Under the Solicitors Acts 1954 to 2011 the Law Society is currently the designated authority responsible for the regulation of the solicitors' profession in the State and members of the public can make complaints about solicitors to the Society, as the statutory regulator, under this framework. As part of that function, particularly under Part IV of the Solicitors (Amendment) Act 1994 dealing with the 'Protection of Clients', the Law Society is obliged to continue to maintain and administer the Solicitors Compensation Fund. Where it is proved to the satisfaction of the Law Society that any client of a solicitor has sustained loss in consequence of fraud or dishonesty on the part of that solicitor or any clerk or servant of that solicitor arising from that solicitor's practice as a solicitor within the jurisdiction of the State, then, subject to the relevant provisions, the Society is required to make a grant to that client out of the Compensation Fund. It is also provided that before a practising certificate can be issued to a solicitor, the solicitor in question must have paid the annual contribution to the Fund and the issuing of a practising certificate can be withheld until the payment has been made.
As such, the Compensation Fund and its attendant inspection procedures provide an important protection against acts of fraud and dishonesty that may be perpetrated by solicitors in the handling of clients’ monies. As Deputies will be aware, the Fund has been relied upon in a number of high profile cases in recent times. In the five years of 2008 to 2012, I am advised the Fund paid out a total of €17.7 million in claims. The total in claims actually made for that same period was nearly €48 million. There was a 9% increase in the 266 claims made against the Compensation Fund in 2012 over the previous year's 244 claims though this remains much less than the peak of 672 claims received in 2008. The net assets of the Solicitors Compensation Fund were valued at €18 million as at 30th June 2013. In the six months up to that date 165 claims on the Fund were received which, excluding invalid claims refused, amounted to €1.16 million. The annual contribution to the Fund for 2013 is €760 per solicitor. Annual insurance cover for €50 million with an excess of €5 million is also in place.
Under the Compensation Fund structures provided for under the Solicitors Acts, the Law Society is, therefore, able to respond immediately to serious financial complaints and has the right to carry out investigations, without notification, where justified by the circumstances. The Society can also apply to the High Court for orders to protect clients' funds when serious irregularities arise. Pay-outs by the Compensation Fund have a serious impact, including in terms of ongoing costs, across its entire solicitor membership. To that extent, the Fund has a capacity to strongly incentivise financial compliance by solicitors in the public interest. It should also be borne in mind that, following the enactment of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, the Law Society is required to investigate compliance with anti-laundering regulations.
It should also be noted that under the new Legal Services Regulation Bill which is to commence Report Stage in the Dáil on 17 July, matters of misconduct or discipline relating to solicitors or barristers will be dealt with under the aegis of the new and independent Legal Services Regulatory Authority and the Legal Practitioners' Disciplinary Tribunal and that members of the public will no longer make such complaints through the legal professional bodies.