The correct form of solicitor lawyer certificate for direct borrowers guarantors for bank loans
The Legal Profession Legal Practice (Solicitors) Rules 2015 (Rules) rule 11.3 says that Solicitors must use the LIV form of solicitor’s certificate.
Only the forms approved by the Law Institute of Victoria will be used. The solicitor’s certificate package was launched in consultation with the Australian Banking Association (ABA). https://lplc.com.au/resources/practice-risk-guides/managing-mortgage-risk
Rule 11 of the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 requires use of various forms referred to in that rule when Australian legal practitioners explain security documents to borrowers and guarantors, as follows:
- Law Institute of Victoria Australian Legal Practitioner’s Certificate 1 (Schedule 1) (PDF) Client is the direct borrower or is a security provider referred to in the documents as the borrower.
- Law Institute of Victoria Australian Legal Practitioner’s Certificate 2 (Schedule 2) (PDF) where the client is a third-party guarantor, surety mortgagor or indemnifier for the principal borrower.
- Law Institute of Victoria Certificate by Translator/Interpreter (Schedule 3) (PDF)
- Law Institute of Victoria Form of Acknowledgement given by a Borrower or Surety to the Certifying Australian Legal Practitioner (Schedule 4) (PDF).
Verification of identity (VOI) - Require face to face verification
Verifying identity when giving a solicitors certificate needs to be done face-to-face in person and the recent ARNECC notice does not change that because:
- rule 11 of the Legal Profession Legal Practice (Solicitors) Rules 2015 (Rules) governs how evidence is to be given of any advice you gave a borrower or guarantor
- rule 11.2 of the Rules says you need to verify your client’s identity by using the VOI Standard in schedule 8 of Model Participation Rules, which requires you to do face-to-face VOI
- rule 11.3 says you must use the LIV form of solicitors certificate and that certificate says you verified the identity of the person in accordance with rule 11.2.
If the VOI can’t be done face-to-face, the solicitor should not sign the solicitor’s certificate. However, there is nothing stopping the solicitor from giving advice to a guarantor or borrower via video conferencing about their obligations as a borrower or guarantor.
An acknowledgement signed by the client that they received the advice from the solicitor may satisfy the lender in lieu of a solicitors certificate.
If the lender insists on a solicitors certificate the solicitor should refer them to rule 11.8 which prohibits a solicitor, such as a solicitor acting for the lender, from aiding, abetting, counselling or procuring another solicitor to breach rule 11. Section 39 of the Uniform Law also makes it an offence for anyone, and this would include a lender, to induce a law practice or practitioner to breach the Uniform Law or any rules.
Please email clear copies of your Passport and Driving Licence (both sides) for us to undertake a Verification of Identity (VOI) and bring the same original documents when you attend to undertake a physical identification.
Fee Estimation Starts from 440 Aud (the exact amount will depend on the matter)
We will provide a quote once we assess the full set of loan documents.
The potential monetary risk of providing the solicitor lawyer certificate for direct borrowers guarantors for bank loans by a lawyer is equal to the amount of loan or money being borrowed, or alternatively being guaranteed in the transaction plus interest and recovery costs.
Lawyers need to bear the cost of archiving all the documents for more than the duration of the loan - Solicitor Lawyer Certificate Australian Legal Practitioner Certificate for bank loans for borrowers or guarantors.
| Usual fee estimation (one person) | 440Aud (approximately) (for *high risk person: 550Aud)*examples of high-risk situations
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| Additional person: | 220Aud (for *high risk Additional person: 220Aud)*if the additional person is older (than 60 yrs.) ,if the mother tongue is not English and based on the type of relationship e.g.: spouses or parents and children due to potential risk of pressure or potential undue influence ) |
| Additional fee | 110Aud If there is a trust structure |
| Business trust structure [must have a trust deed] | 220Aud |
| If required to witness documents other than providing the certificate: | 110Aud |
Why might you need a solicitor’s certificate
[Solicitor lawyer certificate for direct borrowers guarantors for bank loans or Australian Legal Practitioner Certificate for bank loans for borrowers or guarantors]
- You are borrowing funds that are repayable upon your death
- You wish to be a guarantor of a loan
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- Some guarantors have been able to avoid their obligations under a guarantee as a result of, for example, claiming that they did not know what they were signing, or that they were forced to sign a guarantee. As a result, many lenders now require guarantors to obtain independent legal advice and a solicitor’s certificate, or a solicitor to act for and be the witness of the guarantor.
- Some lenders now offer loans to older citizens which are only repayable upon the death of the borrower, the sale of the property over which the loan is secured, or in other limited circumstances. Such lenders may require the borrower to obtain a solicitor’s certificate of independent legal advice prior to advancing the funds.
High Court of Australia – Commercial Bank of Australia -v- Amadio and Anor [1983]
![Australia – Commercial Bank of Australia -v- Amadio and Anor [1983]](https://dlegal.com.au/wp-content/uploads/2023/07/Australia-–-Commercial-Bank-of-Australia-v-Amadio-and-Anor-1983.jpg "Australia – Commercial Bank of Australia -v- Amadio and Anor [1983]")
Many clients, guarantors and banks have got into trouble and incurred considerable costs. High Court Of Australia – Commercial Bank of Australia -v- Amadio and Anor [1983]
In this landmark case, the High Court held that an overdraft facility should be set aside.
The High Court of Australia found that the banks conduct in obtaining execution of the mortgage and guarantee was unconscionable. Many solicitors have been sued by both security providers and lenders in respect of the advice given or the lack of it. Such claims are known as Amadio claims.
The duty of the lawyer to advice on items in the bank contract including terms and conditions should not be taken lightly. Many banks will tell you that you just need to witness your signature by a lawyer! In fact, what is required is not only to advice the client on the contract from the bank but also to provide a lawyer’s certificate that proper advice has been given.
We will ask you to complete a capture sheet with your personal and business contact details and similar details for other parties involved in the matter. We need this information to maintain the integrity of our records protect you and the public generally against the possibility of fraud and to ensure that we do not have a conflict of interest that would preclude us from acting for you.