Beneficiaries not paid total of estate (50 years delay!)

Lowtable23

Solicitors have  told us that they have recently discovered that £2,700.00 belonging to my grandfather's estate they handled has been erroneously held by their office since 1973. They are offering to pay the executor, now very elderly, the principal, plus the same amount in interest for the 51 years they have held the money (eg a total of £5,400). Is this a fair amount to offer,how much compensation should we ask for? What action should we take as to the way forward? No apology has been received. 

born_again

I would expect that 8% interest is added to the £2,700 as per FCA guidelines. Even though this would not be a FCA matter.
Which would be somewhere in the £13K region.

Marcon

Lowtable23 said:

Solicitors have  told us that they have recently discovered that £2,700.00 belonging to my grandfather's estate they handled has been erroneously held by their office since 1973. They are offering to pay the executor, now very elderly, the principal, plus the same amount in interest for the 51 years they have held the money (eg a total of £5,400). Is this a fair amount to offer,how much compensation should we ask for? What action should we take as to the way forward? No apology has been received. 

The lack of an apology really upsets people - and yet it's so simple to do, even with current days attitudes to PI insurance and potential litigation (neither of which is likely to be an issue in this case).

There are special rules applying to interest where a solicitor holds money on a client account. Interest of a bit less than 1.4% per annum isn't exactly sparkling! I'd go back and ask them to confirm why they feel such a low amount is appropriate given this was entirely their error, and a much better return would have been obtained in pretty much any building society account or similar.

Keep_pedalling

born_again said:

I would expect that 8% interest is added to the £2,700 as per FCA guidelines. Even though this would not be a FCA matter.
Which would be somewhere in the £13K region.

Solicitors are regulated by the SRA and all they say is that interest paid should be fair. I don’t think what has been offered is fair so the executor needs to go through the complaints procedure.

Grumpy_chap

There was a recent (ish) thread in another part of the forum (house buying ?) where a Solicitor had held funds for a protracted period and how they dealt ( or not) with the interest due.
It might be worth the OP trying to locate.

Edit:  here it is 
https://forums.moneysavingexpert.com/discussion/6523422/solicitor-held-my-money-for-20-years-should-i-get-interest-on-top-of-the-capital-amount/p1

km1500

or you could use the Bank of England inflation calculator which shows that £2700 in 1973 would be worth somewhat over £28,000 today in purchasing power

https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

Or ... I just looked up at the price of my parents' first house in Leeds which they coincidentally bought in 1973 for around £1000. it is worth 193,000 today meaning your £2700 should be worth £521000, especially if the money was as a result of a house sale back in 1973

retiredbanker1

Statutory Interest rates did not come into force until November 1988.
(I have not looked to see what the rates have been before it became 8%)

If I was the OP I would write to the solicitors and just ask how they have calculated the extra payment.

Asking for hundreds of thousands is just plain silly and won't get paid but will further delay the payment to the executor.

Marcon

retiredbanker1 said:

Statutory Interest rates did not come into force until November 1988.
(I have not looked to see what the rates have been before it became 8%)

If I was the OP I would write to the solicitors and just ask how they have calculated the extra payment.

Asking for hundreds of thousands is just plain silly and won't get paid but will further delay the payment to the executor.

That certainly be in line with what the SRA would expect: https://www.sra.org.uk/sra/news/sra-update-126-interest-rates/#:~:text=You%20account%20to%20interest%20on,them%20to%20give%20informed%20consent.

OP could do worse than point them to this SRA News item.