Our Ref: EMcG Your Ref; 8th October 2012
Alan Shatter TD
Minister for Justice and Law Reform
St. Stephen’s Green
Re: Legal Services Regulation Bill 2011
I am writing this open letter to you about one element of your proposed legislation, the Legal Services Regulation Bill 2011. That element is the errors in the Bill, relating to legal costs.
What is wrong with your Bill, relating to legal costs? Well, it correctly assumes that some reform is needed in the area. Ever since early Victorian times, a solicitor has had obstacles put in his/her way to recover legal costs. You already know of those obstacles. Allied to that, the calculation of legal costs has been rendered so abstruse that even an expert like yourself has fallen foul of the rules applying to their calculation. See the judgment of the High Court in Gallagher, Shatter v De Valera (1983) HERE.
I do not think that your expertise has been improved with the passage of time since that judgment. You were wrong then and you are wrong now, for different reasons.
So, what IS wrong with your Bill?
1. Litigation is expensive. Nothing in your Bill will change that. Of course, your Bill may reduce legal costs from a category of “very expensive” to “expensive”, but it will not make those costs “affordable”.
2. Worse than that, the Bill ignores reality. It assumes that, in every litigation case, the solicitor’s client pays his or her legal costs. You and I know that that is not the norm.
3. In Ireland, and the UK, the judiciary, generally, follow a practice of awarding costs of the action to the victor.
4. This is a two edged sword. It makes litigation a very risky business; the costs, if you lose, are high. On the other hand, it encourages certain forms of litigation. It encourages victims of abuse of power to challenge their abuse. I am not just referring to abuse of power by office holders like yourself; I include abuses by people who have more money than the victim. It is easy to dominate people who lack the resources to fight back, particularly in a society like ours where, rightly, we insist that disputes are to be settled only in a court system and not by direct action.
5. Encouragement is not sufficient to deliver justice; for that, a victim also needs help from a lawyer or lawyers. If that help is not forthcoming the encouragement is a disservice. The victim might become a litigant without representation (a “lay litigant”). (There are more and more lay litigants appearing in the court system nowadays. They represent a serious problem for the courts, not least because a case with such a litigant takes much longer than otherwise).
6. A litigant, without representation by a lawyer, is gambling on winning and is increasing the chances of losing. At the same time the litigant is likely to suffer very high levels of stress.
7. Your Bill, overall, is likely to increase the number of lay litigants.
8. That fact alone is an indictment of you. It should be your primary duty to deliver justice to the citizens and residents of Ireland. The place where they get that justice is in court and you should facilitate that court justice. The major problem in this area is a lack of proper civil legal aid. A lay litigant is not a match for an opponent with legal representation. In short, the court system cannot run correctly without lawyers.
9. You and your predecessors have had your work done for you by Ireland’s lawyers. By “work”, I mean discharging your primary duty. Because the courts will award costs to successful plaintiffs Ireland’s lawyers consistently act for indigent plaintiffs who are victims of abuse of power. The plaintiffs are the clients of the lawyers, but they are clients who, generally, do not pay their own lawyer. Those lawyers assess and filter the injustices in our society and advance claims in court for people who otherwise would suffer injustice without redress. This “system” is inefficient. Practising lawyers cannot undermine their livelihood by taking all such cases on a “deferred fees” basis. They inevitably select those with the best chance of success. (They are the “marginal” cases beloved of economists.)
10. Your Bill fails to acknowledge this. Worse, it pretends that no such activity takes place. It pretends that you are the defender of those plaintiffs as they “pay” for those legal services.
11. The State has established, nominally, a system of civil legal aid. In practice that delivers, very slowly, legal services only to indigent family law litigants. Nobody knows this better than you; your livelihood, as a lawyer, has been derived from family law litigation representing persons who do not qualify for legal aid.
12. Who, then are the beneficiaries of your Bill’s provisions relating to legal costs? The litigants who lose are the beneficiaries.
13. Who are the litigants who lose? Ironically, lay litigants are, generally, losers, but the big losers are the companies in Ireland’s insurance industry, and, on occasion, the State. These are the most litigious parties in Ireland’s court system. It is inevitable, particularly in the case of the insurance companies, that they will lose. They are contractually obliged to indemnify their customers when claims are made against the customers. They, generally, cannot decline indemnity just because the customers’ actions are or were egregious and inflicted loss, injury and damage on innocent plaintiffs.
14. So, they should settle those claims. But they do not. At least, they do not settle enough of them. There are reasons for this, but this is not the moment to canvass those, disparate, reasons.
15. There is one reason worth mentioning; sometimes the insurance company or even its insured, calculate that the victim plaintiff is vulnerable to pressure. The available pressure to apply is the stress generated by litigation. Litigation and its oppressive costs are weapons in the contest between plaintiffs and defendants.
16. Your Bill is a contribution to that contest. You have weighed in on the side of the defendants and, consequently, will drive more injured victims beyond the “margin”.