A High Court judge has ruled that a solicitors’ insurer can pursue its application for judgment for €4.9 million allegedly outstanding under a 2011 settlement with Bloxham stockbrokers, the Irish Times reports.
The settlement was made in proceedings over heavy losses suffered by the Solicitors Mutual Defence Fund (SMDF) Ltd fund after it invested in a bond which fell 97% in value.
SMDF, now R & Q Ireland Company Limited by Guarantee, claims it lost almost all of its then reserves of €8.4 million due to the negligence of Bloxham, which collapsed in 2012.
According to the paper, SMDF chairman Patrick Dorgan (pictured) said in an affidavit it had to get a €5 million guarantee from the Law Society to protect its position, ceased offering indemnity to solicitors in 2012 and is now in run-off. It ultimately had to apply to Society to fund a rescue package of up to €13 million and finalised a run-off agreement with R&Q in November 2016.
The insurer applied earlier this year to the High Court for leave to re-enter proceedings, initiated in 2009 against Bloxham, for the purpose of seeking judgment for €4.9 million arising from the 2011 settlement.
Lawyers representing five former Bloxham partners opposed the re-entry, arguing that a High Court order of 31 January 2011, when the settlement was announced, stated the proceedings were “struck out with liberty to re-enter” and the words “struck out” prevented any matter other than the original cause of action being re-entered.
The SMDF argued the proceedings could be re-entered for the purpose of seeking judgment.
In his judgment on Thursday on the re-entry application, Mr Justice Denis McDonald said the words “struck out with liberty to re-enter” signalled that the court was to have a future role and the striking out of the proceedings was “not intended to terminate them entirely”, he said.