Costs awarded under the Compensation Fund Scheme
Under of the Solicitors (Amendment) Act 1960, as substituted by of the Solicitors (Amendment) Act 1994 and amended by of the Solicitors (Amendment) Act 2002, certain costs are allowable to a claimant as part of a grant under the statutory scheme of the compensation fund.
The Regulation of Practice Committee wishes to set out that the only context in which the payment of a claimant’s second solicitor’s fees arises is in a situation where a claimant paid fees to a first solicitor for work that was not completed due to this first solicitor’s dishonesty. Since these fees are a direct loss to the claimant, and have arisen as a result of the first solicitor’s dishonestly, these fees are recoverable under the scheme.
If the second solicitor had to finalise the stamping of deeds, the registration of title, and the certification of title for lenders, and the need for this work arose directly from the dishonesty of the first solicitor, the Law Society would usually pay a fee of up to €750 plus VAT plus outlay already discharged for claims received after 1 January 2017.
Under the statutory scheme, there is no provision to allow the Law Society to pay or discharge in whole, or in part, the claimant’s solicitor’s legal costs relating to the making of an application for a grant or any work associated with this application.
For the avoidance of doubt, the compensation fund does not cover the legal fees incurred by a claimant in the preparation and submission of a claim on the compensation fund. Thus, the legal costs incurred by a claimant in retaining a solicitor to make a claim on the compensation fund is a matter to be agreed between the claimant and the solicitor in the ordinary course of business.