Risk managementThey won't give it back!When solicitors send money to the wrong person and then ask for it back, they are often told: 'I've spent it'.The strange thing is that the solicitor often seems surprised.
How does this happen? Here are some typical scenarios.A solicitor acting in the administration of the estate sent a cheque to one of the beneficiaries for 10,000 instead of 1,000.
The mistake was only uncovered when the final estate accounts were prepared some two months later.
The solicitor immediately sent out a letter requesting that the 9,000 be returned.
Three weeks later the beneficiary replied:'Sorry for the delay - I was in the Seychelles.
I thought I was entitled to the money.
It's all gone'.A man instructed his solicitor in the course of his divorce that his share of the sale proceeds from the former matrimonial home should be invested for his four children and paid to them, in equal shares, when they reached the age of 18.
When the day came the eldest contacted the solicitors and 'asked for the money', which was in a building society account.
Unfortunately, the solicitor who had dealt with the matter was away.
Her colleague closed the account and paid the total sum of 20,000 to the eldest child.The error came to light 18 months later when the next child approached the firm and asked for his entitlement.
The children had no idea where their elder sister was.
No one had seen or spoken to her for three years.Disposal of sale proceeds is an old favourite.
A property was held by tenants in common and the solicitor paid the money to the two clients in equal shares.
The next day one of them telephoned:'My ex-boyfriend is only entitled to 10% of the sale proceeds ...
you have sent him too much ...
no, I don't know where he is...
no, I am not going to try and trace him...
I never want to see him again...
where is my money?'And yes, it still happens.
A solicitor sends the entire sale proceeds to one co-owner on that person's instructions, only to receive an enquiry from the other co-owner.
'Where is my 28,000? My ex-husband? He is in Spain with that new girlfriend'.It may sometimes be possible to effect recovery in law, but what use is that if the individual has no funds? Always ensure:l Cheques are drawn for the correct amount and in favour of the right person;l Cash statements are agreed by all the intended recipients before distribution;l If any cheques are drawn on your files in your absence, that there are clear instructions for thefee-earner who is looking after your work;l Money is only paid to those entitled to receive it unless you have a signed written authority to the contrary.
Beware of fraud in such cases.l This column was prepared by the St.
Paul risk management team
No comments yet