Any solicitor should reasonably be glum now. No office will escape the consequences of Ireland’s financial troubles and, ignoring runes, we need only read the recent record of our neighbour, the UK, to see what those consequences might be.

Let’s start with the straightforward stuff; Thomas McGoldrick, a solicitor, stole £1.25 million from a client left paralysed (from the neck down) by a traffic accident. The judge sentenced him to ten years in jail. McGoldrick’s firm acted for the client in his personal injury action. McGoldrick met the client once and when the compensation was lodged in the client account McGoldrick treated it as his own, driving a Mercedes and Jaguar with personalised number plates and sending his children to expensive prep schools.

In the UK, as in Ireland, theft like this is, effectively, a charge on all solicitors; the Law Society Compensation Fund has to make good the loss.

Any normal person might go off the rails on hearing news like this. Take Esther Cunningham for example. She was defending her cousin on a dangerous dog prosecution but had to be escorted from court after kissing a solicitor, swearing at an usher and insulting the prosecutor while “fortified” with brandy. To her credit her legal representative said of her; “The forcible kissing of a solicitor is something that has been difficult to accept”. Who, among her colleagues, would not agree?

Distraction, even while remaining on the rails, so to speak, could also be easily foreseen following on such troubles. Consider how readily a solicitor, raffling a house, could forget to get a licence to run a lottery. The then-President of the Law Society , Paul Marsh warned his colleagues against launching prize draws because he feared that, as the recession deepened and house prices continued to fall, more people might be tempted to establish prize draws. He also feared that they could be used to conduct mortgage fraud or for money laundering. He pointed out that anyone found guilty of running an unlawful lottery faces a maximum sentence of 51 weeks in prison and/or a fine of up to £5,000 under the Gambling Act 2005.

One wonders whether Mr. Marsh was not himself distracted. Did he not know what many of his members were then doing? They were bribing people to get work for their firms.
A report described the practice in relation to the “miners’ scandal” in these terms;

“…some law firms charged fees to the miners out of their compensation awards. This “success fee” was often charged on the ground that the miner had been introduced to the solicitor by a claims handling company or trade union that had charged the solicitor to send the case to them.”

Bribing middlemen for work is the first step to full-time, big-time bribery. Get a scruffy office in Tottenham and become a bagman for Halliburton, delivering £100 million in bribes to Nigerian politicians. That’s a business model any Irish property developer would cheerfully take up. In this case it was a solicitor.

Strictly, as a business model it lacks something; the bribes are going in the wrong direction. Christopher Haan, a consultant solicitor knew that. Despite charging his client, Mr Abela £1.4 million in legal fees (on a share purchase), Mr Haan was clandestinely also advising a Mr Baadarani, who was selling his stake in the Italian company to Mr Abela. Mr. Haan got £400,000 from Mr. Baadarani.
“This is not a case of a technical conflict of interest,” Mr Abela’s, counsel told the court, “but of an intentional preferment of one client’s interests over another.”
Mr Haan’s actions, he said, were negligent, deceitful and a breach of contract towards Mr Abela, adding that simultaneously advising the buyer and seller of a company implied fraudulent or negligent misrepresentation.
Mr. Haan may have known what Mr. Seldon, another solicitor, did not know; that you can be pushed into retirement against your will (and will need every cent you can get).

Or, powerful vested interests lodge a complaint with your Regulator and, despite their tendentious objectives (the complainants were the opponents of the solicitor’s clients) you just survive the trial your Regulator puts you through.

Here in Ireland, being a Republic we, in theory, are no respecters of persons. Oops! Not so, perhaps.

In any event Michael Ford a client of Michael Napier, a former President of the Law Society lodged a complaint with the Law Society about Napier. Napier had represented Ford in a long case against Exxon Mobil, but Ford discovered that Napier’s firm had also been acting for Esso, a wholly owned subsidiary of Exxon.

Ford was not pleased about this. How could he now know that Napier did everything he could to vindicate his interests?

The complaint went nowhere fast. Only when it went to the Scottish Legal Complaints Commission did Ford get a hearing. The Commission found that the Law Society’s investigation was a systemic failure.

Too bad.

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.

Here are some issues not addressed so far (in the papers I read).

(A) Quinn Insurance has a board of Directors. Sean Quinn is not on that board. The board has said nothing about the seizure of the company by the Provisional Administrators. Sean Quinn never stops talking about it and issuing press releases and public statements, including TV interviews.

Is he in fact in charge of Quinn Insurance?

This is possible. Under Section 27 of the Companies Act 1990:-

“…a person in accordance with whose directions or instructions the directors of a company are accustomed to act (in this Act referred to as “a shadow director”) shall be treated for the purposes of this Part as a director of the company…”

Does the Financial Regulator know anything about this that we don’t?

(B) Quinn Insurance has been accepting professional indemnity business from British solicitors. The mind boggles. Every now and again a wave of mortgage fraud sweeps Britain. Irrespective of whether the solicitors are complicit, the claims are numerous and large. It is very difficult to calculate the proper premium to match the risk. It is not easy, either, to refuse indemnity; the insured solicitors can fight.

Many professionals (doctors, solicitors, dentists, architects, surveyors etc.) provide services to “consumers”.
Section 2 (1) of the Consumer Protection Act 2007 defines a consumer:

“” consumer ” means a natural person (whether in the State or not) who is acting for purposes unrelated to the person’s trade, business or profession;”

Services are covered by the Act of 2007 explicitly and under the definition of “product” which “means goods or services”.
The Act prohibits misleading commercial practices and provides:

“46.- (1) A commercial practice is misleading if the trader omits or conceals material information that the average consumer would need, in the context, to make an informed transactional decision…”

The Act defines “transactional decision” as:

” transactional decision ” means, in relation to a consumer transaction, any decision by the consumer concerning whether, how or on what terms to do, or refrain from doing, any of the following:
…(e) exercise a contractual right in relation to the product;”

Section 46 transposes the terms of Article 7 of the Unfair Commercial Practices Directive into Irish law. The section prohibits the omission or concealment of information and/or the provision of such information if it is… “unclear”… etc. Prior to Section 46 it was not statutorily misleading to withhold relevant information from a consumer. “Contractual right” includes the right to issue proceedings and to know the factual basis of that right. In short, Section 46 of the Act of 2007 appears to require of a “trader” that he/she/it disclose to a consumer facts necessary to ground a claim of negligence against the professional.
Previously, the nearest pertinent law on this was seen applied in Gough v Neary & Anor. [2003] IESC

Judge Goeghegan said in that case:

“The plaintiff did not know that contrary to the false information given to her the hysterectomy was unnecessary until late 1998 or, indeed, some time after that when as a consequence of media coverage in relation to Dr. Neary and hysterectomies which he had carried out on a number of patients in connection with birth deliveries, she acquired the knowledge that the operation was unnecessary. That being so and in the absence of authorities, I would be of opinion that the plea of statute bar must fail.”

The Consumer Protection Act 2007 appears to have moved the focus from the positive action of the Defendant to the deprived (of knowledge) state of the Plaintiff.
Concomitant rights of discovery would seem to follow in any litigation where the Plaintiff is a “consumer”. Current rules of court do not appear to recognize this.

Where the professional is in the building business (or is a builder), Section 46 of the Act of 2007 will affect the “contractual” duty on such a professional of making disclosure of defects in, say, design, even after the completion of the contract.
See New Islington New Islington and Hackney Housing Association Ltd v. Pollard Thomas and Edwards Ltd [2000] EWHC Technology 43.

Sometimes it is difficult for lawyers to recognize who is the boss.

In Kerr v Molloy and Sherry (Lough Egish) Ltd. [2006] IEHC 364, the defendant contended that the Plaintiff, a contract packer, was more experienced than his then supervisor, an assistant Operations manager and was therefore responsible for the accident in which he was injured. In fact he was working with the supervisor and gave evidence that he believed that the boxes they were stacking were improperly stacked and had informed the supervisor of this. The boxes fell on the Plaintiff. The defendant contended the Plaintiff should have refused to continue the work in the light of his perception. The judge said of this:

“At the hearing of this action, the claim of contributory negligence on the part of the Plaintiff was advanced on a single ground, that the Plaintiff had more experience in stacking these boxes in containers than Mr. O’Donoghue, so that, even though Mr. O’Donoghue was Assistant Operations Manager of the first named Defendant and, the Plaintiff a contract packer provided by the second named Defendant, the Plaintiff ought to have refused to continue with the work when Mr. O’Donoghue, for whatever reason, continued to build up the row of boxes without staggering the vertical spaces between the individual boxes. I find that the evidence did not support the contention that Mr. O’Donoghue had less experience in this work than the Plaintiff, so that he should be regarded as the helper and the Plaintiff found to be the person in charge of the operation. Mr. O’Donoghue’s own evidence clearly demonstrated that he had ample knowledge and very considerable experience of stacking these boxes in containers. In cross examination Mr. O’Donoghue accepted that he would not expect the Plaintiff to challenge him on any aspect of the job. The Plaintiff protested that having pointed out to Mr. O’Donoghue the possible danger involved in stacking the boxes in the manner in which he was doing it, he could hardly be expected to leave the job and go across to the office and complain to Mr. Bannigan, the Operations Manager. I find that it would be wholly unreasonable to expect the Plaintiff to do this.”

What is often overlooked on these occasions is the effect of a finding of breach of statutory duty against an employer.

On this point the judge said:

“In the Plenary Summons and in the Statement of Claim, the Plaintiff pleads his case both in negligence at common law and for breach of statutory duty pursuant to the provisions of the Safety, Health and Welfare at Work Act, 1989 and, in particular s. 6 and the Fifth Schedule of that Act. I find that the Plaintiff was not guilty of contributory negligence in relation to his claim based upon breach of statutory duty and is therefore entitled to succeed in full against the first named Defendant. It is unnecessary for the court in these circumstances to go on to consider the position in relation to his alternative claim based upon negligence at common law.”

This is a standard outcome of claims against employers by employees.

Generally, the liability of a solicitor (arising out of his/her professional practise) is unlimited. However, under Section 44 of the Civil Law (Miscellaneous Provisions) Act 2008, a solicitor may limit his/her liability to a degree not less than the current minimum sum for which a solicitor must carry insurance for (negligence) claims.

That figure is, currently, €1,500,000.

In W and M Wood (Haulage) Ltd. v Redpath [1967] 2 QB 520 the facts were these; a collision took place between a car and a lorry. It occurred on a straight stretch of road at night with no witnesses. The drivers and other occupants died. The available evidence was inconclusive as to fault. The court apportioned blame equally between the two drivers.

For more information see our Colour Supplement HERE

The revelation that Cardinal Brady was at the heart of a church hushing-up of crimes of Fr. Brendan Smyth prompts a reflection as to the malign uses of documents imposing confidentiality or curtailing rights.

In Byrne v Ryan [2007] IEHC 2007, the court considered a “consent” which a patient had signed prior to surgery. The Defendant referred to the terms of the consent suggesting that the Plaintiff might;

“…not become or remain sterile..”

The Defendant contended that this was a consent to the actual outcome of the sterilization operation (the operation had failed). The court rejected the argument, saying;

“It merely records the patient’s understanding that there is a possibility of failure.”

The courts have frequently rejected arguments that claims have been settled, as purportedly evidenced by “releases” signed by Plaintiffs.

In Horry v Tate & Lyle Refineries Ltd. [1982] 2 Lloyd’s reports 416, the Plaintiff suffered a personal injury at work. There was a possibility of a recurrence of the injury. The employer’s insurers negotiated a settlement with the Plaintiff who was not legally represented and was not independently advised. The injury did recur and the Plaintiff issued proceedings in respect of the original incident. The Defendants pleaded the “settlement”. The court ruled that the insurance company owed the Plaintiff a fiduciary duty of care to ensure that he got independent legal advice. They were also obliged to reveal the contents of their medical report on him, to him, and where their interests conflicted with his they owed him a fiduciary duty. Consequently, the settlement was not binding on him.

For more information see our Colour Supplement HERE

See the post “Gotcha?” below. In Clifford v Drymond [1976] RTR 134 CA the Plaintiff had been struck by a car at a pedestrian crossing. The court, accepting a calculation that the car that hit her had been traveling at not more than 30 mph and was about 75 ft. from the crossing when the Plaintiff began to cross, decided she had not been guilty of contributory negligence. She was 10 ft. onto the crossing when she was hit.

The appeal court found she was negligent to the extent of 20%. They said she should have allowed plenty of time to the car to stop or slow down and either saw the car or failed to see the car and was negligent in either event.

For more information see our Colour Supplement HERE

“The Green Cross Code” is for pedestrians.

The equivalent for motorists is more extensive. However, any amount of rules will be wasted if a driver has a defective attitude to his/her “rights”.

Long before the motorcar appeared, the roads were used by pedestrians and animals, particularly horses. It is within living memory that a large cattle market thrived at the top of Prussia St. on the North Circular Road in Dublin and the cattle were herded down the NCR to the docks for shipment to, usually, the UK. All that is gone now.

What motoring “entitlements” could be asserted in circumstances like that?

With the departure of the animals, only pedestrians remain to hinder the motorist. Pedestrians, being more malleable and responsive than animals, avoid offering themselves as a hindrance, for good reason.

Who has not been challenged by a motorist for having the temerity to walk across a T-junction, obstructing a turning car? Most pedestrians anticipate the car and yield to it, although the right of way generally rests with the pedestrian.

What hope, then, that a motorist would anticipate a momentary error by a pedestrian in a “refuge” on a dual carriageway? The self-same driver is, after all, in the “fast” lane as he/she zips past within inches of the pedestrian.

The fact is, a driver is obliged to drive in such a manner and at such a speed as to avoid a pedestrian who MAY step out onto the roadway. That implies that it is an obligation to SEE the pedestrian and, probably, to LOOK AT the pedestrian.

We see much of this in McDermott v McCormack [2010] IEHC 50.

The Defendant driver admitted he did not see the Plaintiff pedestrian. The Plaintiff was an admirable witness, given that he was thrown into the air by the Defendant’s taxi. The Defendant gave evidence of the Plaintiff’s head hitting his windscreen. The judgment does not record the Plaintiff’s evidence in detail on the point, but if it was tendered it would probably have been in terms of the Defendant’s windscreen hitting him on the head.

The case looks like one of excess of ambition by the defence. They were in possession of a report from a hospital showing the Plaintiff had been very drunk when the accident happened, but, as the judge remarked;

“…He was an alcoholic. Unfortunately, he still is. That does not disentitle him to damages.”

In the event the court found (without reference to the Green Cross Code, it not being law), the Plaintiff was 50% responsible for the accident (there was no crossing point on the road at the point of the accident) and reduced the damages from €266,758 to €133,379.

For more information see our Colour Supplement HERE