Conduct and service

Settlements made at courtCasual observers may be forgiven for being amazed by the number of complaints to the Office for the Supervision of Solicitors that involve errors on completion statements following conveyancing transactions.

Nearly all such errors involve solicitors having overpaid the client after completion.

Sometimes surprisingly large amounts are involved.

The solicitor, usually many months later, has written to the client asking for repayment.This raises many questions, particularly about the adequacy of solicitors' monthly reconciliations, or even whether any are done.

The pattern of such matters is usually that for one reason or another the solicitor sends a settlement cheque to the client for a sum much greater than that due.

Then, some considerable time later, sometimes more than a year, the mistake is realised and the solicitor writes to the client asking for the excess to be repaid.By then, the client has probably spent what was, in some cases, an unexpected windfall.

He is highly indignant and protests volubly.The solicitor's usual response is to say that the client must have realised that he was getting back more than he expected.

He therefore must have known something was wrong and should have checked.

It has even been known for solicitors to protest that because the client was an accountant it was, in essence, as much his fault as anyone else's.The OSS is not impressed by such protestations.

Whether or not the client is an accountant, it is the solicitor's job to ensure that his accounting is correct.

The client is entitled to assume that it is correct.The situation was highlighted in a case that involved an error amounting to 4,000, which remained undiscovered for five months.

In that case the error arose because the mortgagee gave one (incorrect) figure for the redemption of the mortgage over the phone and another, the correct one, for 4,000 more in a confirmatory letter.

The solicitors drew their completion statement before the letter arrived, thus using the incorrect figure, but, in repaying the mortgage, used the written figure, without noticing the difference.

It was only when they were about to archive their file and checked it against their ledger that the deficiency was noticed.The client was outraged and complained.

The solicitors sued for the money they were owed.

Technically the overpayment was a breach of the Solicitors Accounts Rules, but this point was not taken.

The solicitors were, however, ordered to pay compensation.

The moral is clear - always check your client account ledger as soon as possible after completion!l Every case before the compliance and supervision committee is decided on its individual facts.

These case studies are for illustration only and should not be treated as precedents.