The Supreme Court has ruled that the Law Society exceeded the scope of its accounts regulations when an accountant appointed to inspect a Dublin solicitor’s practice was also instructed to investigate suspected bogus or fraudulent claims.
Mr Justice Francis D Murphy held that the function of an accountant appointed under Article 29 of the Solicitors’ Accounts Regulations 1984 was to establish whether a solicitor had complied with those accounting rules. It did not extend to investigating whether litigation handled by the solicitor was fraudulent.
Giles J Kennedy had practised from Eccles Street, Dublin, since 1981. In 1993, the Law Society’s Compensation Fund Committee decided to investigate his practice and Aishling Foley, a chartered accountant employed by the Society, was assigned to conduct the examination.
The Supreme Court accepted the High Court’s finding that Ms Foley had been given a two-part task. One element was to examine compliance with the accounts regulations. The other, which was not initially disclosed to Mr Kennedy, was to look for evidence of fraudulent claims passing through his practice.
The court found that the first purpose was lawful but the second was outside the powers conferred by the regulations. Mr Justice Murphy said the rules authorised investigation of solicitors’ accounts, not a wider inquiry into professional misconduct unrelated to compliance with those accounting requirements.
However, the court rejected two other challenges brought by Mr Kennedy. It held that Ms Foley was qualified to act as the investigating accountant and that the Compensation Fund Committee had authority to exercise the Law Society’s appointment power.
The ruling did not finally determine the consequences of the unlawful part of the investigation. The Supreme Court directed that the case be re-entered for further argument on whether Ms Foley’s appointment was wholly or only partly invalid and whether the Law Society could use information obtained during the investigation. The matter was then to return to the High Court to determine any damages and other remedies.