Hong Kong Regulations

SOLICITORS (PROFESSIONAL INDEMNITY) RULES - SCHEDULE 2

MANAGEMENT AND ADMINISTRATION OF FUND

[rule 5]

1. Power of Company to manage fund

The Company shall hold, and have power to manage and administer, the fund,
subject only to-

   (a)  such directions, conditions and requirements as the Society may from
        time to time issue to or impose upon it; and

   (b)  such arrangements as the Society may from time to time agree with it.

2. General powers

Without prejudice to the generality of paragraph 1 the management and
administration of the fund shall include power-

   (a)  to collect and recover contributions due to the fund in accordance
        with Schedule 1;

   (b)  to deposit or invest in such manner as the Company may determine all
        or any part of the fund, including any interest, dividends, profits,
        gains or other assets accruing to or acquired by the fund;

   (c)  to arrange such insurances as the Company may determine in respect of
        the fund and its assets and the fund's liability under these rules and
        the former Rules to provide indemnity in respect of claims and costs
        and expenses; and to handle all aspects of any such insurances,
        including the payment of premiums thereon out of the fund and the
        making and recovery of claims thereunder;

   (d)  to receive, investigate and handle claims to indemnity and other
        notices prescribed to be given to the Company by these rules,
        including settlement and compromise and making of ex gratia payments
        out of the fund in respect thereof and conduct of any dispute or
        difference referred to arbitration under rule 13;

   (e)  to investigate and handle any claim made or intimated against any
        indemnified, insured, or former solicitor in respect of which they are
        or may be entitled to be provided with Indemnity out of the fund or in
        respect of which the conduct is by these rules assigned to the
        Company, including settlement and compromise and making of ex gratia
        payments and conduct of any proceedings arising in respect of such
        claim;

   (f)  to claim and recover reimbursement in respect of any sums paid by way
        of indemnity in any circumstances in which such reimbursement may be
        claimed under these rules or the former Rules;

   (g)  to exercise any right of subrogation, subject to paragraph 8(6) of
        Schedule 3;

   (h)  to maintain full and proper records and statistics (which, subject to
        paragraph 4, shall at all reasonable times be available on request to
        the Society for inspection and copying) as to the fund and all aspects
        of its management and administration;

   (i)  to make to and review with, the Council annually, and at any other
        time that the Council may require, written and (if the Council so
        requires) oral reports as to the fund and, subject to paragraph 4, its
        management and administration, including recommendations as to the
        contributions which are or may be required in respect of past, present
        and future indemnity periods and the circumstances in which, extent to
        which and conditions and exclusions subject to which Indemnity should
        in any future indemnity period be provided out of the fund. (L.N. 111
        of 1992)

3. Additional powers

The Company shall further have full power-

   (a)  to engage the assistance of any third party in respect of any aspect
        of the management and administration of the fund;

   (b)  to delegate to any third party any aspect of the management and
        administration of the fund;

   (c)  to institute such proceedings and conduct such proceedings as it may
        consider necessary or appropriate for the due management and
        administration of the fund (including but not limited to the taking of
        proceedings to recover contributions due to the fund or any other
        payment payable in accordance with the terms of the
        Professional Indemnity Scheme or the
        Professional Indemnity Insurance Scheme from every principal liable to
        pay the same or from the firm in which he was a principal when the
        amount becomes or became due and payable) in its own name or (subject
        to prior consent of the Society) in the name of the Society; (L.N. 111
        of 1992)

   (d)  to disburse or reimburse out of the fund all administrative and legal
        and other costs, overheads, fees and other expenses and liabilities
        incurred in respect of the fund, including without prejudice to the
        generality of the foregoing any such costs, overheads, fees and other
        expenses and liabilities incurred by the Society in respect of the
        establishment or maintenance, or the management, administration or
        protection, of the fund.

4. Use of information and documents

Without prejudice to rule 18, and rule 11 of the former Rules, information and
documents obtained by the Company about any particular Practice or member
thereof in the course of investigating and handling any claim made or
intimated or any circumstances notified as is mentioned in rule 10(1) or in
paragraph 1(1) of the Schedule to the former Rules may be used by the Company
for the purpose of preparation of general records, statistics, reports and
recommendations (not identifying the particular Practice or member) for or to
the Society, but shall not otherwise be disclosed or available to the Society
without prior consent of the Practice (or any successor Practice thereto) or
the member concerned. (L.N. 111 of 1992) (Enacted 1989)