Firms urged to keep proper consumer records

June 15, 2018

Consumers often engage the services of a lawyer to act on their behalf to avoid legal risks and facilitate investments such as buying a property.

Consumers place their trust in lawyers that they will ensure appropriate procedures are followed in the purchase of property.

Engaging their services also means less hassle for the consumer, as it should reduce the amount of unnecessary time, money and resources to finalise the purchase of a property.

The Consumer Council of Fiji recently received a complaint regarding hassles and delays in a legal transaction regarding the purchase of a property.

The complaint was lodged by Vishnu, who had hired the services of a lawyer in 2016 to facilitate the purchase of a property he intended to buy. Vishnu was asked by the lawyer to pay $2,500 as a deposit.

After the purchase was finally confirmed, Vishnu enquired with his lawyer about the $2,500 deposit he had put into the trust account via a bank transfer. As Vishnu had understood, that $2500 was to be included in the sum paid to the vendor’s lawyer at the time of settlement.To his dismay, Vishnu was asked by his lawyer to justify with evidence that a deposit of $2,500 was made in 2016 via a bank transfer.

The law firm was not able to verify this information.Vishnu was frustrated as he had to provide the law firm with a copy of a bank statement which showed that the transaction did actually eventuate.

He was forced to face delays in the settlement simply because the law firm failed to update its records on this payment into the trust account.After providing the document needed to justify the deposit transaction, he received no further word from his lawyer regarding the matter. After 3 weeks of waiting, Vishnu lodged a complaint at the Council.

It is alarming to note that the law firm did not have any record of the deposit being made in 2016 and instead passed the burden of proving this on to the consumer.

This was an added hassle as the consumer had to liaise with the bank to provide statements for verification. This also resulted in the delay in the property settlement by almost a month.

Fortunately, after the Council’s intervention the lawyer confirmed that the property settlement was concluded. All the cheques, including the $2,500 deposit, was handed over to the vendor’s lawyer.

Section 4 (1) of the Trust Accounts Act 1996 stipulates that;“A trustee shall keep or cause to be kept displayed in the English language such accounting and other records of all trusts moneys as -(a) sufficiently explain the transaction recorded therein;(b) disclose at all times the true position regarding all trust moneys held and the application of trust moneys received;(c) are prescribed; and(d) enable the accounting records to be conveniently and properly audited.”

This is further emphasised in the ‘Rules of Professional Conduct and Practice’ set out in the Schedule of the Legal Practitioners Act 2009.The Rules states:”7.1 Every practitioner shall keep proper books of account in respect of all moneys received by the practitioner in the course of practice whether such moneys be trust moneys or not.7.2 A practitioner shall comply with the provisions of the Decree, and any legislation dealing with the regulation of trust accounts”.Consumers invest their hard-earned money into milestone achievements such as buying a property and should not be subjected to disruptions during the process.

Law firms having a reliable and factual records system would decrease the time taken by consumers to verify their transactions with firms and its trust accounts.Consumers who meet all the requirements on their part and provide documents and fees needed for legal transactions expect a high standard of service in return.

The Council urges the Legal Practitioners Unit to hold lawyers accountable for their misconduct and unethical practices.Consumers facing similar circumstances are encouraged to call the Council’s toll free helpline on 155 for advice or complaints on the issue.

*Please be advised that the Consumer Council of Fiji will be moving to its new office at Level 5, Vanua House, Victoria Parade, Suva, on 28 May.