1. I have been injured; will the person who injured me, or his/her insurance company, hasten to fully compensate me?

No, they will not. This is human nature and also implied in the social arrangements under which we live.

2. Will the Injuries Board ensure that my interests are fully looked after?

No, it will not. It has a limited focus. It only addresses one question; the level of compensation the injured person ought to get. It does little to ensure that you will actually get your compensation.

3.         How can that be?

An injured person will get nothing unless he/she can prove, if necessary, that some other person has been at fault and that the injury results from that fault. The Injuries Board expressly excludes consideration of fault.

4.         Surely that’s a good thing?

Yes, if the person who injured you expressly admits the fault.

5.         Will that happen in the Injuries Board system?

No, it never comes up for mention.

4.         Who will look after my interests, then?

You will.

5.         How do I do that?

By fully understanding what is implied in the Injuries Board system.

6.         What is implied in the Injuries Board system?

The Injuries Board system exists to ensure that any legal costs incurred by you as a result of your injury will be borne by you and not by the person who injured you.

7.         Is that true?

Not completely. That’s how the Injuries Board started out, but it has changed its mind. It now makes an effort to make your opponent pay for your legal representation, or some of it, if you, the injured person, are a vulnerable person.

8. I have been injured. Am I not vulnerable by that fact alone?

No, not in the view of the injuries board. In the view of the person from whom you are trying to extract compensation, or his/her insurance company, yes, you are vulnerable, but that is advantageous to them and they owe you no duty to reduce your vulnerability.

9.         I am inexperienced in these matters. Am I not vulnerable by that fact, then?

No, not in the view of the injuries board.

10.       What is a vulnerable person, in the view of the Injuries Board?

Someone who needs legal advice to make the application to the Injuries Board.

11.       But surely no such advice is necessary?

The Injuries Board thinks it is sometimes. If you are a vulnerable person.

All employers have a responsibility to protect their employees, contractors and visitors from accidents and injuries. The obligation to secure the safety of independent contractors is specifically expressed in Section 12 of the Safety, Health and Welfare at Work Act 2005.

This means that confusion as to who is or is not an employee need not deprive an injured person from securing proper compensation when injured in a workplace.

The employers duty includes ensuring:

That the employer provide employees with the necessary machinery and tools to complete the job. Those tools and machines are to be maintained in a safe condition.

The workplace must be kept in a safe, tidy condition with floors, doors and gates clean and clear and free from hazards.

The employer is vicariously for the negligence of his/her employees, so a worker injured by the negligence of a fellow worker is entitled to compensation from the employer.

Employees working at a height are protected by S. I. No. 318/2006 – Safety, Health and Welfare at Work (Work at Height) Regulations 2006.

This writer remembers, he thinks correctly, that the phrase “compo culture” was coined by a PR spokesman for Dublin Corporation (now Dublin City Council). Probably the spokesman was simply adapting a phrase coined elsewhere, because the title to this post is known in the UK and, it appears in Australia.

Taken literally, we can confidently say that it is a universal social principle that compensation be paid where loss is suffered and the liability to pay for that loss lies with someone other than the victim.

This formulation is very wide; it will cover cases of injury arising from negligence, say, (See HERE for a treatment of Tort law in common law jurisdictions) but also claims for indemnity under an insurance contract.

The principle is not undermined by individual failures in making payment.

Taken with the provisions of domestic law a regional example of that universal principle is to be found in the European Convention on Human Rights (Article 6).

We are now, unfortunately, familiar with some compensation principles which, by arcane means, apply when banks fail. Certain creditors of such banks are compensated for their losses arising from default. The compensation is so certain that the default is scarcely admitted and is, for practical purposes, imperceptible. By those arcane means the liability to pay the compensation is passed to the citizens of the country responsible for supervising the failed bank. (The arcane means are not legally binding means).

It was always clear that the phrase “compo culture” was not an attempt to deny any compensation to any and all claimants; it was directed against one small class of persons, those persons who had been personally injured by negligence or breach of statutory duty. In effect, it was a brazen effort, if taken literally, to repudiate the obligation on wrongdoers of remedying the losses they had inflicted on others.

Life is complicated; consequently it has come about that the liability to pay compensation for personal injury frequently rests on both a liability in negligence and a liability under a contract of insurance. We see this in Domican v AXA Insurance Ltd. [IEHC] 2007 where the judge remarked that the plaintiff and the defendant had a relationship with each other (arising from the fact that the defendant had agreed to insure and indemnify a person whom the plaintiff claimed had injured him through negligence). In the UK that relationship is expressed in a civilized way in the Third Parties (Rights Against Insurers) Act 2010.

Ireland has no such legislation (and no proposals to remedy the situation). The UK made such provision as far back as 1933.

The Irish State has a very poor record in defending the constitutional right to compensation for personal injury. That should come as no surprise when we reflect on the reason why the Minister for Defence (and Ireland consequently) became liable to compensate soldiers in what was known as “the Army deafness cases”. A civil servant had consciously decided not to make provision to protect the hearing of soldiers from exposure to loud and damaging noise. That decision was recorded and the record was obtained by the claimant soldiers, all of whom could show they suffered hearing loss or damage following that decision. (Even without the decision the State would have been liable; it was not a novelty that loud noise is dangerous). The reason for the poor record is straightforward; Ireland clearly has (or had) a very poor quality of civil servant and politician. (In the Irish Times of 11^th December 1997 a headline read; “Smith says deafness claims are wrong and immoral”. Smith was the Minister for Defence.)

It is generous to say Ireland’s record is poor on this issue. Ireland is malevolent on the point. See HERE and HERE for this writer’s opinions.

The Council of the Law Society of Ireland has proposed that the members of the Law society vote for the following proposal:

“That [the members] approve[s] the recommendation of the Society’s Council to provide financial support to the Solicitors Mutual Defence Fund…”

Surprisingly for lawyers, the Council seems not to recognise that it carries a risk of non-persuasion. This is evidenced in its several failures to treat the members respectfully.

Why did the Council submit the proposal to the members, rather than adopt it at the Council? The Council elided the question, but the answer is very relevant. Many of the Council members are also members of the SMDF and would therefore, be conflicted. A vote by persons with a conflict of interest would be easily overturned in the appropriate forum. In short, the Council could not lawfully adopt the proposal.

The Council has not been restrained in its advocacy of the proposal. It has urged its adoption on the Law Society members. It is using the resources of the Law Society to procure its adoption. It is doing this without declaring the conflict of interest of the Council’s SMDF members. It is the fiduciary duty of corporate directors to avoid conflicts and they are further bound to disclose them.

The proposal is of doubtful legality. The SMDF, the Council of the Law Society says, is a private independent body, not controlled by the Law Society. The funding of the SMDF bailout will not be voluntary. It will be enforced by a planned refusal of the Law Society to make it a condition, of the receipt of an annual practicing certificate, that solicitors pay a levy for the bailout.

The Council has, it says, received legal advice from Counsel that the proposal is lawful. It has not disclosed that advice to the members, and clearly the Council has no intention of disclosing it now. It is not credible, without full disclosure, that the Council has such advice.

The claimed source of the law validating or empowering the proposal is Section 26 of the Solicitors (Amendment) Act 1994. A bailout of the SMDF was never in the contemplation of the Oireachtas in passing Section 26. None of the provisions of Section 26 authorise the Council’s proposal. Indeed, special mention, in Section 26, had to be made of SMDF because it does not fit with an essential ruling idea in the Section; that solicitors be indemnified. An indemnity, legally, implies a right to indemnity, usually in contract. It is generally admitted that the members of SMDF have, and had, no right to indemnity from SMDF; its benefits were available only at the discretion of the directors of SMDF.

There is something more immediate to throw the Council’s proposal into questionable light; is the SMDF insolvent?

The Council asserts it is, but there are reasons to doubt this. The Council itself discloses that the regulations governing SMDF preclude the SMDF directors from making any payment resulting in insolvency. In addition, the SMDF itself has not claimed it is insolvent. This is not surprising because there could be malign consequences for the directors of SMDF if that were the case. The issue is not a minor one; much of the Council’s case is predicated on the un-foreseeability of the actions of the inevitable liquidator of SMDF. But, if there is no insolvency, there is not likely to be a liquidator. (For lawyers, “insolvent” has a precise meaning; that the entity is unable to pay its debts when they fall due.) A letter from SMDF to some practitioners dated 27^th May 2011 is confirmation that SMDF is not insolvent; it says…

”It should be understood that the Fund has no immediate difficulties…”

If there is a problem in the SMDF, why do its members, including those on the Council of the Law Society, not solve their own private problem?

Even if the SMDF is not insolvent, it is possibly suggesting that it will not pay out on some at least of valid claims against solicitor members of the SMDF. Why do the members not top-up the “mutual fund” that is the SMDF, to meet those claims? On the figures provided by the SMDF, this would cost the members approximately €1000 per year. According to the Council of the Law Society, the prospects of them agreeing to this are “slim”, but they have not been tested.

Separately, the members of the SMDF could seek real professional indemnity insurance elsewhere. They will have to do this anyway at the end of the current year; the SMDF says it will not take on any business after this year; (we now see “business” here is a misnomer).

If SMDF members have poor claims histories they can apply to enter the “Assigned Risks Pool”, a device provided for in the Solicitors (Amendment) Act 1994. This allows solicitors with very poor claims records to continue in practise.

Consequently, there is no immediate problem. According to the SMDF, it has re-insured 100% of the risks for this year. In previous years it re-insured 90% of the risks. We do not, in the light of those facts, know why SMDF is taking the extreme step of ceasing “business” at the end of this year, but it is.

Here again, the Council of the Law Society has failed to properly inform the members as to what the problem is, and its implications.

The members of the Law Society should vote no to the Council’s proposal.

The Council of the Law Society probably harbours people with mixed motives for proposing the bailout of the SMDF, but none can gainsay the fact that the appeal to the members of the Law Society is an appeal to them to conspire in their own humiliation.

The Law Society is entrenched in a conventional intellectual assumption that the Society is unlike other bodies and, at bottom, better. This view is, paradoxically, at odds with the fact that the Society has in the relatively recent past striven to grasp at manufactured heritage (the purchase of the Kings Hospital in Blackhall Place), a sure sign of insecurity.

A person of even moderate vision, not blinded by personal interest would see that the humiliation of an entire profession is against the real interests of that profession.

Consider; the Council shows no sign of devoting energy to meeting the challenge of the IMF/ECB bailout terms; instead it is navel gazing at a failed project of the past.

Whatever it may do, the Law Society of Ireland may not levy the bailout of the SMDF on solicitors, conditional on giving the annual practising certificate. Asked why the Law Society of Ireland would not  cite the legal basis for the claim that it could so, Mr. Gilhooly, the Law Society’s designated spokesman replied;

@Tupp_Ed it already has. S.26 of 1994 act gives power for levy. Specific legal advice from Bryan Murray s.c. C docs sent out with sgm notice

January 1, 1970 12:59 am via Twitter for iPhoneReplyRetweetFavorite

@DSBAPresident

Stuart Gilhooly

To find out what the Law Society may do in relation to PI insurance for solicitors, just read Section 26 of the Solicitors (Amendment) Act 1994;

Section 26 (1) authorises the Society to make regulations “making provision for indemnity” against losses…incurred by…solicitors…”. [A bailout of SMDF is not within this provision.]

Section 26 (2) lists some of the things the Society may provide for. [None of these things fall within the current bailout proposal.]

Section 26 (3) gives a general power to the Society to do things to facilitate the implementation of the other powers vested in the Society under the Section. (“…indemnity within the section…”). [It is not a free standing power to do what the Society wants; it must refer to some other power of the Society and facilitate the exercise of that power.] This is a typical example of what is commonly termed “sweeping up words” in legislation. Bennion on Statutory Interpretation [5th Ed., p. 255] says;

“A power to do something extends only to that thing. Its purported exercise extending to a different thing is to that extent not an exercise of the power at all: ‘the power exercised must be the power conferred’.

Section 26 (4) stipulates some of the conditions the Society may set, relating to the insurance indemnity of solicitors. [None of these things fall within the current bailout proposal.]

PS It is fully acknowledged by the Law Society that payments by SMDF to cover the liabilities of its members are discretionary. Consequently, “SMDF” and “indemnity” are mutually exclusive terms.

Think about it.

Now, re-read Section 26.

The Council of the Law Society, many, if not all, of whom are members of the SMDF considered whether they could compel SMDF members to bailout the SMDF themselves. They decided they could not.

However, they decided they could compel members of the Law Society to do so. They have identified the pressure point on Law Society members as the annual practising certificate. Without the certificate a solicitor cannot practise. They propose to refuse a certificate unless the solicitor pays the bailout cost.

This assumes that the delivery of the certificate is a gift or a grant from the Law Society; it is not. The furnishing of the certificate is an act of the executive power of the State; the Law Society is simply an agent of the State in the transaction. It has no right to deny the certificate to a qualified solicitor. In furnishing the certificate it is following the provisions of legislation for the granting of certificates.

That legislation confers no power on the Law Society to extort its members to bailout a private, dodgy, financial services provider, the SMDF.

The Council of the Law Society is about to crash and burn, whatever the outcome of the postal poll.

On the 13th April 2011 the Council of the Law Society unanimously decided … to convene an EGM of the members of the Law Society and… recommended to support SMDF financially… up to a maximum of €16 million…

Following the failure to achieve their objective in the EGM, the matter was remitted to a postal poll of Law Society members. The Council is promoting the proposal in the poll and is using the resources of the Law Society to ensure acceptance.

A large number of the Council members are members of the SMDF. Their personal interests require that the proposal be adopted. Those personal interests arise from membership of SMDF, not as ordinary members of the Law Society.

Council members are fiduciaries and the applicable law is clear;

“..it is an inflexible rule of the Court of Equity that a person in a fiduciary position… is not, unless expressly provided, entitled to put himself in a position where his interest and his duty conflict.”

[Bray v Ford (1896 AC 44)]

It is a breach of corporate law and good governance to allow such a situation to arise, Even if the proposal is carried, it is open to challenge in the High Court because of the breach of fiduciary duty by the Council.

It is worthwhile looking at the profile of member firms in the SMDF. This is set out in the 2009 Annual report of SMDF, seen HERE.

A little more than one third were sole practitioners. The majority were mid-range firms. These firms have a stability, a solidity to them. They are profitable.

They are the firms failing to bailout their fund, the SMDF.

According to their spokesman;

“The chances of SMDF members voluntarily contributing to a bailout are “very slim””

Instead, they have decided to off-load the burden of the bailout on their fellow solicitors in the Law Society.

Furthermore they have captured the Council of the Law Society and are using the resources of the Law Society to promote their personal interests.

They have no interest in justifying the proposed SMDF bailout by reference to statute. Even it they did, they would have a problem; there is no statutory power in the Law Society to levy a bailout of the SMDF on Law Society members.

If the solicitors in the SMDF convene an EGM they can, in most conceivable circumstances, act as they decide.

If the solicitors in the Law Society pass the proposed SMDF bailout resolution they can act on it only if the Law Society has statutory authority to do what the resolution proposes. The reason is this; it would be unlawful to deprive a solicitor of his or her livelihood simply because he or she declined to contribute to the Law Society’s favourite charity, the SMDF.

The Law Society does not have that statutory power.

It would cause phenomenal reputational damage to the solicitors’ profession if it is later demonstrated that the Law Society does not and did not have the legal authority to compel solicitors to bailout the SMDF.

There are two sensible things the Council of the Law Society should do urgently.

1. Cite the presumed statutory authority for the Council’s bailout plan;

2. Change plan and convene an EGM of SMDF members to have those members bailout their own private company.

The Council members who are SMDF members could easily procure the EGM meeting. At a minimum it would be instructive if the SMDF declines its own bailout