreign law, based on their training, study or experience, or who are otherwise qualified, to appear in relevant proceedings in the SICC and relevant appeals in the Court of Appeal to submit on matters of foreign law. Applications for registration of a law expert can be made to the Registrar. The Bill also extends the current complaints process, which is currently applicable to foreign lawyers registered to appear in SICC, to these foreign law experts. Related amendments to the Supreme Court of Judicature Act are also made.

It is common in international commercial arbitration practice for law experts to make submissions on foreign law before tribunals. Extending this option to users of SICC will further enhance the attractiveness of SICC as a premier international commercial Court.

Let me now touch briefly on the other key miscellaneous amendments.

First, clauses 3 and 20 of the Bill amend the Act to give the Law Society Council the power to require prescribed classes of solicitors who practise or intend to practise in a prescribed area of law, to make a declaration when applying for a practising certificate. This amendment puts into effect the recommendation of the Study Committee on Professional Standards and Etiquette in Court under the auspices of the Singapore Academy of Law’s Professional Affairs Committee.

The intention is to prescribe that solicitors who practise in the area of litigation will need to complete a short online test on professional conduct rules administered by the Law Society and declare that they have done the test before applying for or renewing their practising certificates. The test is not intended to be an onerous requirement but will serve as a self-learning and self-assessment tool to remind solicitors of their obligations as members of a noble profession. This will propagate good practices as well as reinforce and serve as a useful reminder of changes relevant to the practice area. Council also has the powers to exempt a solicitor or a class of solicitors from making a declaration, if the Council is satisfied that the solicitor or the class of solicitors is already equipped with the knowledge and skills required for practice in that area of the law.

Second, currently, the Law Society Council is only able to apply interest, dividends and other accretions of capital arising from the Compensation Fund which consists of contributions from solicitors, to purchase and maintain a library for its members’ use. Clause 19 of the Bill makes amendments to provide Council with greater flexibility to use such interest, dividends and other accretions of capital towards a wider range of worthwhile causes.

Third, clause 17 of the Bill allows penalty sums which are collected from solicitors who fail to vote at the annual election of Law Society Council members to be credited to the Law Society, instead of the Compensation Fund.

Fourth, clause 4 of the Bill extends an exception relating to the requirements for a practising certificate, which are currently applicable to solicitors employed by the Law Society, to those employed by wholly-owned subsidiaries of the Law Society.

Fifth, clause 30 of the Bill allows Singapore law practices which are structured as law corporations and limited liability law partnerships to form a group law practice. Currently, only Singapore law practices structured as sole proprietorships and partnerships may form a group law practice. This updates the group law practice scheme which was introduced prior to the introduction of law corporations and limited liability law partnerships.

Sixth, clause 25 of the Bill clarifies that a senior judge of the Supreme Court of Singapore can be appointed to sit as the President of the Disciplinary Tribunal.

And lastly, clauses 5, 6 and 7 of the Bill repeal section 36F of the current Act and makes consequential amendments as this category of registration of lawyers has been subsumed into other legislation categories under the regulatory regime and is no longer needed.

In summary, all these amendments that I have mentioned will ensure that our framework for the legal industry continues to remain up to date and responsive to changes in the legal landscape. Mr Deputy Speaker, Sir, I beg to move.

Question proposed.

Mr Deputy Speaker: Mr Christopher de Souza.

4.01 pm

Mr Christopher de Souza (Holland-Bukit Timah): Sir, two of the three stated objectives in the long title of the Legal Profession Act are to constitute the Law Society and to amend and consolidate the law relating to the legal profession.

The legal profession plays an important role − an integral role − in the administration of justice in our rule of law society. 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.

Firstly, this Bill facilitates the Law Society to perform functions and activities better. It provides for wholly-owned subsidiaries which would allow the Law Society to make use of separate legal entities to perform functions and activities.

One of these functions could be pro bono services as clause 4 also allows solicitors employed under the wholly-owned subsidiary to apply for a practising certificate. This is also supplemented through clause 19 that allows the wholly-owned subsidiary to use accretions to capital from the Compensation Fund.

Through the new section 70J(3)(b), the new UM Fund would also complement that financial support for the Law Society's pro bono services and the activities of a wholly-owned subsidiary. These amendments would support the ongoing pro bono efforts by the Law Society.

At this point in time, I should declare that I am a legal practitioner at the Singapore Bar.

One of the stated missions of the Law Society is to ensure access to justice for all, and one way this has been done is through pro bono services. Some of the excellent work is reflected in the Community Legal Clinic Scheme, the Criminal Legal Aid Scheme (CLAS) and the Ad Hoc Pro Bono Referral.

Not restricted to individuals, the Law Society also works with voluntary welfare organisations (VWOs) and charities which are unable to afford legal consultation and representation due to limited resources. Law Awareness seeks to "break 'legal jargon'" into accessible "easy-to-understand elements" for the public through talks, exhibits, resource materials. Therefore, these welcome amendments enhance the Law Society’s contributions to our community.

Secondly, Sir, the Bill furthers the drive to make Singapore a robust regional and global legal hub. Clause 30 introduces a new Division 5 that would regulate group practices in Singapore by Singapore and foreign law practices. This provides for another option that law practices may choose to organise themselves within, allowing for more flexibility in how practices may choose to position themselves in the legal industry.

This Bill also provides for law experts to appear before SICC and relevant appeals in the Court of Appeal. The expertise from which SICC can draw on in a proceeding is no longer limited to practising solicitors, persons admitted under section 15 ad hoc admissions or foreign lawyers registered under section 36P. But these legal experts serve a separate function. They come into the picture when the SICC orders that a question of foreign law be determined on the basis of submissions, instead of proof.

Thirdly, this Bill seeks to further regulate the Bar. On this theme, I have two clarifications for the Minister.

Firstly, I would like to ask for an elaboration on clause 20, new section 75E, which provides for declaration of practice areas on practising certificates, unless exempted. May I ask the Minister what is the thought behind this and how would it work?

My second clarification for the Minister is on the introduction and expansion of remedial measures. While it may provide for an intermediate option in addressing situations, the Bill sets few parameters on what kind of remedial measures Council can make under the new section 97A. While Ministerial approval is necessary, it seems as though the power is constrained only by the purpose of the rule, that is, new section 97A paragraph (a) which says "to address any issue concerning the professional practice, etiquette, conduct or discipline of a regulated legal practitioner" and paragraph (b) "any requirements that Council may specify for compliance with an order of the Council under section 88(1A) or 94(3A)".

The latter seems to include warning, reprimand and financial penalty as remedial orders. My clarification for the good Minister is why are the safeguards in section 88(2) and section 88(3) not extended to the new subsections (1A) and (1B) even though they may carry similar consequences?

In short, my position is that any remedial actions must also be fair to the practitioners, and the process in deciding whether a remedial action should be administered should also be fair to the practitioner.

Fourthly, Sir, through the setting up of the UM Fund, clients’ interests continue to be safeguarded, while providing a practical solution for some solicitors’ conundrum. These changes would allow lawyers who wish to retire to do so, by relieving lawyers of the burden and expense of maintaining the client account. This is especially pertinent as the solution mechanism of "intervention money" being paid into the Compensation Fund does not reflect our current legal industry landscape where law firms may not always continue across generations.

Hence, the UM Fund would allow solicitors to avoid this conundrum in the future. Furthermore, these unclaimed monies can be used for a public good. The new section 70J(3)(b) in clause 18 provides that it can be used for "pro bono services provided by the Law Society or by any wholly-owned subsidiary of the Society".

Sir, even as this solution provides a win-win situation for the community and the relevant solicitor, it will also provide sufficient safeguards to ensure client’s interests are not compromised. The purpose under which a solicitor may apply to transfer money into the UM Fund will be restricted under section 70J(2) and (3). Claims against the Fund are also allowed up to six years after the transfer, after which the Society still retains the discretion to pay part or whole of the amount being claimed. In this manner, the UM Fund provides a practical win-win solution for all.

Sir, the Legal Profession has an important role in ensuring that Singapore remains a country run on the rule of Law. This Bill augments that aim and, therefore, I support it.

Mr Speaker: Mr Murali Pillai.

4.10 pm

Mr Murali Pillai (Bukit Batok): Mr Deputy Speaker, I declare my interest as a practising lawyer.

The Legal Profession (Amendment) Bill introduces various amendments to the Legal Profession Act. The introduction of a further disciplinary option that can be imposed against an errant legal practitioner and the creation of the UM Fund are noteworthy innovations that should be welcomed by Members of this House. I wish to make three short points on the proposed amendments.

First, clause 17 of the Bill proposes to amend section 50 of the Act to allow for the penalty paid by any lawyer for failing to vote in council elections to be paid to the Law Society and not the Compensation Fund. The Compensation Fund is a fund administered by the Council of the Law Society to serve a public purpose in that grants may be paid out of the Fund to mitigate loss suffered by any person due to dishonesty of a lawyer or a member of his staff.

A similar amendment was made in 2001 for penalties paid as a result of disciplinary proceedings to be paid to the Society, instead of the Consolidated Fund, so that the Law Society could use the monies for worthy causes, such as providing pro bono services or creating legal awareness.

In these circumstances, what is the purpose behind the change, and will the monies directed to the Society be also used for similar worthy causes to serve public interest? What would be the consequent effect on the Compensation Fund, in terms of its funding level, if the monies were to be channelled to the Society? Would the Fund have sufficient funds to meet claims from members of the public? Also, given that the Law Society has just moved to e-voting recently, what is the expected amount of revenue generated for use by the Society from penalties for failing to vote?

Second, the Bill introduces the establishment of a new UM Fund to allow for the transfer of unclaimed client or intervention monies to be paid into the Fund and to vest in the Law Society absolutely. At the same time, it does not appear that the proposed amendments require the Law Society to take reasonable efforts to return the monies to the owners.

In this regard, I note that the hon Senior Minister of State stated that the Law Society requires solicitors to expend reasonable efforts before they are being allowed to transfer those monies to the Law Society. But vis-à-vis the Law Society itself, it is not clear what steps the Law Society would have to undertake and who checks on the Society in relation to the steps the Law Society would have to undertake to locate these claimants or potential claimants.

In the context of Government agencies, the Ministry of Finance (MOF) had made a statement that all Government agencies, including Statutory Boards, are required to make all reasonable efforts to return unclaimed monies to the rightful owners promptly. This being the case, what can be done to ensure that the Law Society expends sufficient efforts to contact the rightful owners of these monies before it decides to use these monies for pro bono services?

Finally, the proposed amendments to the Act expand the range of measures that may be imposed by the Inquiry Committee, the Council and the Disciplinary Tribunal to include remedial measures to be taken by the legal practitioner.

Given the breadth of professional conduct rules legal practitioners are bound by, could the hon Senior Minister of State please clarify what kind of remedial measures are contemplated, and in what situations would remedial measures be imposed? I believe the hon Member Mr Christopher de Souza made a similar request.

In this regard, I wonder if there is any reason for the proposed amendments not to provide for the Court of Three Judges, which sits at the apex of the disciplinary process to also impose remedial measures. Would the hon Senior Minister of State accept that the absence of the empowering provision does not curtail the powers of the Court of Three Judges to impose requirements on legal practitioners, such as undertakings to the Court which may mirror obligations imposed through the remedial measures? Notwithstanding the clarifications I raised, I support the Bill.

Mr Deputy Speaker: Mr Louis Ng.

4.15 pm

Mr Louis Ng Kok Kwang (Nee Soon): Sir, I stand in support of this Bill. Lawyers I spoke to welcome, in particular, three changes that have been proposed.

The first relates to the appointment of law experts in cases before SICC, a move, no doubt put in place to improve the quality of arguments raised in SICC on foreign law issues.

The second relates to the establishment of the UM Fund to be administered by the Law Society of Singapore. The amendment will result in certain monies that are unclaimed being put to use in, amongst other things, pro bono services.

Finally, there is the introduction of the imposition of remedial measures upon a regulated legal practitioner by the Council of the Law Society of Singapore or the Disciplinary Tribunal. Previously, the options were limited to the issuance of a warning, a reprimand or the imposition of a fine. These were aimed at censuring and punishing the errant regulated legal practitioner and may not have addressed root causes for the impeached conduct. While the precise type of remedial measures that may be imposed will be set out in further subsidiary legislation, it is heartening to see that there is now another option available which is not entirely punitive in nature.

However, it is with this last change that I now seek clarifications. The Bill proposes to allow an Inquiry Committee to recommend to the Council of the Law Society of Singapore that a penalty, warning, reprimand, and/or requirement of compliance with remedial measures be imposed on a practitioner, without any formal investigation by a Disciplinary Tribunal. The Council of the Law Society can then make such a determination under the new section 87 of the Act.

Significantly, the amendment to section 88(1) proposes to make the imposition of a penalty, warning and/or reprimand mandatory by changing the wording to "must give" from the original "may give". The question is, why are we changing from a "may" to a "must"? Lawyers I have spoken to are concerned about the mandatory imposition because this seems to render the practitioner's opportunity to be heard on the matter under section 88(3) futile.

In the interest of fairness and in line with the right to be heard, the practitioner really ought to be able to make her or his case on the matter and section 88(3) should remain. Can the Senior Minister of State clarify how section 88(3) is consistent with the mandatory imposition under section 88(1)?

Further, I note that the imposition of the remedial measures by Council is sought to be introduced by way of a new section 88(1A), but section 88(3) of the Act remains unchanged. This seems to suggest that a practitioner will not be heard before remedial measures are imposed upon him or her by the Council.

Can the Senior Minister of State clarify whether a practitioner also has the right to be heard before Council imposes remedial measures on him in the same spirit of fairness?

Sir, while we welcome the introduction of measures that focus on remediation rather than punishment, I hope the Senior Minister of State can clarify whether the right of the practitioner to be heard will be preserved. Sir, notwithstanding the above clarifications, I stand in support of this Bill.

Mr Deputy Speaker: Ms Rahayu Mahzam.

4.18 pm

Ms Rahayu Mahzam (Jurong): Thank you, Deputy Speaker. I declare that I am a lawyer in private practice.

The Legal Profession Act and the various subsidiary legislation, including the Legal Profession (Professional Conduct) Rules and the Legal Profession (Solicitor's Account) Rules, govern the profession and help ensure that the integrity of the profession is preserved. I am heartened, therefore, by the further enhancements that I believe will ensure that the high standards expected of the profession will be maintained.

I wish to record my observations on several proposed amendments in this Bill.

Firstly, I note clauses 22, 23, 24 and 26 to 29 of the Bill relate to amendments to expand the range of measures that may be imposed in disciplinary proceedings to include remedial measures. This is a laudable move in that it allows for a suite of more nuanced, meaningful and fair sanctions. The profession calls for high standards of conduct, and I believe we should continue to assert this. However, it is important to have regulation that seeks to encourage good behaviour and rehabilitate undesirable conduct, instead of being merely punitive. I, therefore, hope that in its application, the directions or orders for remedial measures will help to encourage better conduct amongst the lawyers who face disciplinary proceedings.

Secondly, I note the introduction of the new Part VB relating to the UM Fund. This is definitely a welcomed move. For far too long, lawyers have had difficulties in dealing with monies put in as deposit by clients or deposited in favour of the clients, who subsequently cannot be reached. Lawyers are required to keep monies belonging to clients in the client's account, until there is a proper invoice or proper instructions are given for monies to be paid out. When the clients cannot be contacted, the lawyer then has difficulties. There have been situations where the lawyer cannot close the firm because of this outstanding issue. Typically, the lawyer would ask another lawyer to take over the account, but this can be a hassle. The issue is now resolved with the introduction of the UM Fund.

I appreciate the effort in calibrating the provisions of this new section to be fair to the lawyer, the Law Society as well as the client, especially if eventually he or she does show up and claim the monies. I note that the effect of the proposed sections 70K(3) and 70K(4) is that the lawyer may potentially face a claim from a client that resurfaces within six years from the time the unclaimed money is transferred to the Law Society. I appreciate that the proposed clause 70L allows for a channel for the client or claimant to apply to the Law Society for payment of the whole or part of the unclaimed money and, upon payment, the Law Society and lawyer are discharged from liability to the claimant for the amount paid. In these circumstances, may I seek clarification on the intent of section 70K(4) as there would be a wait of six years before the lawyer is discharged and free from any liability?

I am heartened that there is provision in the proposed section 70L(5) to deal with situations where claims come in after the expiry of the six-year period. I believe this reflects reasonableness and compassion, values which should be upheld by the fraternity.

The final point I wish to raise is on the usage of the monies in the UM Fund. I note that the monies forming part of the Fund may be used to fund, amongst other things, pro bono services provided by the Law Society. The provision of pro bono services, in my view, is a key component within the community as it helps to augment the existing Legal Aid scheme that is available. I hope that with the access to this new Fund, there would be more resources and additional effort to bridge any gaps in the provision of legal services, especially to those who may not meet the criteria to obtain Legal Aid.

As mentioned above, I believe that the proposed amendments will ensure that the high standards expected of this profession will be maintained. I stand in support of this Bill.

Mr Deputy Speaker: Senior Minister of State Indranee Rajah.

4.22 pm

Ms Indranee Rajah: Mr Deputy Speaker, I thank the Members who have spoken for their support of the Bill.

Mr Murali Pillai and Mr Christopher de Souza inquired about the circumstances under which remedial measures may be imposed on a lawyer and what kind of remedial measures can be imposed.

The introduction of remedial measures under the disciplinary framework for lawyers allows the Law Society Council to have a wide range of measures to deal with less serious disciplinary matters. These remedial measures can be imposed in addition to or in lieu of the current options which are available. Such remedial measures may involve training, counselling and other means of rehabilitation. These provide for a more nuanced, tailored and effective means to address the root causes of certain types of misconduct as well as reduce recidivism. Such remedial measures will be set out in subsidiary legislation.

Mr Murali Pillai also asked why the proposed amendments do not provide for the Court of three Judges to impose remedial measures, unlike the Law Society Council or the Disciplinary Tribunal.

The answer is that the system design is such that by the time it comes before the Court of three Judges, it means the case has gone well beyond remedial measures.

The Court of three Judges is disciplinary in nature, not remedial. By the time a complaint involving misconduct by a lawyer comes before the Court of three Judges, three stages in the disciplinary review process would have been completed.

First, a Review Committee would have decided that the complaint is of such substance that it must be referred to an Inquiry Committee.

Second, the Inquiry Committee would already have found that the case of misconduct has been made out against the lawyer, and it would have taken the view that the complaint must be referred to a Disciplinary Tribunal.

Third, the Disciplinary Tribunal would have determined that cause of sufficient gravity for disciplinary action exists such that the matter has to be referred to the Court of three Judges.

As Members will see, it is a vigorous process and one in which less serious infractions capable of remediation are weeded out early and dealt with. Each step of the process deals with increasing levels of severity of lapses or infractions. The complaints which come before the Court of three Judges are, therefore, the ones that involve egregious cases of misconduct for which the remedial actions are not sufficient or appropriate.

But that said, as pointed out by Mr Murali Pillai, that does not foreclose the Court of three Judges from imposing requirements on legal practitioners, such as undertakings to the Court which may mirror obligations imposed through remedial measures.

We do not condone bad behaviour by lawyers and we wish to send a message that errant lawyers will not be let off lightly for serious cases of misconduct.

This brings me to Mr Louis Ng and Mr Christopher de Souza's point on the correlation between the amendments to section 88(1) read with section 88(3) and the opportunity to be heard under the latter provision.

As mentioned, the disciplinary process for lawyers is multi-tiered. A lawyer who is the subject of a complaint may have reasonable opportunity to be heard by the Inquiry Committee. After the Council has considered the report of the Inquiry Committee, it can determine that no formal investigation is required and no penalty will be imposed on the lawyer. Council can also determine that there should be a formal investigation by the Disciplinary Tribunal.

What section 88 deals with is the intermediate situation where it has been determined by the Council that some wrongdoing has occurred but no formal investigation is needed. So, it does not need to be referred to the Disciplinary Tribunal.

With the amendments, this now allows for two options under section 88. First, the existing option for imposing a warning, reprimand or penalty continues to apply. These sanctions are entered as adverse orders against the lawyers named on the roll. Second, the new remedial measures, which are rehabilitative in nature, can also be considered. As mentioned, these remedial measures may include counselling and training for the lawyer.

In line with the nature of the remedial measures which are not punitive and consistent with the objective of rehabilitating the lawyer, these are not entered against the name of the lawyer on the roll. In the event Council wishes to impose the former – meaning the reprimand or the penalty – the lawyer is always offered an opportunity to be heard. If having heard his explanations, Council remains of the view that those sanctions continue to be appropriate, those sanctions will be applied. This is how it is currently done and, therefore, there is no substantive change to the operations of section 88(1).

Where the lawyer has been heard by Council and Council agrees that a warning, reprimand or penalty is not appropriate, Council may, pursuant to the new section 88(1A), impose a remedial measure that does not go into the lawyer's disciplinary records. And in that situation, he would already have been heard in the first instance. So, this addresses both of Mr Louis Ng's points as well.

Mr Murali Pillai asked whether there are sufficient monies in the Compensation Fund. The Compensation Fund was first established in 1962 and it is maintained and administered by the Law Society. Where it has been proven to the satisfaction of Council that a person has sustained loss as a result of dishonesty by a lawyer, the Law Society may, if the Council thinks fit, make a grant to that person out of the Compensation Fund with the purpose of relieving or mitigating that loss.

All practising lawyers have to make an annual contribution of S$100 to the Compensation Fund, bringing the total annual contribution to about S$500,000. For the financial year ending 31 March 2017, the balance in the Compensation Fund amounted to S$13 million. Over the past six years, about S$500,000 was paid out from the Compensation Fund. As such, there are sufficient monies in the Compensation Fund to meet the purposes of the Fund.

Let me now address amendments relating to payment of penalties, for failure to vote, to the Law Society rather than the Compensation Fund. Currently, where Members fail to vote at Council elections, they pay a penalty of S$500, which is credited to the Compensation Fund.

First, the Law Society's position is that the failure to vote at Council elections has no nexus with professional misconduct but rather pertains to the administration of the Law Society or its governance. As such, penalty sums should be credited to the Law Society instead of the Compensation Fund. This will allow the Law Society to use the monies in a manner that advances the public interest.

Second, as the Member has highlighted, allowing the penalty sum to be credited to the Law Society also aligns with the current crediting of penalties to the Law Society under section 95 of the Act, where the Council has ordered a lawyer to pay a penalty.

Mr Murali Pillai asked about the expected amount of monies generated from penalties for failing to vote, given that the Law Society has moved to electronic voting for its Council elections recently.

The average penalty collected prior to the implementation of online voting was about S$28,000. Since the implementation of online voting in October 2016, the amount of penalty sums collected has decreased significantly. For the period April 2017 to January 2018, the penalty sums collected decreased to S$13,500. Hence, the amount in question is not large.

Mr Christopher de Souza asked about the operation and thinking behind clause 20 of the Bill, which relates to the requirement for prescribed classes of solicitors who practise or intend to practise in a prescribed area of law, to make a declaration when applying for a practising certificate.

As mentioned, this amendment puts into effect the recommendation of the Study Committee on Professional Standards and Etiquette in Court under the auspices of the Singapore Academy of Law's Professional Affairs Committee, which looked into issues of professional standards and Court etiquette for the Bar.

One of the Study Committee's recommendations was for the Law Society to introduce an online test to remind members of their professional obligations as counsel, and decorum and etiquette in Court. The Law Society's intention is to prescribe that solicitors who practise in the area of litigation will need to complete a short online test and declare that they have done the test before applying for or renewing their practising certificates.

This online test will be a self-assessment and self-learning tool to propagate good practices, as well as to reinforce and serve as a useful reminder of changes which are relevant to their practice area. For new entrants to the profession, and for those for whom litigation may not be a core practice area, they will benefit from having more guidance by way of this online test.

The amendments in the Bill also allow the Law Society Council to exempt a solicitor or a class of solicitors if it is satisfied that the solicitor or class of solicitors is already equipped with the knowledge and skills required for practice in that area of the law.

Next, I will deal with the UM Fund.

Mr Murali Pillai asked why the proposed amendments do not require the Law Society to take reasonable efforts to return the money to the owners. The reason is because, that should have been done by the solicitors as part and parcel of their duties even before they pay the money over to the UM Fund. The Law Society's role is primarily that of a repository of the unclaimed moneys and administration of the approved uses to which it can be put. Its other role is to make discretionary decisions on payments out to clients after expiration of the limitation period.

Broadly summarising, the new section 70K provides that a solicitor or Singapore law practice may apply to pay into the UM Fund, money which should be paid to the client but which they are unable to do so, despite making such reasonable efforts as the Law Society may require. So, in other words, the lawyer or the law firm has to make all reasonable efforts first, before they can pay money over to the Fund. As to what the "reasonable efforts" are, the subsidiary legislation will prescribe what the required "reasonable efforts" are, taking into account relevant circumstances previously mentioned. In turn, the Law Society may not approve a transfer unless it is satisfied that the prescribed “reasonable efforts” requirements have been satisfied.

The burden of taking steps to return the money is rightly placed on the lawyers because they are the ones with the primary duty to return the money to the client, and they are the ones who have the files and records and will, therefore, be in a better position to contact the clients. It would not be practical to expect the Law Society to make efforts to search for the owners of the money when their own lawyers have been unable to find them despite reasonable efforts.

In any case, as I mentioned earlier, if the lawful owner of the money surfaces after the money has been transferred, they will still be able to apply to the Law Society for the transferred money to be returned to them. This strikes a balance on what is fair on the lawyer, the client and the Law Society.

To complement the framework, my Ministry has also written to the Secretariat of the Professional Conduct Council to ask them, to consider introducing in the Legal Profession (Professional Conduct) Rules, an express duty for lawyers to take reasonable efforts to return client money without undue delay, once the money is no longer required for the purpose for which they are held. If implemented, such a duty may reduce the number of new cases of unclaimed client money being accumulated.

Finally, I would like to reassure Mr Murali Pillai that the new UM Fund is not an additional source of income for the Law Society. Rather, the Act, as amended, expressly requires the money to be invested for use to fund pro bono services. The subsidiary legislation will also prescribe in greater detail how the money in the Fund may be used and, in this regard, the Minister must also approve any subsidiary legislation which the Law Society Council makes for the purposes of the framework. This will serve as an additional check.

Thus, it would be fair to say that 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.

Separately, Ms Rahayu Mahzam had inquired about the intent of the new section 70K(4). To summarise, this section provides that no action to recover any transferred unclaimed client money may be brought – after the expiry of six years from the date when the Law Society approves the transfer – against, first, the solicitor or Singapore law practice that paid the transferred unclaimed client money into the UM Fund or, second, any solicitor or Singapore law practice that held the money on account of a client at any time before that money was paid into the Fund.

The intent of the provision is to set a limitation period of six years against all actions that may be brought against any lawyer or law practice who has ever held the unclaimed client money previously.

The provision distinguishes between (a) the lawyer who transferred the unclaimed client money into the UM Fund, and (b) any lawyer who may have held the money previously, to account for the possibility that some unclaimed client money may have been passed from one retiring lawyer to another practising lawyer previously. Such retired lawyers will, therefore, also have the clarity and certainty arising from the limitation period, too.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Ms Indranee Rajah.]

Bill considered in Committee; reported without amendment; read a Third time and passed.