€3.67m paid to victims of rogue solicitors
Published 05/01/2016 | 02:30
The amount paid out in claims by the Law Society to compensate clients of rogue solicitors soared by 29pc to €3.67m in 2014.
The Law Society has a compensation fund to deal with people left out of pocket by defaulting solicitors.
Between 2009 and 2014, the fund paid out €23.35m in claims. The most high-profile case to come before the fund in recent years was that of solicitor Michael Lynn.
Mr Lynn cost his fellow professionals almost €2.6m in compensation payouts, with an additional €2.1m recovered from Mr Lynn's client accounts.
The overall €3.67m paid out by the fund in 2014 compared to €2.85m in 2013, but dropped from €4.3m in 2012 and €3.69m in 2011.
At the end of 2014, the fund's accounts show it had €23m in financial assets and the director general of the Law Society, Ken Murphy, yesterday revealed the highest single amount paid out in 2014 was €205,000.
In 2014, each solicitor taking out a practice certificate paid €760 into the compensation fund, totalling €6.81m.
Mr Murphy said: "While provision for claims increased by €870,590, there was an increase in recoveries from defaulting solicitors of €1,182,615."
The figures show the amount recovered from defaulting solicitors totalled €1.68m compared to €499,303 in 2013.
Mr Murphy pointed out that the net cost of claims after recoveries was €2.149m in 2014 as compared to €2.461m in 2013 - a reduction of €312,025.
"It is normal for both provision for claims and recoveries from defaulting solicitors to fluctuate from year to year.
"No special significance should be attached to this," he said.
The fund enjoyed a bumper year in its return on investments, which increased from €686,811 to €2.2m.
Overall, the fund's income in 2014 increased by 37pc, going from €7.9m to €10.83m.
The fund's expenditure increased by €683,567 or 8pc, going from €8.23m to €8.92m.
The spend includes the €3.8m paid out in claims; €2.2m in administration costs; €1m in Law Society overheads; €644,499 in practice closure administration costs and €350,478 in legal and other professional fees.
Staff costs at the fund totalled €2.54m in 2014.
As a result mainly of the fund's investment income increasing, the fund recorded a surplus in 2014 of €1.9m compared to a loss of €336,560 in 2013.
"The surplus for 2014 reflects the prudent investment policies of the Compensation Fund together with a stringent oversight of all costs associated with the maintenance of the fund and administration of the regulation of the profession," Mr Murphy added.