solicitor

See HERE for a post on the possibility of difficulties with insurance companies. Readers might like to know of the provisions of Section 55 (3) (f) of the Consumer Protection Act 2007.

It reads:

“55.- (3) A trader shall not engage in any of the following commercial practices:

… (d) in relation to a consumer’s claim on an insurance policy, doing either or both of the following:
(i) requiring the consumer to produce documents irrelevant to the validity of the claim;
(ii) persistently failing to respond to the consumer’s correspondence on the matter, in order to dissuade the consumer from exercising contractual rights in respect of that claim;…”

Practically, when you get this kind of run-around, phone your solicitor.

Solicitors acting for land/building purchasers deliver “Requisitions on Title” to the vendors. The requisitions are direct questions addressing a range of issues of possible concern. Now that there is little or no conveyancing to be done it would be best to look at the process now and again to keep it fresh in the mind of the profession.

So, what to answer if asked,

Given its position, please confirm that the property has never suffered from flooding.”

Well, in this case HERE the reply was:-

Our clients confirm that the property has never suffered from flooding during their 14-year occupation.”

The sale closed and the purchasers found that the Thames river (at the bottom of the garden) flooded the property.

The purchasers have sued the vendors; the case is ongoing.

In cross-examination the vendor emphatically denies misleading the purchasers; he meant “the building” when he referred to “the property”. The building had never been flooded; just the garden, and that less than claimed by the purchasers.

So, Irish conveyancers, my reply to that purchaser’s requisition would have been:-

this is not a requisition on title”

On receipt of rejoinders my reply would have been:-

purchasers should make their own enquiries”.

We in Ireland have a precedent for this case and consequently practitioners should wake up when they see the reference to “the Vendors…say…..” in replies to requisitions.

Vendors often say more than their prayers.

Yesterday was emergency mini budget day.

In fact, it was emergency maxi budget day and some of you will be no longer driving (because you can’t afford it), and may be cycling everywhere.

In case you decide to cycle from the pub, see Section 51 of the Road Traffic Act 1961.

“51.—(1) A person shall not, in a public place—

( a ) drive or attempt to drive, or be in charge of, animal-drawn vehicle, or

( b ) drive or attempt to drive a pedal cycle,

while he is under the influence of intoxicating liquor or a drug to such an extent as to be incapable of having proper control of the vehicle or cycle.”

Marc S. Dreier, a New York attorney has been arrested. He, among other things, (allegedly) passed himself off as, variously, representing persons he did not, being a person he was not and having authority he did not have.

The US authorities have taken a dim view of this and he is currently held without bail.

His firm on Park Avenue, New York, has filed for bankruptcy and the staff are fleeing the offices without their wages.

One wonders what would happen to him in Ireland.

The greater proportion of criminal proceedings in Ireland is conducted in the District Court. The jurisdiction of the District Court is limited in the penalties it may impose. It is a court of summary jurisdiction. Summary jurisdiction means that the court may, pursuant to statute, deal with the charge against the defendant without recourse to a jury trial.

Under Article 38 of the Constitution of Ireland, a trial of an offence, which is not a minor offence, must be before a jury. Therefore, to invoke the summary jurisdiction of the District Court an offence must be a minor offence. There is no settled definition of a minor offence. It has been accepted by the Supreme Court that an offence attracting a maximum of 12 months in jail is a minor offence. The Supreme Court, obversely, has declared that an offence attracting a maximum of 2 years in jail is not a minor offence. (Mallon v Minister for Agriculture, Food and Forestry [1996] 1 IR 517).

In a summary trial of a non-minor offence, the District Court’s sentencing power is limited to 12 months’ imprisonment and a fine of €1,270 ( s.17 of the Criminal Justice Act 1967).

However, it is open to a District Court judge to impose a sentence consecutive to a previous sentence, subject to a limit of two years in total. (Section 5 of the Criminal Justice Act 1951 (as amended by s. 12(1) of the Criminal Justice Act 1984)).

Solicitors predominate in the supply of defence legal representation in the District Court. Typically the solicitor is on the Legal Aid panel. In the major cities he/she may specialise in criminal law practice, effectively to the exclusion of other types of business.

Where the court accedes to a request to certify an entitlement to Legal Aid for a defendant, it will almost invariably assign the solicitor of the defendant’s choice. In The State (Freeman) v. Connellan [1986] I.R. 433 the High Court found that the placing on the defendant of an onus to establish why he wanted a particular solicitor was “unnecessarily and unreasonably restrictive”.

A summary charge is not always a straightforward one. In addition, a trial may involve the consideration of many charges against a defendant. Where the defendant is paying for his/her defence and can afford the expense, it is open to him/her to engage the services of a barrister experienced in criminal law proceedings, in addition to the solicitor.

However, where the defendant is entitled to Legal Aid and has chosen his/her solicitor for representation in summary proceedings, under Section 2 of the Criminal Justice (Legal Aid) Act, 1962, he/she is not entitled to representation by a barrister.

This was the issue in Carmody v Minister for Justice, Equality and Law Reform [2005] IEHC.

The court found that as a matter of probability, a defendant will be afforded a fair trial in summary proceedings in the District Court while represented solely by a solicitor.

The Plaintiff had sought a declaration of incompatibility of Section 2 of the Criminal Justice (Legal Aid) Act, 1962 with the European Convention on Human Rights, specifically articles 5, 6 and 14 of the Convention and article 1 of Protocol No. 11. The court found that the substance of the Plaintiff’s claim was in respect of the right to a fair trial provided under article 6.

The court declined the declaration of incompatibility and went on to find that Section 2 of the Criminal Justice (Legal Aid) Act, 1962 was not in breach of the provisions of the Irish constitution specifically Articles 38.1, 40.1, 40.3.1, 40.3.2, and 40.4.1.

I have written on the subject of standard contracts HERE and HERE.

The most valuable standard contract most often encountered in ordinary life is the one used by solicitors for the sale and purchase of a house. It is the work of the conveyancing committee of the Law Society.

It is the work of many people over many years. It embodies the experience gleaned from many thousands of transactions.

No solicitor will readily depart from the scheme it represents. It contemplates that the Vendor will hand over the title deeds and the key of the property in return for the purchase money. The desire of the purchaser to get possession and the desire of the Vendor to get the purchase money is what drives the transaction.

To hand over the key beforehand is to hand over possession. If a purchaser gets possession before parting with the purchase money there is a great temptation to evade or delay the handing over of the purchase money, at least until it suits the purchaser.

Thus, a prior representation that the Vendor will hand over the key before the closing of the transaction will not be complied with. It will be reneged on.

This is not a breach of agreement; the agreement is in the contract. If provision is not made in writing that possession will be furnished prior to the closing, there will be no obligation to do so.

Apropos cost overruns, it is interesting to note HERE that when Siemens hits a delay on a project in China and, elsewhere, defects on a project in Budapest it suffers a loss of €200 million, but when roads cost more in the UK the taxpayer takes the loss. Who, in the name of goodness, does the UK Roads Authority use to write its contracts?

Should we not ask our Irish ambassador in China to procure a copy of the Siemens contract and urgently check with the National Roads Authority for an assurance that their contract writer is not the same one as used by the UK Highways Agency?

I have written (HERE) of the need for speed in challenging the award of a public contract where the provisions of the Regulations governing such contracts have not been followed. (European Communities (Award of Public Authorities’ Contracts) Regulations 2006 (Statutory Instrument No. 329 of 2006) ).

The Regulations expressly embody a good idea; that the nation get the best value for money. It is not easy to ensure this.

For instance, one assumes the contract for the “regeneration�? of Ballymun was awarded on the criteria adopted in the 2006 Regulations (not pursuant to them; they post-date the Ballymun contract).

We now see (HERE) that the Ballymun contract is €500 million over budget.
Who can now say that the seemingly more expensive underbidder was not in fact the cheaper of the bids? (Assuming there was an underbidder).

The problem is endemic in such contracts (especially in IT contracts).

In truth, neither the contractors nor the public authorities seeking tenders genuinely know what the costs of such projects are; the tenders are guesses.

The man who built the Empire State building in New York was asked what the most important element was in the construction; he replied, “getting the contract�?.

Following that line of thought, the best guess is the one that seeks, not to estimate the actual cost of the project, but to guess the cost projection of the public authority for the project. That will secure the contract.

It is possible to try and ensure that the cost overruns do not fall to the account of the public, but that, too, seems to be hard to avoid as we see in the Metronet debacle HERE and HERE.

What Transport for London seemed to have overlooked was the freedom of the individual members of the Metronet consortium to become sub-contractors (they gave the contracts to themselves) When Metronet went into administration, Transport for London continued answerable for the claims of those sub-contractors.

It is an important element in the negotiation of such contracts to ensure, to the greatest extent possible, that there will be no re-negotiation of the contract later. The World Bank has this to say on the matter:

8.3.1Avoiding renegotiations
According to one study,55 percent ofwater concessions awarded in Latin America were renegotiated in the 1990s,many within two years ofthe award (Guasch 2004). In some cases, the operator or contracting authority may reasonably refuse to renegotiate.Moreover,developing a reputation for being hard-nosed could reduce the likelihood that the contracting authority will be exposed to opportunistic behavior in the future. In other cases,circumstances may have changed in ways that mean the current arrangements are no longer appropriate,and renegotiation can help both parties.
Often,both the contracting authority and the operator have strong incentives to renegotiate rather than terminate the arrangement:contracting authorities are often concerned that terminating the arrangement may result in an interruption to key services,while operators do not want to lose any past investment or future profit. Yet renegotiation changes a previously agreed arrangement.The contracting authority or the operator may try to renegotiate in order to reduce its risk exposure or to gain advantages it was unable to obtain in the initial agreement (Box 8.1).When the operator is selected based on the lowest tariff bid or highest concession payment,operators may engage in aggressive bidding strategies (lowballing) to win the contract and then seek to renegotiate for more favorable terms once competitive pressure is no longer an effective constraint.

Modern governments have phenomenal spending power. Like a householder, they need to engage tradesmen and professionals of various types to do work the State needs done.

You want a new motorway? Here is a company to build it. You want a new harbour? Here is a company to dig it. You want a contract drafted for the motorway construction to secure your interests and ensure you get value for money? Here is the solicitor to write it for you.

These contracts are very valuable. They allow the person to whom the contract is awarded to, at the very least, pay the wages of the staff of the successful tendering company, say, during slack industry trading periods.

They also represent opportunities for pork-barrel politics. The politician who formulates and guides the policy resulting in the decision to have a motorway in the first place and then the decision as to who will get the contract, wields enormous power. The exercise of that power can secure re-election by the votes of grateful beneficiaries or the money to win those votes in an election.

Clearly, they represent opportunities for criminal activity in the form of fraud and corruption.

That aside, the State, as a major economic engine, can “distort�? the free market in goods and services. The European Union is professedly wedded to ensuring such markets, as are of a minimum size, will be free.

Consequently, EU member states are obliged to adjust their national law to conform to Directive 2004/18/EC intended to ensure only economic considerations (broadly defined) are the determining factor in the awarding of those public contracts which reach the threshold limit.

(HERE is a reference to an Irish-related case dealing with the obligation to advertise (or not!), that the contract is available.)

Ireland passed European Communities (Award of Public Authorities’ Contracts) Regulations 2006 (Statutory Instrument No. 329 of 2006) to comply with its EU obligations in this regard.

The Regulations are legally binding on the awarding authority. In Chapter 3 there is set out the basis for the awarding of the contracts:

Criteria for the award of a public contract

66. (1) A contracting authority shall, in awarding a public contract on the basis of the tender that is most economically advantageous to it, adopt criteria linked to the subject matter of the contract.

(2) Except as provided by paragraph (1), a contracting authority shall award a public contract on the basis of the lowest price.

(3) For the purpose of paragraph (1), the criteria may include (but are not limited to)―
· quality,
· price,
· technical merit,
· aesthetic and functional characteristics,
· environmental characteristics,
· running costs,
· cost-effectiveness,
· after-sales service and technical assistance, and
· delivery date and delivery period or period of completion.

(4) The contracting authority shall specify in the relevant contract notice or contract documents or, in the case of a competitive dialogue, in the relevant descriptive document, the relative weighting that it gives to each of the criteria chosen to determine the most economically advantageous tender. That weighting can be expressed by providing for a range within an appropriate maximum spread.

If an unsuccessful party wishes to challenge the legality of the award of a public procurement contract it is necessary to do so as quickly as possible.
Failure to act swiftly will preclude the applicant from relief. (See HERE).

The Irish property market has slowed if not stopped. According to the Irish Times the construction sector owes €100 billion to Irish banks.

In these circumstances there will be considerable pressure to avoid making due payment on contracts, not to speak of an inability to absorb the cost of contractors’ or developers’ errors.

In short, the frequency of disputes in the sector is sure to rise.

At the retail level they will not get to the level of the scandal in Spain, where the Guardian reported:

Britons are being scared off buying property on Spain’s Mediterranean coast, with the number of potential buyers plummeting after a series of corruption and planning scandals and the announcement of plans to demolish thousands of illegally built homes.�?

They will, however, get to the level where subsidiary agreements will appear and misunderstandings will grow.

The standard source of building agreements in Ireland is the suite of contracts devised by the Royal Institute of Architects in Ireland, some of which are listed HERE.

In the UK the standard source of building agreements is the suite of contracts devised by the Joint Contracts Tribunal Ltd. listed and downloadable HERE.

For Irish sub-contractors (nominated) the Construction Industry Federation form is used.

What happens when the disputes break out? That depends on the form of contract and indeed, the terms of the contract.

Many parties to these disputes fail to understand that the dispute is a legal dispute and that the terms of the agreement will, in principle, if not in practice, dictate the outcome of the dispute. In short, the contract is the source of the parties’ rights and obligations and the dispute will consist of teasing out the point on which one of the parties failed in its legal obligations, as defined by the contract/s.

This is not to say that parties can and do settle disputes on a practical basis, rather than a legal basis.

When this happens the experience can resemble THERAPY rather than law.

It is important to recognize that the expense of construction (which is considerable) carries the hidden reciprocal cost of the dispute and that the parties should budget for spending that money if and when the dispute breaks out. If that is budgeted for there will be a minimized loss of momentum in driving the dispute resolution process to an early conclusion.