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A claim on the Law Society Compensation Fund must be received by the Society within six months of the loss coming to the attention of the claimant. 

The (SI 442/2013) came into operation on 1 December 2013.

The new regulations replace provisions of the Solicitors (Compensation Fund) Regulations 1963 (SI 115/1963) relating to the time limits for making what are commonly called claims on the Law Society’s Compensation Fund (or to use the statutory terminology, applications for grants from the compensation fund), and the form in which an application is made.

The regulations now provide that an application for a grant is made by way of a single claim form, in place of two claim forms (CF.1 and CF.2) that were previously required.

The new compensation fund can be obtained from the ‘consumer interest’ section in the public area of the Society’s website.

The regulations provide that an application must be received by the Law Society within six months of the loss for which the claim is made coming to the attention of the claimant.

Previously, a CF.1 form had to be submitted within three months of a claimant becoming aware of his or her loss.

Upon an application being made, the Law Society’s Regulation of Practice Committee may extend the six-month time limit where it deems there to be exceptional circumstances that merit an extension being granted.

Solicitors acting for intending claimants are recommended to place no reliance on the discretion to extend the time limit. If an application is made after the expiry of the time limit, and the Regulation of Practice Committee is of the opinion that there are not exceptional circumstances that merit an extension, then the claim will not be accepted, even if it is otherwise valid.

The Regulation of Practice Committee will deem the time at which the claimant became aware of his or her loss to be the time at which the claimant became aware that a loss had been sustained, even if there is uncertainty as to its quantification or the loss has not yet fully crystallised. If it is not possible to fully quantify a loss at the time the Law Society is notified of a claim, this should be stated in the claim form and complete details of the loss should be provided when they are known.

Particular attention is drawn to the time limit of six months to make a claim on the compensation fund, which will be strictly enforced. Failure to make a claim within the time limit on behalf of a client may put professional indemnity insurance at risk, as professional indemnity insurance will then be the only source of redress for the client because they will no longer be able to make a claim on the compensation fund. Solicitors are strongly advised to ensure that claims are made in a timely manner in the interests of clients and to protect solicitors from claims against professional indemnity insurance. To sum up, there is a risk that a claim based on the dishonesty of a client’s former solicitor could become a claim based on the negligence of the client’s new solicitor.

There is an obligation on solicitors, not the Law Society, to regularly ensure that they are familiar with the rules of the compensation fund. Reference may be made to the explanatory booklet Guide to Claiming Refunds of Money Paid to a Solicitor and to the legislation in both section 21 of the Solicitors Act 1960, as substituted by section 29 of the Solicitors (Amendment) Act 1994 and amended by section 16 of the Solicitors (Amendment) Act 2002 and the Solicitors (Compensation Fund) Regulations 2013 (SI 442/2013). All these sources can be accessed at the Compensation Fund section of the site.

John Elliot, Registrar of Solicitors and Director of Regulation