Former clients of disgraced Dunedin lawyer John Milne have been granted a time extension, should they decide to lodge a claim with the New Zealand Law Society for their share of almost $3 million of missing funds.
Dunedin lawyer Alistair Paterson has been contacted by nine of the original 35 investors who, over many years, lost a total $2.86 million they had given Milne.
Milne (77), who declared himself bankrupt last year, has since been disbarred and in April was found guilty by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal on four counts of misconduct.
Over a period of about 20 years, Milne received $2.86 million from clients, many of them friends and acquaintances. The amounts ranged from about $10,000 to almost $1 million.
On the question of future compensation claims against the Law Society's two fidelity funds, it depends whether Milne took money from clients to invest on their behalf, or took the money as a personal loan.
In general, claims on the Law Society's fidelity funds must be made within a year. Investigations into Milne were long-running and the year was up this month.
However, Mr Paterson said the Law Society had recently granted an application for a time extension, albeit unspecified other than as a ''reasonable time'', for the group to complete inquiries and possibly lodge a claim.
Law Society solicitors Fidelity Guarantee Fund and Lawyers Fidelity Fund secretary Robin Turner said each individual claim would be considered on its merits, including timing, and the society would not impose a ''strict 12-month limitation from 4 July 2012''.
''However, the [Law] Society cannot be expected to permit the process of receiving claims to drift on indefinitely,'' he said.
Mr Paterson said yesterday the group of nine was clubbing together to finance inquiries, with a Dunedin barrister looking into the possibility of a group compensation claim. Being bankrupt, Milne has no assets to claim against and is a superannuitant.
Evidence in the April disciplinary tribunal included that Milne had never received interest on the money he received from clients, only ''personal use'' of the funds showing from his personal bank accounts, and any repayment by Milne was ''not likely''.
