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Solicitors clients accounts being held by escrow services

  • 19-09-2013 9:51pm
    #1
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,549 Mod ✭✭✭✭


    Would it be possible for solicitors to have client funds held exclusively in escrow accounts by a third party, other than say outlay and retainer fees?

    It seems to me that the big difficulties in terms of insurance and complaints do not come from actual professional negligence in legal advice but from client account shortfalls and conveyancing. If a solicitor could get rid of the ability to handle client monies and chose not to do conveyancing, could they get their insurance premium down to a more manageable figure?


Comments

  • #2
    Victor
    Registered Users, Registered Users 2 Posts: 78,575 ✭✭✭✭Victor


    Can we trust the escrow service? :)

    On balance, I suppose we could, if there was a dedicated organisation, possibly associated with - but at arms length from - a bank, such that the escrow funds aren't affected by what happens at the bank.

    Using a dedicated, larger organisation should be less risky than a standalone solicitor with a costs / debt / gambling / substance abuse problem.


  • #3
    Grolschevik
    Registered Users, Registered Users 2 Posts: 3,472 ✭✭✭Grolschevik


    I believe a review of the accounts regulations is in the offing, so you never know what might be considered.


  • #4
    LegalEagle3
    Registered Users, Registered Users 2 Posts: 1 ✭LegalEagle3


    johnnyskeleton wrote: »
    Would it be possible for solicitors to have client funds held exclusively in escrow accounts by a third party, other than say outlay and retainer fees?

    It seems to me that the big difficulties in terms of insurance and complaints do not come from actual professional negligence in legal advice but from client account shortfalls and conveyancing. If a solicitor could get rid of the ability to handle client monies and chose not to do conveyancing, could they get their insurance premium down to a more manageable figure?

    Interestingly enough, in the UK barristers have historically always been forbidden from holding client money.

    In the past year, the UK Bar Council has created an escrow company to mitigate this problem.
    So what you suggest is already happening in the UK, albeit with barristers.

    Europe's leading escrow company is also based in the UK, and offers its services to both solicitors and barristers, just as you envisage.
    It also offers and is heavily used for Euro denominated transactions, and additionally has an Irish based bank account for its users.

    The Bar Council's escrow company is registered with the Financial Conduct Authority (FCA) in the UK, whilst the other escrow company is authorised by the FCA as a Payment Service Provider - a higher level of regulation (the highest).

    You will need to decide whether those who already use these established services are safe to do so, and whether you wish to join them, but the facility is already available and in use.


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