I have now received a letter from the solicitor, who admits the error and is demanding payment of the difference (€4,000). Given that his original invoice was paid and that it was his error, am I legally obliged to pay him the outstanding costs?
DF, Co Galway
Usually, at the beginning of any transaction involving a sale or purchase of a property, the client agrees the terms of business with the solicitor. This is known as a section 68 agreement and is a statutory requirement. The agreement should outline the solicitor fees and the way in which he proposes to charge them. It also contains details of other fees and expenses likely to arise, including the estate agent’s fees. Normally, these figures are taken into account on completion and applied to the funds in hand. Generally it is a simple case of money-in, money-out, with the balance going to the client.
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Complications arise when the estate agent accepts a booking deposit and the solicitor fails to make the necessary adjustment to his cash account. The Law Society’s general conditions of sale make no provision for booking deposits and the solicitor acting for the vendor is assumed to hold the entire deposit. He is legally accountable. Therefore, when the estate agent independently settles his account with the vendor, ignoring the solicitor, it places the onus on the solicitor to pick up on this. While the mistake is an innocent one, it can become problematic for the client if it is not rectified immediately.
It could be argued that you benefited from the mistake and probably had a duty to report it. However, the solicitor also has a fiduciary duty to the client and he may have been negligent in allowing 10 months to pass before noticing the error. A solution would be for the money to be returned, with a negotiated allowance for the inconvenience caused to you.
Justin McKenna is managing partner at Partners at Law Solicitors, 8 Adelaide Street, Dun Laoghaire, Co Dublin
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