Five former clients who lent money to Dunedin lawyer John Milne have come forward to consider joining a recently launched "affected persons register".
Mr Milne, who is at the centre of a Serious Fraud Office investigation, is also, separately, yet to face several charges by the Law Society about taking loans from clients.
The Law Society's Otago branch is preparing charges at present and plans to prosecute him before the New Zealand Lawyers and Conveyancers Disciplinary Tribunal in coming months.
It appears eligibility for compensation will be at the heart of the matter for many clients.
The question is whether the clients had lent money to Mr Milne, or whether they were expecting returns from an investment, which could place them in a better position to seek some compensation from the Law Society's two fidelity funds.
Dunedin solicitor Alistair Paterson launched the affected persons register two weeks ago and yesterday confirmed five former clients had been in contact.
Three had formally signed up to join the register and all had supplied paperwork on the loans - all of which were confidential, Mr Paterson said.
It was made public in mid-July that Mr Milne had ceased employment with Craig Paddon Law and that unknown to the firm he had borrowed "significant sums" of clients' money over many years, in contravention of Law Society rules.
Initially, it was thought the loans totalled only hundreds of thousands of dollars relating to a small number of clients, but that grew to about $2 million, with some industry speculation now that there could be as much as $3.8 million involved from more than 35 clients.
It was understood one client alone had exposure of more than $1 million.
The register would collectively look at issues including the clients' rights, their tax positions with IRD, whether they would consider contributing to a joint action against Mr Milne, take action against Mr Milne's former employer or potentially make a claim against the Law Society's fidelity funds.
One source close to the issue, who did not want to be identified, expected some clients would be embarrassed to join the register, others might have already written off the loans as being relatively small compared to their personal wealth, while some might prefer their tax positions not be challenged.
