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SMDF: Council Duties

On the 13th April 2011 the Council of the Law Society unanimously decided … to convene an EGM of the members of the Law Society and… recommended to support SMDF financially… up to a maximum of €16 million…

Following the failure to achieve their objective in the EGM, the matter was remitted to a postal poll of Law Society members. The Council is promoting the proposal in the poll and is using the resources of the Law Society to ensure acceptance.

A large number of the Council members are members of the SMDF. Their personal interests require that the proposal be adopted. Those personal interests arise from membership of SMDF, not as ordinary members of the Law Society.

Council members are fiduciaries and the applicable law is clear;

“ is an inflexible rule of the Court of Equity that a person in a fiduciary position… is not, unless expressly provided, entitled to put himself in a position where his interest and his duty conflict.”

[Bray v Ford (1896 AC 44)]

It is a breach of corporate law and good governance to allow such a situation to arise, Even if the proposal is carried, it is open to challenge in the High Court because of the breach of fiduciary duty by the Council.