The Personal Injuries Assessment Board will, it says, pay the actual expenses (or some of them) of selected claimants. This will extend to legal fees incurred by the claimant. However, 90% of claimants are incurring legal fees. The Board will not select those people as entitled to reimbursement of expenses. We will have to wait and see who it selects and why and, more importantly, who it will not select.

It should be borne in mind that PIAB is a creature of the Government and is funded by the Insurance industry and designed to benefit it.

The PIAB concession to claimants is an admission that the selected claimants would, under PIAB, and in the absence of the concession have suffered a detriment with a corresponding benefit to some insurance company.

PIAB is unashamedly a method for distributing social losses with the distribution skewed in favour of wealthy insurance companies.

What will happen when PIAB is made subject to the investigations of the Ombudsman, Emily O’Reilly?

Eoin O’Dell has posted a discussion of the question of whether finding and using open wireless broadband connections paid for by somebody else is a criminal offence.

This is a question that comes up every now and then in online discussions.

Back in September 2002, Karlin Lillington of the Irish Times raised the question;

According to a discussion at last night’s Wireless Wednesday in Dublin, “warchalking” — or identifying with (usually) chalked symbols where wireless networks are in operation to allow people to connect in to them — is illegal in Ireland, due to some element of a regulation passed by the then-Dept of Public Enterprise a year ago. Will see if I can find out more.

From what I can make out, quite apart from any Dept. of Public Enterprise regulation, it seems to fall under the new (well, in force since August 2002) definition of theft in the Criminal Justice (Theft and Fraud Offences) Act 2001. According to Section 4(1) of the Act, “a person is guilty of theft if he or she dishonestly appropriates property without the consent of its owner and with the intention of depriving it owner of it.”

As property’s definition includes “intangible property” such as bandwidth, and the appropriation of property (S.4(5)) includes “adversely interfering with the proprietary rights of the owner”, I’d say that it could be the basis of a criminal charge against somebody gaining access to an unprotected wireless internet connection. Max penalty is 10 years imprisionment and an unlimited fine.

But let’s not rush our hypotheical email-checker to the gallows just yet. Let us not forget that sub-section 4(2)(a) goes on to say;

(2) For the purposes of this section a person does not appropriate property without the consent of its owner if—

(a) the person believes that he or she has the owner’s consent, or would have the owner’s consent if the owner knew of the appropriation of the property and the circumstances in which it was appropriated

Not the easiest case for the prosecution to prove.

The Department of Family and Social Affairs has failed to secure the data of some data subjects on which it holds data. The consequences were severe; one man was burgled and three others were subject to extortion threats.

What is surprising is the identity of the person rushing to reassure the public that its data will be safe; it was the Data Protection Commissioner.

He is, of course, a civil servant, but he is also charged under the Data Protection Acts 1988 to 2003 with policing the holding of data and, where necessary, the prosecution of offences where breaches occur.

Why, therefore, is he assuring the media that the Department of Family and Social Affairs “…is working on technological solutions which would limit the access employees have to data in the system.�

Under the legislation it is his job to find data controllers who are not making data secure and to prosecute them for breaches.

Where are the prosecutions?

1. Nobody in the solicitors’ profession is happy with the situations revealed in the practices of Mr. Lynn and Mr. Byrne.

2. It is alleged that they managed to borrow money from a substantial range of banks and building societies without furnishing proper security for the borrowings in the form of mortgages on their own property. Mr. Lynn, it appears, was building a substantial property portfolio using, it appears, those borrowings. He also had received deposits from property investors who expected to buy developed properties from him in due course. This latter business is not solicitor’s business and he would have been carrying that on his own account like any businessman.

3. The media have conflated Mr. Lynn’s case and Mr. Byrne’s case. They are separate. There is no connection between them. If there is, it is no more than the connection they each have to the other members of the profession; i.e. membership of the Law Society of Ireland.

4. The Law Society of Ireland has alleged there is a substantial deficit in Mr. Lynn’s solicitor’s client account. Mr. Byrne’s practice has been closed by the Law Society and he has not presented himself, as yet, to the High Court in the proceedings initiated by the Law Society against him. The Law Society’s proceedings are taken under the Solicitors’ Acts and currently are in the nature of applications for interim relief.

5. In the case of Mr. Lynn, given his use of the client account for his property company dealings, it would have been better if the Law Society had completed its audit of the accounts before reaching its conclusion that there was a deficit in the client account. According to the Law Society findings he was raising and receiving finance in his own name but paying it into the client account. In those circumstances the deficit may not be real.

6. The difficulties immediately presenting themselves, in the lending institutions’ court proceedings, is the absence in many cases of executed (or registered) mortgages on the properties on which the loans were advanced.

7. The current estimate of liabilities of the two solicitors, taken together exceeds, it appears, €100 million.

8. A High Court judge has described the applications to court of the lending institutions as “rushing to judgement�.

9. To date, the media reports fail to address important underlying aspects:

a. Who is a client? A client is a person retaining, by agreement of the solicitor, the services of a solicitor. Section 2 of the Solicitors (Amendment) Act 1994 further defines a client as including:
“…the personal representative of a client and any person on whose behalf the person who gave instructions was acting in relation to any matter in which a solicitor or his firm had been instructed; and includes a beneficiary to an estate under a will, intestacy or trust.�
Regulation 2 (1) of the Solicitors Accounts Regulations 1984 defines client’s money as:

Client’s Money” shall mean money held or received by a solicitor on account of a person for whom he is acting in relation to the holding or receipt of such money either as a solicitor or, in connection with his practice as a solicitor, as agent, stakeholder or in any other capacity;…

b. Thus, the receipt of money as stakeholder, for instance, will mean the solicitor will be in receipt of client money and therefore the owner of that money (usually the client of another solicitor) is a client.

c. Who is not a client? Section 21 (17) of the Solicitors Act 1960 (as inserted by Section 29 of the Solicitors (Amendment) Act 1994) stipulates; “a solicitor or a body corporate beneficially owned by that solicitor shall not be a client of a solicitor’s practice in which he is the sole practitioner or in which he is a partner.� A lending institution advancing finance to a solicitor, acting for a client in conveyancing, is not a client; its relationship with the solicitor is defined by the undertaking, furnished by the solicitor, for the application of the finance to the subject property and the assurance of good and marketable title.. All the stronger, therefore, a lending institution advancing finance to a solicitor, acting for himself or his property company, in conveyancing, is not a client; its relationship with the solicitor is defined by the finance facilities letter and/or the undertaking, furnished by the solicitor, for the application of the finance to the subject property and the assurance of good and marketable title. The reason why Regulation 2 (1) of the Solicitors Accounts Regulations 1984 does not have the effect of making the lending institution a client is that the release to the solicitor of the finance is the release to the client (the borrower). In other words, the solicitor is the client’s agent to receive the money.

d. The solicitors’ profession maintains a Compensation Fund pursuant to Section 21 of the Solicitors Act 1960 (as inserted by Section 29 of the Solicitors (Amendment) Act 1994). This is to provide compensation to clients suffering loss arising from the dishonesty of a solicitor. The section provides:

Where it is proved to the satisfaction of the Society that any client of a solicitor has sustained loss in consequence of dishonesty on the part of that solicitor or any clerk or servant of that solicitor arising from that solicitor’s practice as a solicitor within the jurisdiction of the State, then, subject to the provisions of this section, the Society shall make a grant to that client out of the Fund.

e. Therefore only a client of the solicitor may make a claim on the Compensation Fund (and the client must have exhausted all other avenues of recovery). A claim must be lodged within three months of the discovery of the loss.

f. Solicitors must maintain professional indemnity insurance, pursuant to Section 26 of the Solicitors (Amendment) Act 1994.This is to provide indemnity to the solicitor for claims for compensation for loss “arising from his practice as a solicitor� in respect of any description of civil liability. Normally, the policy of insurance does not cover claims based on fraud. (Gray v Barr (Prudential Assurance Co. Ltd., third party [1971] 2 QB 554.)

g. Where the solicitor is not acting as a solicitor, but in a personal capacity, losses are not covered by the Compensation Fund or the professional indemnity insurance.

10. Do Mr. Lynn’s liabilities exceed his assets? We do not know; the Law Society proceedings to date are being consistently adjourned to continue with the investigation into the files and the accounts. Indeed, we cannot yet say if that exercise will answer the question; the point of the Law Society’s investigation is directed elsewhere.

11. What happens if a solicitor’s liabilities exceed his assets? He will, like everybody else, be open to the risk of the service on him of a Bankruptcy Summons from the High Court seeking to have him made a bankrupt. If a solicitor is bankrupted he is not permitted to remain in practice. More importantly, special rules apply if he is bankrupted. The money in the client account does not form part of the property divisible among the creditors. (Section 68 of the Solicitors Act 1954 and Incorporated Law Society of Ireland v Owens, Duffy & Reilly IEHC 11th January 1989). This is logical; that money belongs to the client and is trust money. Each client is a beneficiary of the trust in respect of his/her money.

12. What happens if there is a deficit on the client account? The clients share the available money rateably in proportion to the money they are entitled to.

13. What liabilities arise where a solicitor gives an undertaking? With rare exceptions, the High Court will compel a solicitor to comply with an undertaking to the extent, if necessary, of attaching the solicitor (committing him to jail). So, assuming a solicitor, giving an undertaking in respect of his own borrowings (that is, he is both the “client� and the solicitor), is liable on the undertaking as well as the borrowing liability, the court will enforce the undertaking against the solicitor. A solicitor is entitled to a reasonable period of time to deliver on the undertaking.

It is far from our wish to add to the general hint of ridicule which has accompanied the reports of the former Minister for Justice Michael McDowell SC and Richard Nesbitt SC, chairman of Arnotts, as they argued over the finer points of knitwear on behalf of Karen Millen and Dunnes Stores respectively.

However, this case, in which judgement has been reserved, is the first major test of the application of a 2002 European Union Directive to the fashion industry. Other, similar, cases are pending its outcome. If the Directive is found to protect Karen Millen’s knitwear design then other retailers at the budget end of the fashion spectrum (Penneys springs immediately to mind) may find themselves and their business model in hot water.

It is worth considering for a moment the broader question as to whether the implementation of intellectual property protections for clothing designs is in the interests of the public or even the fashion industry as a whole.

The New York Times reported in April on a study by two law professors, Kal Raustiala of the University of California, Los Angeles, and Chris Sprigman of the University of Virginia. In it they consider the “pirate paradox�. The key to this paradox is that there are very weak IP protections for fashion designs. Yet the industry thrives, and continually produces new and innovative designs.

The authors argue that copying may well be one of the engines of innovation in the fashion business- that each spot on the fashion foodchain (crudely, from designer to high-street to budget) looks down on the next and that people will abandon clothes sooner than would otherwise be the case if they see the next layer down starting to wear them.

Thus, in seeking to freeze copying (or ‘homages’ as the industry frequently seems to prefer terming it) for three years the EU Directive may have the unintended consequence of stifling innovation in European fashion.

One final thought occurs. During the course of the hearing it was suggested that Karen Millen’s designers themselves may have been inspired by others further up the foodchain. It is possible that, even if successful, High Street chains may rue setting a precedent which could come back to bite them.