Combat Fraud

The Law Society receives reports on scams from time to time. To raise public awareness in the importance of conducting proper due diligence, the Law Society has created, since 2018, a public webpage listing reports that it has received relating to scam websites, emails or other means of communication in the name of bogus law firms or lawyers on fake law firm letterheads with false contact details, as well as fraudulent solicitations for legal assistance. The list is not exhaustive, but it serves as an educational reminder to consumers that they should take all steps they deem appropriate to confirm the true identity of the party they are dealing with and the authenticity of the relevant correspondence.

Law firms, solicitors and foreign lawyers properly registered with the Law Society are all listed in the Law List posted on the Law Society website. The public may check against the Law List, as well as other Panel lists maintained by the Law Society in relation to specialist areas like mediation, arbitration and solicitor advocates. The public is advised to contact the relevant law firm or lawyer directly by reliable means to verify any solicitations purportedly from the firm or a lawyer or staff member of the firm.

The reports on scams have been on the rise.

Not only do fraudsters impersonate lawyers, they may also, as in a recent property fraud case involving properties worth in total of over $60 million, impersonate property owners by using fake identification documents. Through the declaration of loss of title deeds, the fraudsters obtained a set of copy title deeds and dealt with the properties as if they were the real owners, scheming to eventually pocket the sale proceeds of those properties.

The Law Society has, from time to time, issued Circulars to members drawing their attention to some prevalent modus operandi of property fraud cases including the use of forged identity cards, forged title deeds and invalid powers of attorney.

The Law Society Practice Direction P (“PD P”) sets out the mandatory requirements on client identification, verification and due diligence. For the protection of their legal practice, solicitors must ensure that adequate steps are duly taken in compliance with the provisions in PD P.

On checking of identification documents of clients who they do not know personally, solicitors may find it useful to refer to the website of the Immigration Department which sets out the details of the security features and the codes on a smart identity card. Further, in appropriate cases, for example, where a client, whom the solicitor does not know personally, claims that he has lost all the title deeds of his property, the solicitor may invite the client to first apply for a Certificate of Registered Particulars from the Immigration Department to have his identity verified.

Further, ensuring compliance with the requirements of the Law Society Practice Direction L is also important for authentication of documents. Commentary 3(b) of Principle 2.04 of the Hong Kong Solicitors’ Guide to Professional Conduct provides that a solicitor must exercise control over and personally supervise or verify any signing or attestation of documents. It is a disciplinary offence not to comply with Law Society Practice Directions on practice supervision.

Fraudulent schemes take all shapes and forms. Owners and advisers must all stay vigilant for their own protection. A useful protective measure that owners may consider subscribing is the Property Alert service provided by the Land Registry. Upon subscription to the service, subscribers will receive notifications by email from the Registry when instruments affecting their properties have been lodged for registration and when the instruments have been registered. The Property Alert service helps property owners detect early unexpected or suspicious instruments delivered for registration against their properties so that they take prompt actions where necessary. Details of the service are available from the Land Registry website.

In some cases, the fraudster may add his name to the list of directors of a company which owns a property. The fraudster then carries on his fraudulent scheme as a director purportedly authorised to act on behalf of the company, for example, by proceeding to apply for and obtain a mortgage loan from an innocent finance company.

A facility that is useful in such a scenario is the e-Monitor service provided by the Companies Registry. It provides subscribers with an effective and convenient means to keep track of the filing records of a company. Electronic notifications will be sent to the relevant company subscribers instantly when a document is registered by the Companies Registry in the public records of the company.

With the escalating property prices, property fraud could lead to substantial losses. All who have a role to play in the property transaction process, including but not limited to owners, estate agents, banks, financiers and legal advisers, must all do our part to combat property fraud for the protection of innocent victims.

Reminders!

The time for completion of the relevant CPD and RME obligations for the 2019/20 and 2020/21 CPD practice years will expire on Sunday, 31 October 2021. Compliance with CPD and RME obligations is a condition precedent for solicitors to renew their 2022 practising certificates and a condition precedent for trainee solicitors to apply for admission as solicitors. The upcoming CPD and RME courses are posted on the website of Hong Kong Academy of Law at www.hklawacademy.org.

Monthly Statistics on the Profession

(updated as of 31 August 2021):

Members (with or without Practising Certificate) 12,581
Members with Practising Certificate

11,016(out of whom 7,924 (72%) are in private practice)

Trainee Solicitors 980
Registered Foreign Lawyers

1,495
(from 33 jurisdictions)

Hong Kong Law Firms

941 (47% are sole proprietorships and 42% are firms with 2 to 5 partners, 52 are limited liability partnerships formed pursuant to the Legal Practitioners Ordinance)

Registered Foreign Law Firms

85 (from 22 jurisdictions, 15 are limited liability partnerships formed pursuant to the Legal Practitioners Ordinance)

Civil Celebrants of Marriages 2,148
Reverse Mortgage Counsellors 404
Solicitor Advocates

84 (78 in civil proceedings, 6 in criminal proceedings)

Student Members 204
Registered Associations between Hong Kong law firms and registered foreign law firms (including Mainland law firms) 37

Heidi

Secretary-General, Law Society of Hong Kong