All of the major Irish banks now impose negative interest rates on solicitor client accounts. This is despite the Law Society's significant lobbying efforts to exempt solicitor client accounts from such interest.
The European Central Bank have welcomed negative interest as a way to encourage economic activity in the context of the impact of the pandemic on the European economy. The negative interest rates vary across the Irish Banks from -0.5% to -0.9%. Additionally the trigger points vary across the banks from €1 million to €3 million. Currently, the negative interst rate applied to our firm's client account is -0.5%.
The banks' thresholds may have been established with the intention of only impacting high net worth individuals and corporate clients. However, by imposing the charge on solicitor client accounts, they will now affect a large number of ordinary customers.
Impact of negative interest on property transactions and administration of estates
Solicitor's clients will essentially now face a double charge in conveyancing transactions and will have to pay more money to meet the contract price. The Law Society has highlighted the injustice of these new charges and their impact of home buyers. However, the Banks insist that the application of negative interest rates are a reflection of the cost incurred in holding the funds on behalf of the customer.
The expectation is that it will now become common for vendor's solicitors in conveyancing transactions to insert a condition in the contract stating that if the amount of any deposit being held by the Vendor's Solicitor is reduced as a result of the application of negative interest, then the vendor shall be entitled to call on the purchaser to make up the deficit. It may also become more common and necessary for solicitors holding their client's money for any extended period of time, to pass the negative interest charge on to the client.
It is expected that Irish Banks will eventually extend negative interests to all consumer accounts, possibly with the exception of small deposits.
McCullagh Higgins & Co. LLP
McCullagh Higgins & Co. LLP
Client Notification of name change as of 3rd May 2021
The partners of McCullagh Higgins & Co. wish to inform our clients and third parties undertaking business with us, that McCullagh Higgins & Co. (“the Firm”) has now been authorised to operate and carry out business as a Limited Liability Partnership pursuant to Section 125 of the Legal Services Regulations Act 2015 (“the 2015 Act”).
WHAT IS A LIMITED LIABILITY PARTNERSHIP?
This authorisation by the Legal Services Regulatory Authority (LSRA) under the 2015 Act, authorises a partnership of solicitors to operate as a Limited Liability Partnership (LLP). This does not create a new legal entity. In an LLP, that has been properly authorised such as McCullagh Higgins & Co. LLP, each partner will not (as a result of being a partner in the LLP or being held out as a partner in that LLP) be personally liable, directly or indirectly, for the debts, obligations or liabilities arising in contract, tort or otherwise of:
INFORMATION WE WISH TO PROVIDE TO YOU
As and from 3rd May 2021, the Firm has been authorised to operate and carry out business as a Limited Liability Partnership pursuant to Section 125 of the 2015 Act as an LLP Limited Liability under the title and style of name of McCullagh Higgins & Co. LLP.
WHAT DOES THIS MEAN TO YOU?
Other than the changes described above, there is no change in how we do business with you, or how you do business with us. We continue of course to hold all necessary and required professional indemnity insurance covering all legal services provided to you by the Firm.
If you have any queries or issues regarding the above, please contact any of the partners of McCullagh Higgins & Co. LLP, whose contact details can be found on our website www.mccullaghhiggins.com
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