Solicitor repays €344,000 in ‘extortionate’ fees he paid himself from child’s estate

A solicitor who paid himself what an independent solicitor described as “extortionate” fees of €344,000 out of a child’s €454,840 estate has reimbursed that sum, the High Court has heard.

The €344,000 has been lodged in an account controlled by another independent solicitor pending further court order.

In addition to paying over the €344,000, Declan O’Callaghan, practising from Pound Street, Ballaghaderreen, Co Roscommon, has made proposals to the Law Society aimed at allowing him continue to practice under supervision of another solicitor, the president of the High Court was told on Friday.

The regulation of practice (RTP) committee of the Society will hear details of the proposals next week to decide if they are adequate or whether the Society should proceed with its application to suspend the solicitor from practice pending a hearing before the Solicitors Disciplinary Tribunal (SDT).

In the circumstances, Mr Justice Peter Kelly agreed on Friday, as sought by lawyers for the Society and Mr O'Callaghan, to adjourn the matter to early next month. An independent solicitor will be the sole signatory on the practice account in the interim.

Earlier, the judge noted the committee, having considered reports into the solicitor’s practice, resolved last March to refer him to the disciplinary tribunal for an inquiry into his conduct. It then, “rather unusually”, authorised the Society to apply for an order suspending him from practice and other reliefs.

When the case came before the court, proposals were put, including to pay a €94,000 shortfall and it was adjourned to facilitate that, he said. The court was now told Mr O’Callaghan has refunded all the monies drawn down by him by way of costs.

A report by an independent solicitor had raised concerns about total fees, plus VAT, of some €344,000 transferred by Mr O’Callaghan between 2014 and 2017 from an estate, whose sole beneficiary was a child, to his office account to pay fees, VAT and some minor outlay.

The child’s estate arose from the “untimely” death of his father before the child was born. Mr O’Callaghan was acting from 2014 on behalf of the dead man’s parents, with the consent of the child’s mother, the deceased’s partner.

Mr O’Callaghan had told the independent solicitor he believed he had instructions via the child’s grandparents to deduct the fees but now accepted that was a mistaken belief and the €344,000 payments were not lawfully authorised, the judge noted.

The independent solicitor’s report also raised “very serious questions” about the level of fees which the court had read about those fees with “increasing levels of disbelief” and considered them “disquieting”.

The report expressed concerns about timesheets kept and noted fees charged included €1,800 for sending a letter to counsel; €1,600 for receiving a letter from counsel and €2,000 for a consultation. The solicitor also charged some €8,000 for his time spent researching and drafting an issue he was not instructed to do.

Mr O’Callaghan had also told the ROP committee last March he had taken €50,000 in anticipation of litigation costs when, the report said, it was clear from the files there was no litigation.

The independent solicitor expressed the opinion the fees charged bore no relation to the work done on behalf of the estate to date and described them as “extortionate”.

Mr Justice Kelly said Mr O’Callaghan had in affidavits pointed out the report also said positive things said about him regarding his level of expertise and the work he did for the estate.

In the affidavits, the soicitor said he had conducted himself honestly at all times.

He also said he must now accept the independent solicitor’s opinion the fees charged were “excessive”.

The judge said suspension would have a detrimental effect, not just on the solicitor but would also jeopardise nine staff employed at the practice “who were not responsible at all for this unfortunate business”.

If a method of protection of the public could be found other than suspension, the court was open to that being explored but that was a matter for the ROP committee to decide in the first instance.

The administrator of the child’s estate was represented and was happy to continue in that role and do whatever was in the child’s best interests, which might include consideration of making him a ward of court, he also noted.