New Ruling Made Under Section 57(a) of the Legal Profession Act 1976: Moneylending Prohibited

To Members of the Malaysian Bar

New Ruling Made Under Section 57(a) of the Legal Profession Act 1976:
Moneylending Prohibited

Pursuant to section 57(a) of the Legal Profession Act 1976, Bar Council, at its recent meeting, passed the following new ruling:

Bar Council Ruling 14.26 Moneylending Prohibited


It is conduct unbefitting of an advocate and solicitor to charge interest on monies expended on his client’s behalf or on monies advanced for his client’s use, save for disbursements expended or advanced specifically or solely for the transaction or matter for which such advocate and solicitor has been retained to act, and provided that an invoice has been issued by the advocate and solicitor for such disbursements and the client has defaulted for 30 days in the payment of such invoice. It is also conduct unbefitting of an advocate and solicitor to engage or be involved, whether directly or indirectly, in the business of moneylending.

The rationale for the abovementioned ruling is as follows:

It is incompatible with the dignity and propriety of the legal profession for an advocate and solicitor to advance monies with interest, except in respect of disbursements expended or advanced by the advocate and solicitor solely for the transaction or matter which he or she has been retained to act, and provided that the advocate and solicitor has issued an invoice to his or her client for such disbursements and the client has failed to pay the invoice after 30 days. It is also incompatible with the dignity and propriety of the legal profession for an advocate and solicitor to engage or be involved in the business of moneylending.

Please be informed that the ruling will take effect immediately.

Please do not hesitate to contact Christina Gomez by telephone at 03-2050 2087 or by email at christina@malaysianbar.org.my, should you have any enquiries.

Thank you.

Tony Woon Yeow Thong
Secretary
Malaysian Bar