Ballaghaderreen solicitor’s account deficit may exceed €500,000

The president of the High Court has said there is "nothing satisfactory at all" surrounding the situation of a suspended Co Roscommon solicitor under continuing investigation by the Law Society.

Mr Justice Peter Kelly made the comment after being told of concerns that the deficit on the client account of Declan O’Callaghan’s practice in Ballaghaderreen may exceed €500,000.

He also heard that Mr O’Callaghan, who was ordered on November 5th last to pay €144,000 within 48 hours towards reducing the deficit, has not yet done so and is still seeking a loan in that sum.

Pending any such repayment, the €144,000 has to be added to an existing identified deficit of €212,000, the judge noted.

There were also concerns whether a further €150,000, representing a sum which a client maintained she had not received under a settlement, would have to be added on, making a total potential deficit of more than €500,000.

The court heard investigations are continuing into those and a range of issues relating to other clients of Mr O’Callaghan.

Personal funds

The solicitor, who had practiced at Kilraine O’Callaghan, Pound Street, Ballaghaderreen, has undertaken to discharge from personal funds whatever sum the deficit on the client account amounts to.

When the case was before the court earlier this month, Nessa Bird BL, for the Law Society, said the solicitor had lodged €395,000 to address the deficit but a cheque for €144,000 of that had bounced, due to an issue with the lender.

Ms Bird also said Brendan Steen, a solicitor appointed with Aoife O'Callaghan, also a solicitor and a daughter of Mr O'Callaghan, as a joint manager of the practice, had identified it would be necessary to repay some €212,000 to the client account on top of funds already paid.

The judge made orders at that November 5th hearing, including requiring the €144,000 be lodged within 48 hours. When the matter returned for mention on Monday, Ms Bird said the €144,000 remained unpaid.

Counsel said further investigations had been carried out and Mr O’Callaghan had attended before the Society’s Regulation of Practice Committee (RPC) when various matters were discussed in detail with him. Mr Steen and Eimear O’Callaghan, another daughter of Mr O’Callaghan and also a solicitor, also attended that meeting.

Ms Bird said there was reference to a client who has said she had not received €150,000 out of a settlement. The records of the practice appear to record the money was paid out to the client but she insists they were not, counsel said.

Adjournment

The RPC had asked Mr Steen and the investigating accountant to make contact with the client about that. Counsel sought an adjournment as the RPC is meeting again in early December to consider a further report from an investigating accountant and see whether the deficit will be cleared.

Gabriel Gavigan SC, for Mr O'Callaghan, said his client had been unable to pay the €144,000 so because, as a result of media reports, the relevant lender was not willing to advance that sum.

Another lender has agreed in principle to advance the funds and Mr O’Callaghan hopes he will be able to comply with the order, counsel said.

Mr O’Callaghan had said the €150,000 issue concerned a client who was being pursued by a debtor, that matter would be resolved in her favour shortly and there would not be a claim about that money, counsel added.

Mr Gavigan said other investigations will have to be dealt within time but the €144,000 issue, and the €150,000 claim, were the “most pressing” as of now.

In his ruling, Mr Justice Kelly said it was “very disquieting”, despite previous orders of the court, the €144,000 is still not lodged. While Mr O’Callaghan believed he had identified another lender, that “remains to be seen”.

Other matters in the investigating accountant’s report suggested the deficit may rise and such matters, including alleged overstating of costs concerning identified clients, will have to be addressed in the continuing investigation, the judge added: “This is not a satisfactory situation. In fact, nothing about this is satisfactory.”

He said he would adjourn the matter to December 19th and directed the €144,000 be lodged. Mr O’Callaghan agreed last July to several orders, including not to practice as a solicitor, pending the outcome of an inquiry by the Solicitors Disciplinary Tribunal (SDT) into his conduct.

He was also to pay €350,000 from his personal funds to the client account of Kilraine O’Callaghan Solicitors; to cease his involvement with that firm and to make good any potential additional deficit after various identified client files are finalised.