Law Society of BC's indemnity fund hit by $2M reimbursement for lawyer's gambling

The Law Society of BC says its indemnity fund took a significant hit in having to reimburse over $2 million taken from the trust account of real estate lawyer Russel Sean McDonaugh, who gambled away his clients’ money. This was the worst loss for the Lawyers Indemnity Fund (LIF) in five years, spokesperson Christine Tam told Glacier Media, although it does not come close to the historic $40-million loss disbarred lawyer Martin Wirick was responsible for when he facilitated mortgage fraud.

(Wirick went to jail for seven years.) The fund largely handles lawyer negligence claims; in 2022, it paid out $12 million, including $2 million for clients of McDonaugh, who was recently suspended for seven years following a settlement process with the society. The fund ultimately draws upon your legal fees, as B.C. lawyers pay $1,800 annually for what amounts to an in-house insurance service. “LIF takes theft by lawyers very seriously and provides timely and full compensation, including interest, to every victim up to a limit of $300,000. M

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