Under section 50 of the Solicitors Act 1954, adjudication in bankruptcy of a solicitor operates to immediately and automatically suspend his or her practising certificate (if any) until:

a)        The practising certificate expires,

b)       The adjudication in bankruptcy is annulled and an office copy of the order annulling the adjudication is served on the Registrar of Solicitors, or

c)        The suspension is terminated under section 51 of the Solicitors Act 1954, whichever first occurs.

A solicitor whose practising certificate has been suspended by virtue of section 50 may, in accordance with section 51 of the Solicitors Act 1954, at any time before the certificate expires and the adjudication in bankruptcy is annulled, apply to the Society to terminate the suspension. The Society may terminate the suspension unconditionally or subject to such terms and conditions as the Society thinks fit, or refuse the application.

Where the Society refuses such an application or terminates the suspension subject to any terms and conditions, the solicitor may appeal to the President of the High Court.

Where a solicitor has been adjudicated bankrupt and then applies for a practising certificate, the Society may issue the solicitor with an unrestricted practising certificate, a practising certificate subject to specified conditions, or refuse to issue the solicitor with a practising certificate, in accordance with the provisions of section 49 of the Solicitors Act 1954, as substituted by section 61 of the Solicitors (Amendment) Act 1994, as amended by section 2 of the Solicitors (Amendment) Act 2002. The solicitor also has the right to appeal the decision of the Society to the President of the High Court under this section.

Solicitors who are faced with the prospect of bankruptcy should prepare a wind-down plan and contact the Society regarding the cessation obligations, which include, but are not limited to:

a)    Divesting of client files,

b)    Submitting a closing reporting accountant’s report,

c)    Contacting the special purpose fund manager and dealing with requirements relating to run-off cover from the Run-off Fund, and

d)   Providing an address for the purpose of future correspondence.

Useful guidance in relation to cessation obligations and run-off cover can be found in the ‘closing a practice’ section in the members’ area of the Society’s website (www.lawsociety.ie/Pages/PII/Run-off-Cover/).

The provisions of the professional indemnity insurance regulations pertaining to run-off cover apply to firms that have ceased to carry on practice as a result of its principal or all its partners becoming bankrupt in the same way as to any other firm that has ceased to carry on practice.

By reason that a third party will be dealing with the clients’ affairs, the solicitor must ensure that the books of account of the practice, in particular the client and office ledgers, are completely up to date and that recent transactions are recorded in these ledgers.

Judgments

Where a solicitor has a registered or unregistered judgment against them, they should immediately notify the Society in writing and include the following information:

a)       A list of all judgments against the solicitor, including those registered and unregistered,

b)       Details of the circumstances leading to the judgments,

c)       Confirmation as to whether each judgment has been satisfied or remains outstanding,

d)      In the case of satisfied judgments, documentary evidence of the satisfaction of the judgments,

e)       In the case of unsatisfied judgments, the solicitor should provide details as to how he or she proposes to now satisfy the judgment or appeal the judgment, and

f)        In the case of a judgment in relation to which the solicitor is entitled, as respects the whole effect of the judgment on him or her, to indemnity or relief from any other person, documentary evidence of this indemnity or relief.

The Society reserves the right to require a solicitor with unsatisfied judgments against them to appear before a regulatory committee at any time regarding these matters.

Where a solicitor with unsatisfied judgments is applying for a practising certificate, the Society may issue an unrestricted practising certificate, a practising certificate subject to specified conditions, or refuse to issue a practising certificate, in accordance with the provisions of section 49 of the Solicitors Act 1954, as substituted by section 61 of the Solicitors (Amendment) Act 1994, as amended by section 2 of the Solicitors (Amendment) Act 2002. The solicitor has a right of appeal to the President of the High Court under the same section. 

Where a solicitor with unsatisfied judgments already holds a current practising certificate, the Society may impose conditions on the solicitor’s practising certificate, in accordance with the provisions of section 59 of the Solicitors (Amendment) Act 1994. The solicitor has a right of appeal to the President of the High Court under this section.

It should be noted that all solicitors are required to disclose any judgments against them in the annual practising certificate application. An applicant solicitor who knowingly furnishes information that is false or misleading in a material respect in this application form shall be guilty of misconduct.

Debt arrangements

In accordance with the Personal Insolvency Act 2012, solicitors may enter into personal insolvency arrangements or debt settlement agreements. Similar to judgments, any solicitor that enters into such debt arrangements should immediately notify the Society in writing with the details of the debt arrangement, the details of their personal insolvency practitioner, and the date on which the arrangement was entered into.

Where a solicitor who has entered into a debt arrangement is applying for a practising certificate, the Society may issue an unrestricted practising certificate, a practising certificate subject to specified conditions, or refuse to issue a practising certificate, in accordance with the provisions of section 49 of the Solicitors Act 1954, as substituted by section 61 of the Solicitors (Amendment) Act 1994, as amended by section 2 of the Solicitors (Amendment) Act 2002. The solicitor has a right of appeal to the President of the High Court under the same section.

Where a solicitor who has entered into a debt arrangement already holds a current practising certificate, the Society may impose conditions on the solicitor’s practising certificate, in accordance with the provisions of section 59 of the Solicitors (Amendment) Act 1994. The solicitor has a right of appeal to the President of the High Court under this section.

It should be noted that all solicitors will be required to disclose any debt arrangements entered into in the annual practising certificate application from 2014 onwards. An applicant solicitor who knowingly furnishes information that is false or misleading in a material respect in this application form shall be guilty of misconduct.

Regulatory committee

The power to deal with bankruptcy suspension appeals under section 51 of the Solicitors Act 1954 and to make decisions on whether to issue a solicitor with a practising certificate, issue a practising certificate subject to specified conditions, or refuse to issue a practising certificate rests with the Regulation of Practice Committee. The committee will deal with such matters on a case-by-case basis, taking account of the facts applicable to each individual case.

Without in any way limiting the exercise by the committee of its powers, but in order to be of assistance, conditions the committee may consider placing on practising certificates include the following:

a)       The solicitor shall practise only in the name of a specific practice,

b)       The solicitor shall not be a partner or principal of the practice and shall practise only as an assistant or consultant under the supervision of a partner or principal of a practice being a solicitor of at least ten years’ standing, to be approved in advance by the Society,

c)       The solicitor shall not be the sole signatory of any client account cheque, or electronic equivalent, all of which shall be signed, or the electronic equivalent, by a third party to be approved in advance by the Society,

d)      The solicitor shall not sign or otherwise give any solicitor’s undertaking, other than an undertaking that shall be signed by a solicitor to be approved in advance by the Society.

Any solicitor appearing before the committee in relation to bankruptcy suspension appeal, judgments or debt arrangements is advised to ensure that any submission to the committee includes strong proposals on how client monies would be protected, should the solicitor be permitted to practise.

Further information

If you require further information with regard to the consequences of bankruptcy, judgments or debt arrangements for a solicitor, for either yourself of on behalf of a colleague, please contact the Practice Regulation Section. The Society can deal with such queries on a confidential, no-name basis if requested.

LawCare’s freephone helpline (1800 991 801) offers free, independent, confidential and personal help with health issues, such as stress, depression, addiction and related emotional problems. It is available 365 days a year, Monday to Friday from 9am to 7.30pm and weekends/English public holidays from 10am to 4pm. LawCare can also be contacted by email at help@lawcare.ie for pastoral care. Further information is available at www.lawcare.ie. 

John Elliot
Registrar of Solicitors and Director of Regulation