Bloxham and solicitors fail to strike deal on bond
SETTLEMENT talks have broken down between Bloxham Stockbrokers and the country's main insurance body for solicitors after the value of an investment bond fell by 97pc.
Bloxham is being sued for more than €10m by investors including the Solicitors Mutual Defence Fund (SMDF), which provides professional practice insurance cover for solicitors and has 3,500 members.
The insurer had invested one-third of its investment portfolio in a "guaranteed" bond the collapse of which, it claimed, led to difficulties in indemnifying solicitors.
The SMDF has alleged that it received negligent advice by Bloxham about investing in the bond and issued High Court proceedings against the Dublin-based firm last year.
Bloxham is also being sued by LK Shields Solicitors and the two cases were adjourned to facilitate potential settlement talks between the parties.
However, High Court Judge Mr Justice Peter Kelly was told earlier this week that the mediation had been unsuccessful and that both cases will now go to full trial next February.
In the SMDF action, the insurer claims that its ability to indemnify lawyers had been affected by more than €8m losses suffered after the bond's value fell.
The losses led to the Law Society, the regulatory body for solicitors, guaranteeing €8.4m in loans for the SMDF.
The unprecedented guarantee was provided in October 2009 after the collapse in value of the SMDF's Saturn Bond investment.
The SMDF, which reported a deficit of €15.9m for 2009, claimed it would be unable to offer insurance for 2010 unless such a guarantee was provided.