The Fidelity Fund: A Joke or a Grain of Seriousness? – A Reflection on the Legal Profession Regulation Bill 2017) (Part Two)


“Musical innovation is full of danger to the State, for when modes of music change, the fundamental laws of the State always change with them.” 
                                                     PlatoThe Republic

The wind of change and shocking innovations brought by the Legal Profession Regulation Council Bill 2017 will take quite some time before those who have taken time and energy to go through it will get over it. For those who have not really done a holistic reading of its provisions or those who merely had a pleasurable reading of it, their reactions will of course be different. For me, what I have seen after my considered reading is a blister of dangerous clouds hanging freely in the air to drop, and when they drop, legal practice and profession in Nigeria will become not only too dangerously regulated, but also unjustifiably cowed in the four corners of some people’s parlours.

One of the rather shocking innovations in the Bill is the introduction of what is to be known as the Legal Practitioners Fidelity Fund (LPFF). The LPFF is established under section 87(1) of the Bill, which has seven (7) subsections in all, and each subsection comes with further explanation on the purport of the LPFF. The provisions of the subsections can be summarized as follows:

(1) The LPFF has a singular purpose which is to compensate persons who suffered pecuniary damage, due to the default of a legal practitioner or a law firm.

(2) Moneys in the LPPF must be contributed by all legal practitioners on yearly basis, in addition to paying their yearly practicing fee.

(3) The Legal Profession Regulatory Council (LPRC), which is now going to be the apex regulatory body in the legal profession, has the exclusive power to set the amount payable by each legal practitioner.

(4) The LPRC is obligated to issue certificates to legal practitioners who have contribution yearly to the LPFF to evidence that their payments are up to date.

(5) The LPRC has the sole discretion to utilize the compulsory contributions made to the LPFF as it deems fit. And the LPRC has the sole discretion to invest the contributions in anything it likes pending the time the LPRC will decide to use the contributions for the real purpose for which it is set up.

(6) The money-related loss that LPRC has an obligation to use the contributions to reimburse must arise from two categories, namely: (i) theft committed by a legal practitioner or his employer in his relationship with his client; and (ii) a legal practitioner’s (or his employee’s) dealing with a client’s property or money entrusted in him in the course of his practice or in his capacity as an executor or administrator of an insolvent estate.

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(7) The LPRC has an obligation to determine the maximum compensation that may be paid to an individual claimant.

The overall concerns on the issue of LPFF and the attendant implications that come with them may be hydra-headed. However, I have streamlined the concerns to just two. While the first is the rationality and justification for establishing the LPFF in the first place, the second is the perceived problems that the presently inelegantly drafted provisions of section 87 will create. To say the least, both concerns come with their own challenges.

Rationality or Justification for LPFF?

Except the people responsible for drafting the Bill or the National Assembly that is on the verge of passing it will come out to convince the entire members of the Legal Profession, I still find it astonishingly difficult to find a rhyme or reason why one legal practitioner is now to be compelled by law to pay for the fault, default, negligence or theft committed by another legal practitioner. This is the purport of the LPFF. On the face of it, it will appear that the LPFF is made to operate like some form of insurance policy for legal practitioners that is designed to take care of two things— (i) to compensate clients and other people who have suffered money-related loss while their cases or issues are being handled by their legal practitioners; and (ii) to ensure that there is monetary compensation available to give to such clients and other people affected in the event that the defaulting legal practitioners have no money or are not in a position to refund or cater for the loss experienced by the clients.

Even though there is a line of demarcation between law and morals, every law still finds its origin in a certain moral, and one must be able to trace such moral to the society where the law emanates from. The trillion dollar question at this point is: “When does it become morally justifiable or rationally excusable for one professional who has been careful, diligent and sincere with his profession to be asked to pay for the deliberate theft, default, fault or negligence of another professional, all in the name of pleasing the clients of the defaulting professional?” For those who have not had a good reading of section 87 that established the LPFF, that is what it is seeking to do!

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Maybe the perceived fraternity in the legal profession has now been redefined to capture the Shakespearean theme in Romeo and Juliet— that is, we swim together and we sink together; we live together and we die together! In effect, when one legal practitioner commits theft or defaults in carrying out his professional duty which he has been paid for or commits negligence that leads to pecuniary loss of his clients, then we all must be responsible for it and contribute for the reimbursement of that client. I say again, that is the purport of the LPFF. The only reason why all legal practitioners must now contribute to the LPFF is to settle and compensate persons who have suffered pecuniary loss in the hands of some defaulting legal practitioners.

What better way can one qualify injustice than this? It will seem lawyers who are the Seekers and Ministers in the Temple of Justice are now to be ministered by the LPRC through the corridors of injustice in a most exploitative way. There is the principle that lex non cogit ad impossiblia which coincides with another principle that you cannot impose a fine or a colouration of it on a person who has committed no wrong. With the greatest respect, the LPFF and the entire provisions revolving around it are reprehensible and capable of causing commotion to the sanctity of the legal profession. Apocalypse should take place first before the day when lawyers who are responsible for setting people free from shackles are now being cowed and convicted for offences committed by other people. In the light of this, the LPFF concept is recommended for immediate ‘excommunication’ from the Legal Profession Regulation Council Act 2017. I only hope that legal practitioners will generally follow up with the Bill and ensure provisions as those on the LPFF do not see the light of the day.

On the Issue of Inelegance of the LPFF Provisions

Assuming all legal practitioners decide to accept the introduction of the LPFF and decide to keep mute about it, the entire provisions of section 87 may still not fully achieve its intended purpose, or may be twisted to accommodate a purpose(s) for which it was not originally intended. To start with, the phase “persons who suffer pecuniary loss due to defaults by legal practitioner or a law firm” is so wide that it is capable of entitling not only the clients (primary claimants) who entered into a retainship agreement or legal relation with the legal practitioner, but also other secondary claimants (persons to whom the primary claimants owe certain financial obligations) and tertiary claimants (persons to whom the secondary claimants owe certain financial obligations). This will obviously lead to a floodgate of claims because a lot of interest holders may suffer pecuniary losses at the same time, owing to defaults by a legal practitioner towards his original clients.

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There is also the issue of unchecked discretion given to the LPRC. The LPRC has the sole discretion to use the LPFF as it deems fit pending when it will use it for its original purpose. At the same time, it has the discretion to determine the maximum amount that may be paid to a claimant. One major concern here is that since the LPRC is now to be the apex regulatory body in the legal profession, there is no other body recognized under the Bill to check its use of the fund. Also, there is the high likelihood that clients whose moneys or properties have been stolen or mismanaged by defaulting legal practitioners will still go to court anyway to file suits against such legal practitioners. Should this be the case, the entire purpose of the LPFF will appear to have been defeated as legal practitioners will have contributed the moneys for nothing.

The Legal Profession Regulation Council Bill 2017 seems to me to be a Bill that still requires a lot of mechanical cleanup by relevant experts, stakeholders and legal practitioners in the legal profession. For all it is worth, the LPFF is one innovation that has to be completely expunged from the Bill.

–Bolaji Ramos, Esq.

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