1. The number of applications to the Injuries Board has increased steadily over the last five years. However, the rate at which the respondents are agreeing to an assessment (by paying the required fee) is not keeping pace with this increase. In short, the respondents are not engaging in the Injuries Board system with the same enthusiasm as time passes.
2. Each year the Annual Report of the Injuries Board tells us the Fee income from applicants and from respondents, respectively. It also tells us, somewhere, what the fees are for each.
3. So, for 2010, we can calculate that there were 25,767 applications to the Injuries Board. (The Board claims there were 26,964). In that year, only 12,732 respondents paid a fee. (The fee was €1050; it was reduced in 2011). That means that 13,035 applicants, more than half, were left without an assessment. (They get a certificate of authorisation instead).
4. The Injuries Board persists in using the word “award” when it means “assessment”. We know this because it also refers to “accepted award”. This use of language is misleading.
5. Taking this into account, we can see that the figure for acceptances in 2007 is almost the same as the figure in 2010, despite a substantial increase in total claims and a substantial increase in participation by respondents. There were 5,038 acceptances in 2010.
6. Interestingly, the figure for assessments for those two years is almost the same. (8,208 in 2007 and 8,380 in 2010).
7. That implies that there are more problematic cases appearing in the Injuries Board case load; or, that the Injuries Board is becoming more discriminating as to the complexities of personal injury claims.
8. Or, that the medical profession is not keen to run the risks that the Injuries Board system is potentially transferring to it. Errors in assessment (barring a constitutional action yet to come) cannot result in a liability for the Injuries Board, but that is very likely not true of the doctors working for the Injuries Board/respondents. Unlike the Injuries Board, they are not statutorily licenced to make mistakes with impunity.

The current moment presented by the SMDF/Law Society debacle brings to mind the day Charles J. Haughey addressed the Dail. He quoted a fictional character, Othello;

“I have done the State some service and they know it.”

This was feasible only when addressed to an ignorant audience. Othello was a murderer. He was deceived by Iago, but culpably so. He accepted everything Iago told him and took no opportunity to seek evidence of Iago’s assertions. Othello is in fact the minor character in his eponymous play. Not an exemplar for anyone and not to be quoted by way of self justification, particularly when the dominant note of the quote is self pity.

Currently, the Law Society aspires to be Othello, wronged but seeking vindication vainly. Who has been its Iago?

Should it not look to the available evidence. Is it available?

It is worthwhile examining the legislation empowering (and directing) the Law Society of Ireland to set conditions on the issue of a practising certificate to a solicitor.

HERE is the Statutory Instrument relating to 1998. [SOLICITORS (PRACTISING CERTIFICATE 1998 FEES) REGULATIONS 1997]

For example, the obligation to contribute to the Compensation Fund (designed to compensate victims of fraudulent solicitors) is derived from Section 30 of the Solicitors (Amendment) Act 1994. Without that statutory power the Law Society’s regulation could not be effective to compel the payment of the contribution of that year to the Fund.

The Solicitors Acts do not empower the Law Society to levy charges at the discretion of the Society, on solicitors. The charges levied are stipulated in the statutes.

In short, to repeat, currently the Law Society of Ireland has no power to lawfully compel the payment of the levy to make up the SMDF insolvency shortfall. The payment is not provided for in statute, or even contemplated.

Britain is about to go through one of its periodic episodes of legal dyspepsia. HERE is a report from the “Telegraph”. It suggests that the money to pay a successful party’s legal costs, following litigation, should, or may, be paid by the successful party from the compensation awarded in the litigation.

It must be borne in mind that the reporting of issues like this, in the UK or in Ireland, is always of a low quality. The journalists are invariably fully paid up members of some lobby group or other. The current dominant lobby group in the UK is the Conservative party, the principal party in the UK coalition Government.

Britain and Ireland have similar legal systems. “Similar” implies there are differences, and indeed there are. A very practical difference is the attenuated Irish system of State assistance for civil legal costs, compared with the UK system.

In Ireland, family law aside, there is, effectively, no State assistance to pay for civil legal costs. This means that an Irish resident must find the money to pay for lawyers from his or her own resources. Or, he or she must suffer a possible injustice in the absence of legal advice or representation.

It is worthwhile to contemplate what is meant by the phrase “legal advice”. In practice it might be the equivalent, metaphorically speaking, of a radio conversation from air traffic control to a lay passenger in an aircraft, guiding the passenger in the use of the controls and the method for bringing the aircraft to a safe landing on the runway. The chances of a crash are very high and if a pilot could be delivered to the aircraft it would be better.

Flying an aircraft is a learned skill. It costs money to learn the skill and to keep abreast of developments in aircraft design. In short, if the lives of passengers or the preservation of aircraft or property is a recognised goal it is necessary to make social arrangements to have a system that will produce pilots and pay them to land aircraft. Without that system it would be necessary to restrict or prohibit the use of aircraft.

On this view of matters, the UK favours the use of aircraft (meaning resort to legal principles and vindication of rights); Ireland restricts such use.

The UK, to encourage lawyers to work for plaintiffs who have insufficient funds to pay for personal injury litigation, introduced “conditional fee arrangements”. These are also known as “no win, no fee” agreements. If the plaintiff wins the action the unsuccessful defendant will pay the plaintiff’s lawyers. This alone was not a novelty; it is a principle (usually adhered to) that a losing litigant must indemnify the winning litigant against the winner’s legal costs of the litigation. This principle is intended to suppress unreasonable litigation. (It works, assuming litigants and lawyers are reasonable. Sometimes they are not.) In the UK this was implicitly seen as shifting a social burden (funding the vindication of rights) onto lawyers. For the lawyers this was a voluntary burden and they were only willing to take it up if they were paid for it. The pay was to be in the form of an enhanced fee if they were successful. This was seen as reasonable: they were carrying the costs of unsuccessful cases. The unsuccessful defendant, of course, paid the enhanced fee. This was seen as fair; the defendant could always limit his costs by not litigating. (As a practical matter, it can be always assumed a personal injury plaintiff has suffered a loss. It can also be assumed that the chosen defendant was very closely associated, at least, with that loss).

Ireland has established a very elaborate structure to facilitate some defendants who wish to limit their costs by not litigating; it set up the Personal Injuries Assessment Board. (“PIAB”). This also addresses a “social burden”. For the UK the social burden is the vindication of Plaintiffs’ rights; for Ireland it is the vindication of Defendants’ rights.

This judgment is broadly correct despite readily found exceptions. (Ireland expressly safeguards the rights of injured persons; the UK readily undermines their claims).

The legal system does not exist in a vacuum. It reflects society. It is pointless (and wrong) for a millionaire to sue a homeless person in a dispute about the ownership of a coat. Even if the millionaire is in the right, the cost of the litigation will outweigh the value of the coat. However, nobody (excepting the millionaire) would think it pointless, or wrong, for a homeless person to sue a millionaire about the ownership of a coat.

The UK, formerly, would facilitate a homeless person in those circumstances; Ireland did not and will not. The UK is now proposing that the coat be shared between the homeless person and his/her lawyers, to pay for the cost of the litigation. Now, the value of the coat will again determine whether there is to be a vindication of rights.

Real justice would recognise the inequality of arms in this struggle. The formal equality of litigants is often illusory. Lawyers know this and act accordingly.

So, we are back to the lawyers.

TO BE CONTINUED…

Proving a loss of profit is a common event in “business interruption” insurance. It will also arise as part of a claim against a wrongdoer where the damage complained of has closed or stymied the business.

However, it is not immediately obvious what the method of calculation should be. The claim is, inherently, speculative. The loss is the profit which would have been generated but for the wrongful act. The turnover for a prior relevant period would be a start, but not conclusively so; what if the turnover was in sharp decline? (As has happened in banking and construction in Ireland recently). Of course the turnover may have been accelerating (as is the current position with the business of lawyers practising in the field of professional negligence).

It is necessary therefore to find the trend.

It is also necessary to remember that a reduction in turnover will not reflect exactly the reduction in profit; many overheads remain while the business limps on; in short, the profit reduction percentage will exceed the reduction in turnover expressed as a percentage.

This blog has not been silent on negligence by auditors. See HERE and HERE and a suggested remedy to deal with major frauds HERE.

Every audit will follow a plan. If there is no plan, that’s evidence of negligence. The plan will show whether or not the auditor did his/her job properly. Of course if the “auditee” posts sudden enormous losses, that is evidence that there was a major problem in the auditee. Why did the audit not pick up those losses?

A profitable area for examination would the valuations of assets furnished to the auditee. Those valuations may have been provided by “independent” agents (auctioneers), commissioned either by the auditee or a third party. If those valuations were radically wrong that is a basis for litigation against the valuer to recover the loss arising from the deal or property which was the subject of the negligent valuation.

However, an auditor is obliged to take account of the possibility of fraud. Just because a valuation is on a file from an “independent” agent the auditor is not relieved of his/her obligation to consider whether the accounts show a true and fair view of the fiinances of the entity being audited. The fraud may be in the valuations.

1. It is arguably mistaken to anticipate professional negligence actions arising from the “Credit Crunch”. The professionals will be stockbrokers, bankers or money advisors of one sort or another in the financial services industry.

2. All of these professionals are connected to their clients by contract. The contracts cite “terms and conditions”, frequently alluding to the fact that they, no more than any professional do not guarantee a particular result.

3. What they are obliged to provide, however, is a competent careful discharge of their obligations. This covers the “duty of care” in tort law, but also any contractual or other obligations they carry.

4. In the field of Finance those obligations are considerable. They appear as contractual duties, fiduciary duties, duties of confidentiality, statutory and regulatory duties.

5. A fiduciary duty involves avoiding a conflict of interest, for instance. This is an absolute duty; it does not imply a need for care. Either there is a conflict or there is no conflict.

6. The claim of the professional that he “made a house call” will not be accepted where there was a conflict of interest between the “house” and the client.

7. The fiduciary’s duty is often expressed an obligation or duty of loyalty, but in practice inhibits behaviour which would be acceptable in other circumstances. A fiduciary is not free to follow his own interests; the interests of the client/beneficiary comes first. A fiduciary is not free to make a profit from his role; any such profit belongs to his client.

8. Many of the duties of a fiduciary are now imposed on professionals in the financial services industry as regulatory norms. Even if they are not available to be cited as the basis of a breach of duty, these regulatory norms are readily available to determine the implied contractual duties of the professional.

9. The Credit Crunch generated unprecedented circumstances for many large firms in the industry. Those are the circumstances where things are done which should not be done. In many instances, to recover losses, it is simply a matter of collecting the paper trail and instructing solicitors.

It is highly speculative, but an attractive thought, that the Zeitgeist of the early twentieth century produced or induced two events; the development of the modern law of Negligence and the perversion of truth by the Piltdown Man hoax.

They are connected in one respect; a lawyer was at the centre of each event.

Lord Atkin, in the House of Lords, delivered the seminal judgement in Donoghue v Stevenson, and Charles Dawson, a solicitor, “found” the skull of Piltdown Man in an English gravel pit.

Mr. Dawson was a very respectable person, as witnessed by the fact that after his find of Piltdown Man, (officially named “Eoanthropus dawsoni”) critics of the claim that his find were the remains of an early human, were attacked in personal terms.

He allegedly found the remains in 1912. As late as 1938 a memorial was erected at the gravel pit in these terms;

Here in the old river gravel Mr Charles Dawson, FSA found the fossil skull of Piltdown Man, 1912-1913, The discovery was described by Mr Charles Dawson and Sir Arthur Smith Woodward in the Quarterly Journal of the Geological Society 1913-15.”

The memorial was, probably, a desperate last stand of the respectable people. The hoax was fully exposed in 1953 in, inter alia, the “Times”; but the truth had been available since 1923.

The Courts Service in Ireland is an improvement over previous “arrangements” for the delivery of justice.

Inevitably, it being an infant body, it has and will make mistakes. A relatively small but irritating mistake is the installation of “security” in the Four Courts.

Currently,* access by the public to the Four Courts is through a kind of porta-cabin, at what used to be the Morgan Place entrance on the quays. There, one has to pass through a metal detector and put one’s luggage through a scanner. Harmless enough, but expensive, and ineffective to prevent terrorist Muslim attacks.

What Muslim attacks?

There have been none in Ireland.

Of course, they might be launched. Nobody can say they would not be launched.

However, the history of Ireland is replete with times and periods when very real domestic threats of terrorism existed. Frequently, the Four Courts was the scene of forensic points of conflict between the State and an irregular armed power.

There was, effectively, no permanent “security” in the Four Courts during those times.

In the judgment of this writer, the decision to install the current security arose out of a bomb scare in the building which saw the Supreme Court, as a collective, with every other user of the building, walking about on the pavement outside the building and drinking take-away coffee from the back of an entrepreneurial van parked in a loading bay in Chancery Place.

But the solution, the current “security” is not effective. It does not eliminate bomb threats. It is not a proper source of confidence that any bomb threat is a hoax. (It is too easy to circumvent the “security”).

There is an alternative, chilling, explanation; we are aping the US Supreme court. It, too, has closed the front door of the court and is breaking the architectural integrity of its building.

What if terrorist Muslims really are a threat to the Four Courts?

We should spend our money supporting the programme, of Lord Weidenfeld’s Institure for Strategic Dialogue, for a European Muslim Professionals’ Network. That way, at least, Muslim barristers will find a support group to hand when they encounter the dress code of our Rules Committee of the Superior Courts.

Whatever about dress codes, many people would be glad to see the departure of the “security”, including members of the judiciary and at least one senior barrister who, I understand, refuses to produce his electronic pass to gain access to the courts. (Too much; don’t go there).

*(Note; never “presently”, when you mean “at present”. “Presently” means in a “little while” or “shortly” or “in due course”).

As a consequence of Section 49 of the Courts and Courts Officers Act 1995;

49.—A barrister or a solicitor when appearing in any court shall not be required to wear a wig of the kind heretofore worn or any other wig of a ceremonial type.”

I have never known of an Irish solicitor to wear such a wig or to have been required to wear one. The same was not true of barristers. The Rules of the Superior Courts did require a barrister to wear such a wig. In other words, the Oireachtas had to intervene to prevent the Rules committee from persisting in that requirement. (The requirement was in Order 105, Rule 3 of the RSC of 1962)

It is interesting to note the reluctance of the Irish bar to abandon the wig. It is a sign of poor character that a barrister would continue to wear a ceremonial wig without compulsion. (In the UK they are conflicted, as seen HERE. They are trying to get to “business suits”, but court dress includes the wig; the whole shooting gallery in fact.)

I have referred to the committee as a bunch of obscure unelected people HERE.

They may be that, but powerless they are not.

They have changed the Rules of the Superior Courts to ensure that costs on interlocutory applications are not deferred, to be “costs in the cause”.

This is a serious matter.

When Lord Woolf delivered his report in 1996 (“Access to Justice”), one of his objectives as he told an Irish conference on reform of civil law was:

…to make the system more equal. By more equal I mean achieving a situation in which it is not possible for a party to use greater resources to deprive the party who has less resources of the opportunity of obtaining justice.”

The original practice of usually making costs, “costs in the cause” was not a free ride for chancers; the bill eventually had to be paid. However, when that decision as to the identity of the person to pay was made, the court knew exactly why that person should pay.

The new rule favours parties with resources; the more resources that party has the greater the advantage. The new rule may even ensure the precipitate premature ending of the case; a complete denial of justice.

John Breslin has received a letter. Read the letter HERE. His post is interesting, and, as Paul observes, raises unanswered questions. What springs to mind is the challenge in trying explain the issue to the Irish Supreme Court (or any court) if the need arose.

PS. Having seen what happened to Raj Persaud, I expressly confirm I got my tip on this topic from a member of my office team. (I have no desire to find myself investigated like Raj or pursued for what momma saw, or thought she saw).