Explanations given by a suspended solicitor regarding deficits in client funds has made his position “even worse” and left many unanswered questions, the High Court president has said.
Mr Justice David Barniville this week made orders enabling the Law Society to take control of the client accounts, books and records of Ronan O’Brien & Co Solicitors, with a practice on Church Street, Cavan.
Ronan O’Brien has made “very serious admissions” effectively of dishonesty and now admits to all of the findings of a Law Society committee’s findings against him, the judge said.
“Perhaps one of the worst aspects” of the case is that during the investigation Mr O’Brien gave explanations to the Law Society for the whereabouts of money and in doing so implicated a third-party solicitor firm that was “wholly innocent”, Mr Justice Barniville added.
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The judge was “not at all satisfied” he has been given a full account of what happened to some of the client funds held by the O’Brien firm or the source of funds he used to plug deficits.
Last week he suspended Mr O’Brien from practising after hearing a Law Society committee found he had been dishonest in his practice as a solicitor and there was an apparent “significant” deficit in a client account.
The Law Society initiated its investigation last February after the Legal Services Regulatory Authority notified it of a complaint from a couple over €300,000 held by the firm as part of the sale of their property in Virginia, Co Cavan.
They alleged these sale proceeds had been with the office since July 2021 and had not been remitted to Start Mortgages, a financial institution that held a cross charge over another property they owned in Dublin, the court heard.
Law Society investigating accountant Stephanie Furey found a €38,482 balance on the couple’s client account as of January. An apparently unauthorised payment of €239,500 of the €300,000 sale proceeds was transferred from the client account to another solicitor firm in November 2022, she said in an affidavit.
Mr O’Brien said this was a part payment to Start Mortgages. However, he provided no supporting documentation to verify that this solicitor firm was acting for the financial institution and the file disclosed that Start Mortgages had provided its own bank details to facilitate an electronic transfer directly, added Ms Furey.
She found an overall apparent deficit of €245,650 in client funds held by the O’Brien company as of January 31st, 2024. She noted a €6,150 shortfall on a probate matter following an apparent payment from a client account to a litigation client last September.
Her investigation also uncovered a €105,000 transfer from a client account to the firm’s office account but this appeared on the client ledger as a payment to the client. The money had been held since December 2022 as part of a client’s acquisition of a property at Connelly Street, Cavan, from a receiver, she said.
Asked if the property acquisition was complete and to explain why the sum moved to the office account, Mr O’Brien allegedly said the purchase had not concluded and the funds were being held on the client’s behalf in escrow as part of a larger settlement with the receiver.
Ms Furey said Mr O’Brien did not provide vouching documentation for this explanation.
At an emergency meeting of the Law Society’s disciplinary committee, Mr O’Brien’s solicitor acknowledged that the €239,500 should not have been paid from the couple’s account to the other solicitor firm. Mr O’Brien’s representative confirmed the transfer had been made in respect of another client’s properties.
The committee was told Mr O’Brien claimed he paid €239,500 to Start Mortgages last month with money from the office account, which was “personal funds”.
This week, Mr Justice Barniville acceded to a request from barrister Eoghan O’Sullivan, for the Law Society, for the regulatory body to be allowed to take control of the records and accounts of the O’Brien company.
Mr O’Sullivan said Mr O’Brien has apologised for certain matters and for the first time accepts the couple’s funds were “misappropriated”. He said his client has received “scant information” regarding how Mr O’Brien claims to have funded the deficit reduction.
He added: “The society has no confidence in Mr O’Brien at all arising from various untruths that have been told.”
Jonathan Kilfeather SC, for Mr O’Brien, said the solicitor had consented to an order suspending him from practise. He argued it was unnecessary for the organisation to take control of the office accounts and records given these were now being handled by independent local solicitors who have undertaken to report anything untoward.
The judge was satisfied the Law Society should be put in charge of the matters. He said this was necessary to ensure client money is protected.
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