John Hamilton
John Hamilton

Scottish Solicitors’ Guarantee Fund
for the year ended 31st October 2004

Statement of Committee’s Responsibilities
The Constitution of the Scottish Solicitors’ Guarantee Fund requires the Committee to prepare accounts for each financial year, which give a true and fair value of the state of affairs of the Fund and of the surplus or deficit for that period. In preparing those accounts, the Committee require to:

The Committee is responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Fund and to enable it to ensure that the accounts comply with the requirements of the Constitution. They are also responsible for safeguarding the assets of the Fund and hence for taking reasonable steps for the detection of fraud and other irregularities.

Accounts & Contributions
The Annual Accounts to 31st October 2004 are set out in the Appendix to this Report. They show that 3,729 solicitors contributed to the Fund (2002/03; 3,723). As noted in previous years, income generated from subscriptions is primarily intended to cover the administration of the Fund. However following a significant recovery of dividends received from the estates of sequestrated solicitors in respect of previous claims paid, we are pleased to report a surplus of income over expenditure of £109,000. This surplus is after deduction of £187,000 of claims paid from the fund.

Solicitors (Scotland) Accounts Rules
Accounts Rules
During the year the Council carried out 480 (2002/03 : 500) inspections of the books of solicitors’ practices. Most were found to be in order, however there were eight firms where the Council was satisfied that the situation warranted a complaint being made to the Discipline Tribunal.

Of the eight complaints noted above, and of the fifteen carried forward from previous years, five solicitors were struck off and nine were found guilty of professional misconduct.

There were no new cases where Council was required to instruct Interventions (2002/03 : four) under Section 46 where sole practitioners ceased to practise without making arrangements to dispose of their practice.

Again this has been another busy year for the monitoring team with a significant burden of training being needed to be absorbed by the team in respect of new commitments and the training of new members of staff. It is still taking some 2.5 years to complete the reinspection cycle, with some firms taking longer to be visited, depending on time of year and location.

Thanks are due to Morag Newton and the monitoring team for their continuing efforts.

The internal changes to working procedures has produced a consistent improvement in performance in this area, although resolving inspections as a matter of correspondence is still taking too long to complete in respect of a significant minority of inspections.

The changes to the Accounts Rules made following the AGM in 2004 are bedding down slowly. There have been initial problems arising from solicitors who have sent in the old style of Accounts Certificate. It is hoped that firms with accounting periods ending from March 2005 will have been advised to update their Certificate format. It would be helpful if solicitors check the wording for Certificates covering the peak month ends of March and April 2005 before sending them into the Society. Since the start of 2005, those firms who do not hold client funds, but who operate as agents for other solicitors are now able to submit a separate and simplified form of Accounts Certificate. The Committee hopes this will assist the solicitor in dealing with this routine task.

Morna Grandison and the team working in the Interventions Department have had another very busy year with additional Factory appointments coming in quick succession this always places considerable amount of extra work on the team, which has been handled in the usual expert way by Morna and her staff.

Thanks again to the team for their continuing efforts.

Accounts Certificate Rules
During the year to 31st October 2004, the Council did not require to suspend from practice any solicitor in respect of failure to comply with these Rules.

The profession continued to comply with the timely submission of these certificates during the year and has again exceeded expectations.

Claims on the Fund
As at 31st October 2004, the Funds in hand, together with the estimated dividends from estates of sequestrated solicitors and the contributions due from members, were more than the total claims intimated and still to be investigated.

The Annual Accounts show that grants of £187,000 (2002/03 : £73,000) were authorised by the Council to be paid during the year in respect of losses suffered by clients. Claims intimated amounting to £64,000 were either withdrawn or, for various reasons, rejected by the Council.

Auditors
KPMG LLP, Chartered Accountants, have signed the audit report and a resolution to reappoint KPMG LLP as auditors will be put to the members at the Annual General Meeting.

Committee membership
John Hamilton (Convener)
*
Morris Anderson
*
Ruthven Gemmell
*
David McClements
*
Mary MacRae
*
Peter Matthews
*
James Millar
*
Scott Miller
*
Alistair Morris
*
Walter Semple
*
Mark Thorley
*
Leslie Cumming (Secretary)
*