costs

This post is not about the facts of O’Flynn v Creighton, currently at hearing. Except for one fact. How is Lucinda Creighton going to pay for her legal representation? She is in the middle of a very expensive form of litigation. The costs are particularly high in defamation actions.

Leaving aside the fact that she is in receipt of a substantial income as a Minister of State, there is no Legal Aid for defamation actions. Even if she were as poor as a church mouse she would not get legal aid.

So what? Why should anybody get legal aid in such a case? Because without some funding help, a person might not get justice.  It is impractical to think that justice is possible for a lay litigant. In the Irish court system, the judge is not intended to help one party at the expense of the other. If that happens in a case with a lay litigant (as it most likely would), the help will be minimal; otherwise the party with the legal representation will simply appeal to a higher court and have no difficulty finding grounds for the appeal.

What has this to do with Lucinda Creighton? Well, it brings to mind the McLibel case. Ultimately, the UK itself lost the McLibel case. Ireland is perfectly poised to follow it to ignominy.

Ireland’s continuing failure to make proper, modern provision for the funding of litigation of any type (except, minimally, Family Law) is a scandal and will eventually cost a lot of money.

Which of us is happy with our handwriting? Some, no doubt, but for many of us the admirable writing in our school handwriting workbooks is a thing of the past.

[The United States of America produced its Declaration of Independence in cursive script (HERE)]

So it is with other standards. Here in Ireland we call cursive script joined-up-writing and we aspire to that, but we have little tradition of its cousin, joined-up-government.

In Ireland, government must be conducted in accordance with the Irish Constitution and in pursuit of its objectives. One of those objectives is to vindicate the person [or the good name] of the citizen. That means that if a person is injured the State must and will ensure the citizen is compensated by any wrongdoer responsible for the injury.

You would think that this imperative would produce a regime directed to that purpose, but if you did you would be wrong.

Sure, in law a wrongdoer is liable to pay compensation, but Ireland is not anxious to ensure that that happens. If it were it would have introduced a system currently to be found in the United Kingdom. There, an injured person can enter an agreement with a lawyer to pay an enhanced fee for legal services, conditional on the claim being successful [“Conditional Fee Agreement”]. The defendant will then be liable for that fee in the event of success. In short, the UK recognizes that poor claimants are at a disadvantage relative to rich claimants, in legal proceedings.

This is an inherent feature of the previous UK position [and the current Irish one] where everybody is assumed to be a prosperous gentleman [probably Victorian] who pays his lawyer’s bills on a weekly or monthly basis and expects to recover those expenditures from any wrongdoer when he is successful in his claim that his lawyer prosecutes.

That assumed position is unreal. Such prosperous gentlemen are few and far between. Everybody knows this and yet, in Ireland, nothing is done to remedy the situation.

In fact, the opposite has happened. The government established the Personal Injuries Assessment Board [“PIAB”] to assist defendants. No claimant’s lawyer’s fees are payable by the respondent in the PIAB system. PIAB itself assures claimants that they do not need a lawyer to represent them, a claim at once untrue and an insult.

Any intelligent PIAB claimant must engage a lawyer at his or her own expense without any chance of making the defendant wrongdoer assume responsibility for that expense despite the fact that the defendant caused the expense to be accrued.

On top of all of that, in Ireland it is illegal for a lawyer to advertise that he or she will act for a claimant on the basis that the claimant will not have to pay legal fees if the claim is unsuccessful.

All in all, these provisions and arrangements are in direct opposition to the objectives of the Irish Constitution.

Insurance has a strange aspect which we often overlook; we are happy that we did not need it.

We do not think that the premia paid year after year to insure our house is wasted money. After all, we do not want our house to burn down; we just want to rebuild and restore it if it does. So, we pay a small sum of money to meet the possibility of having to pay the much larger sum if the house does burn down (or suffer some other form of damage).

Sometimes the question of what is a proportionate sum to pay as a premium to cover the perceived risk has to be publicly determined.

In the UK, unlike Ireland, there is anxiety that justice should be facilitated. By “justice” is meant the ready and easy opportunity to go to court seeking a remedy without being prevented by extraneous causes, like poverty. Poverty is relative; most people in Ireland would consider the costs of a High Court action (or even a Circuit court action) beyond them.

Consequently, the UK authorities have facilitated schemes intended to achieve this end.

One such scheme is to allow lawyers who work on a “no win, no fee” basis to charge a significantly higher fee when they are successful, and provide that the losing party has to pay that higher fee as a matter of course.

Another is to recompense a plaintiff his or her insurance premium for “After The Event” (ATE) insurance. This is insurance taken out to, effectively, help pay for some of the litigation costs of the plaintiff/insured.

Section 29 of the UK Access to Justice Act 1999 provides:

“Where in any proceedings a costs order is made in favour of any party who has taken out an insurance policy against the risk of incurring a liability in those proceedings, the costs payable to him may, subject in the case of court proceedings to rules of court, include costs in respect of the premium of the policy.”

Inevitably, the losing defendants (other insurance companies) took issue with the premia being charged for the ATE.

HERE ‘s the outcome of that dispute.

Britain and Ireland have similar, but different, legal systems. In Britain it is permitted for solicitors and barristers to agree to act for no, or a reduced, fee, conditional on being entitled, on winning the case, to charge the client (and a losing opponent) an enhanced fee (one larger than the norm). This is known as “a conditional fee agreement” (CFA).

This is not possible in Ireland.

In Britain, these CFA arrangements are most common in personal injury claims. In Ireland the principal law applicable to such claims and the terms to be agreed between solicitors and clients is S.I. No. 518/2002 — The Solicitors Acts, 1954 To 2002 Solicitors (Advertising) Regulations, 2002

Under the Regulations it is illegal for a solicitor to advertise “No win, no Fee”. Solicitors are not permitted to calculate their fees by reference to a percentage of the compensation recovered for the client. (Or as the Regulations put it, “In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement”.

Furthermore, not only are solicitors subject to the foregoing restrictions but are also restricted from offering “legal services involving contentious business… at no cost or reduced cost to the client”

Indeed, it is the obligation of a solicitor to give an estimate of the costs of the legal services to the client in writing, at the commencement of the engagement.

Finally, the Regulations provide, inter alia, advertisements shall not “be published in an inappropriate location”.

(We know for sure that the back of a bus is an inappropriate location).

In the UK they purportedly reformed the system of civil justice with the Woolf Report. There is some reason to doubt this.

Now, a debate has started, questioning the complacent view that the reforms were successful.

The debate has the unseemly presence of Lord Woolf in it. It is unseemly for him to “defend” his “reforms”. The subject is too important to be tainted by an effort to defend a personal investment.

However, the debate is a salutary reminder of how far behind we in Ireland are. The UK has a debate; we have nothing.

Instead, we still have a Rules Committee that had to be restrained by the Oireachtas from compelling barristers to wear wigs and that coolly front-loads the costs of litigation on litigants; all without any input into these “ideas” from the profession.

Why do some people respond to social problems by supporting provisions that deny, in effect, the existence of the problem (“right wing”) while others insist on the recognition and resolution, by society, of all problems (“left-wing”).

It is a mystery, but it is rare to find anybody at either end of the spectrum who is a purist. The person of right-wing views tends to be very concerned that the problems of property owners be never denied by society, while sheer fatigue will reduce the enthusiasm of the most radical of left-wingers.

The UK Civil Procedure Rules (“CPR”) contain the averment that their aim, above all, is to deliver justice.

That claim alone is, or should be, sufficient to put one on one’s guard.

Sure enough, see HERE for a complaint at length about the deficiencies of the CPR. It is impressive in its argument from statistics, coupled with direct condemnation of “front-loading” of costs. The latter is of particular interest for Ireland. Only very recently our Rules Committee of the Superior Courts introuduced exactly such a provision. See HERE for my complaint about that change.

Where do these fashions come from? I cannot say myself; what is depressing is the absence of any method of having them reversed easily.

More to the point, there is never established, a feed-back mechanism, to confirm that the change is beneficial.

In Ireland, we lean to the Right (“radical or redundant”) rather than the Left.

In short, we sweep problems under the carpet.

With the Irish economy in retreat (recession), lawyers will still find a need for their services.

In truth, there is probably a large core of business for Irish lawyers, regardless of the state of the economy. (And that takes no account of the possibility of duplicating the activities of Allen & Overy).

The real issue is not the availability of work, but the financing of the work.

Ireland has seriously handicapped its legal profession, relative to the UK. There, it is possible, under Conditional Fee Agreements (“CFAs”), to recover double (say) the standard fee in court taxation if the lawyers have agreed to act on a “no win, no fee” basis.

In Ireland no such official arrangement exists.

Of course the real loser from the State’s failure is the Irish citizen. At very little cost to the State, it could empower victims to defend their interests and vindicate their rights in fields as diverse as defamation and personal injury litigation.

The legal basis, in the UK, for CFAs is s.58 of the Courts and Legal Services Act 1990, as substituted by s.27(1) of the Access to Justice Act 1999, the Conditional Fee Agreements Regulations 2000 (SI 2000 No 692), amended by the Conditional Fee Agreement (Miscellaneous Amendments) Regulations (SI 2003 No 1240) and the Conditional Fee Agreement (Revocation) Regulations 2005 (SI 2005 No 2305).

Under the Regulations, the plaintiff client will become liable for fees only if he/she:

a) fails to co-operate with the legal representative;

b) fails to attend any medical or expert examination or court hearing which the legal representative reasonably requests him to attend;

c) fails to give necessary instructions to the legal representative; or

d) withdraws instructions from the legal representative.

This failure by the Irish State is particularly glaring in the light of the fact that there are, currently, proceedings at hearing, in Dublin, intermittently, which potentially, if not actually, are financed by CFAs.

Those proceedings are the Omagh civil action arising out of the bombing of Omagh.

Why should Omagh be different to Dublin?

It frequently happens that a Plaintiff is driven by necessity to apply for injunctive relief to the court before the trial of the Plaintiff’s action.

Such applications are heard on Motion, grounded by Affidavit. These applications are fraught with stress and uncertainty.

I have adverted HERE and HERE to the the undesirability of deciding on the liability for costs for such applications at the time of the application. Traditionally, the court reserved that decision to the hearing of the action.

This was a fair and sensible attitude. At the full hearing the trial judge would have been presented with, presumably, all the available evidence. The verdict of the trial judge might, or might not, correspond to the outcome of the application for the injunction. In short, the successful party on the application for interlocutory injunction might not be the ultimate successful party at the trial.

In Chieftain Construction & Anor v John Ryan & Ors. [2008] IEHC, Edwards J. refused an injunction to the Plaintiff applicants and invited submissions on the costs of the interlocutory application from the parties.

In his judgement the judge adverted to the difficulties inherent in the court, at an interlocutory application, engaging in a consideration of the relative strengths of the parties’ cases. He said:

The Court is cogniscent that one of the principal arguments against a judge engaging with any question of the strength of the case at the interlocutory stage is that in many cases the evidence is incomplete. There may be conflicts in the evidence that are incapable of resolution on affidavits alone, and which can only be resolved in the course of a plenary hearing where evidence is tested in the crucible of cross examination.”

In the course of this exercise he quoted Laffoy J. in the case of Symonds Cider v. Showerings (Ireland) Limited [1997] 1 I.L.R.M 481 where she stated:

I am satisfied that, having regard to the decision of the Supreme Court in Westman Holdings Ltd v. McCormack, it is not open to this Court, assuming the plaintiff has established that there is a fair and bona fide question to be tried, to express any view on the strength of the contending submissions in this case. In any event, even if it were open to the court at this interlocutory stage to evaluate the likely outcome of the trial, in my view it would be impossible to do so in this matter, which is bristling with difficult issues of fact arising from conflicting affidavit evidence and difficult issues of law.�?

Because of the clarity of the net point on which the Plaintiff’s case rested (in the opinion of the judge), he went on, in the case, to assess the relative strength of the Plaintiff’s case to that of the Defendants.

The unsuccessful Plaintiffs were hit with a double whammy. Their fundamental case was assessed on the basis of affidavit on an interlocutory application and then the question of the payment of costs of the unsuccessful application was tabled for consideration.

In the particular case this might not be unjust. But if such Plaintiffs are wrong, they will, in due course, be brought to book ultimately at trial or by seeking to discontinue (by agreement with the opposing party or the court) on terms.

To deprecate their case and force the issue of the payment of costs on the application seems unnecessarily abrupt.

I have written HERE of the problem posed, in Ireland, by new a High Court rule dealing with the costs of preliminary interlocutory applications.

Compare this harsh provision with the approach of the Court of Appeal in England & Wales HERE where they gave a Protective Costs Order to “Buglife”, a charity to protect invertebrates.

Buglife was trying to restrain development which, as the Court heard, would probably result in two national, 17 regional and 37 local invertebrate extinctions if the development went ahead.

The settled animus of Ireland’s political class towards the eccentric would ensure that nobody in Ireland would adopt the humourous title “Buglife” for their charity and would, through the representatives of that class in the world of Irish law, punish its adoption if it went to court, even in discharge of its laudable purposes.

The new Chairman of the Bar Council must surely remember the events surrounding the introduction of the rules of disclosure of reports in personal injury actions.

They should fortify him in his efforts to have canceled, or substantially amended, the new rule of the Superior Courts in Statutory Instrument No. 12 of 2008 as suggested HERE.

The practicality of changing the effect of Statutory Instrument 12 of 2008 is real and the example is found in the recent past.

The Superior Courts Rules Committee introduced an amendment to the rules in 1997, as set out HERE.

Very promptly, the amendment was revoked and replaced by a new rule as set out HERE. This was discussed in the Supreme Court in Payne v Shovlin [2005] IESC.

The Court accepted that the effect of the 1997 rule on disclosure was too broad and the new, replacement rule was of a narrower ambit.

In short, when the bad effects of a rule or rule change is manifest the Rules Committee is capable of responding positively.

Go to it, Mr. Chairman!

(PS: Issue a new Press Release; your website shows Turlough O’Donnell as the Chairman, according to the latest Press Release on the topic; cancel the old Press Release).