Solicitor's Undertaking
Certain Investment Companies have approached members of the profession seeking undertakings to support considerable borrowings from lending institutes where the solicitor's undertaking indicates adequate collateral and security (which is stated to be unencumbered) to back such undertakings and borrowings, which it is indicated are under the control and supervision of the solicitor concerned.
Inducements for giving such undertakings are very often considerable large and very tempting to the unwary.
Solicitors should not give such undertakings unless they are absolutely certain that such collateral is evidently available, clearly unencumbered and is and will remain under the personal control and supervision of the solicitor concerned.
The letter undertaking drafted by such companies requires the solicitor to certify membership of the Solicitors Mutual Defence Fund. Practitioners will be aware that the SMDF indemnity is limited to 拢250,000 in respect of each claim by a member.