Members of the Irish Brokers' Association may be asked for further contributions to cover legal costs run up over the long-running defamation action taken by former member A.E. Dawson.

These further contributions will be necessary if legal costs are higher than the association had anticipated, a senior IBA source said. Members are already paying a levy of £200 each per annum over three years, starting from 1999.

The case ended in 1999 with an award of £135,000 (€171,414) plus costs to the insurance brokerage - a sharp reduction on the £500,000 awarded in 1995 by the High Court to Albert and Dudley Dawson, who represented themselves in court. The IBA appealed this award.

The IBA has estimated legal costs at about £400,000, but the final amount has not been decided.

In their 1999 annual report to members, the IBA directors warned that legal costs would be driven up if the Dawsons were to go the Supreme Court to challenge the position that they may not claim full legal costs for representing themselves.

"It would appear from a submission received by our solicitors that A.E. Dawson & Sons intend to seek costs at a level which, the board is advised, is not permissible by law as it stands; and the company's solicitors are fearful of costs, having regard to the history of this litigation, that A.E. Dawson & Sons intend to pursue the matter once again to the Supreme Court."

However, the directors added that "the Association can meet these costs within the resources of the Association and its members".

A libel insurance premium taken out by the IBA did not fully cover the costs involved. The IBA's latest accounts showed that some £161,075 was still outstanding on the libel insurance policy at the end of 1999. This will be paid by members from the levy funds over the next two years. At the end of 1999, IBA had an accumulated surplus of £38,305, after generating a surplus of £10,587 in the year. The outstanding libel insurance premium of £161,075 was not included in the financial statements.