UK: Navigate The Professional Disputes Landscape In Ireland – Your Questions Answered

1.

Does the court system have features which benefit defendants in PI claims?

GUIDE

The main court for hearing civil commercial claims, including PI claims, in Ireland is the High Court, which has full original jurisdiction to hear all forms of civil dispute, using a common law system. The High Court hears commercial cases where the claim exceeds EUR 75,000, with the Circuit Court dealing with claims between EUR 15,001 – EUR 75,000 and the District Court adjudicating on matters up to EUR 15,000.

Commercial cases such as PI disputes are heard on an adversarial basis before a single judge without a jury, with High Court decisions constituting binding precedent unless overruled by the High Court or a superior Court (Court of Appeal/Supreme Court) subsequently. Appeals are possible from the High Court on points of fact or law to the Court of Appeal, and from the Court of Appeal on points of law to the Supreme Court. Interim remedies, such as injunctions and freezing orders, can also be sought in support of commercial (including PI) proceedings.

Ireland does not currently have a pre-action protocol for PI claims against defendant professionals, so there is no formal requirement that parties engage with each other substantively, whether through ADR or otherwise, prior to formal Court proceedings being commenced.

However, there is a costs-related requirement that a Plaintiff must receive written confirmation from an appropriate expert in the field that the relevant professional has been negligent before commencing proceedings; if not, that will have adverse costs consequences at the end of trial.

Most PI cases – certainly those that involve amounts in excess of €1m – can be admitted on application to the High Court's Commercial List. Cases in that List are case managed by an experienced commercial judge, with deadlines imposed for the exchange of pleadings, discovery, exchanges of witness statements and expert reports. The List generally deals with proceedings from beginning to end within approximately 1 year, compared to over 2 years in the regular High Court Non-Jury List.

Revised Pre-Trial Procedure, and Conduct of High Court Trial, rules were introduced on 1 October 2016 for the High Court Non-Jury List, which is the List into which PI cases are usually allocated.

The Pre-Trial Procedure rules - which essentially provide for judicial pre-trial directions regarding time-limits for exchange of pleadings (with costs consequences for breach), Case Management Conferences, Pre-Trial Conferences, and the preparation/exchange of written witness statements and expert reports at least 30 days prior to trial - have not yet been put into effect pending adequate judicial resourcing. Once in effect, those rules should produce a more structured and efficient pre-trial process for PI cases, thereby benefitting both Plaintiffs and Defendants.

The separate Conduct of Trial rules, which have been operational since 1 October 2016, govern (amongst other things) expert evidence at trial. Specifically, there is now a restriction of expert evidence to "that which is reasonably required to enable the Court to determine the proceedings". To that end, Order 39 Rule 58 of the Rules of the Superior Courts (RSC) provides the List/Trial Judge with wide powers of direction, including the power to order that evidence be given by a single joint expert. Rule 58 further provides that each party may offer evidence from one expert only on a particular issue unless the Court permits otherwise for a "special reason". Parties may now also put concise written questions to an expert retained by another party, or a single joint expert, within twenty-eight days of receipt of an expert report. However, the purpose of the questions can only be for clarification of the report, unless the Court permits otherwise or the other party agrees.

Additionally, under Order 39 Rules 60 and 61 RSC, where the expert reports of the various parties may contradict each other, the Judge chairing the pre-trial conference – via motion on notice from any party, or of his/her own volition - may require that:

1. the experts meet privately, without the presence of any party or any legal representative, to discuss their proposed evidence;

1. draw up a joint report identifying the evidence that is agreed and disputed between them, to be furnished to the trial Judge and the parties.

The Trial Judge, on considering the joint report, may "at any appropriate stage of the trial" apply a "debate among experts" (or "hot tubbing") procedure i.e. each sworn expert first summarises what is agreed and then presents on the points which are not agreed, with a debate following between the experts before the Trial Judge (with the Judge essentially acting as umpire).

Order 36 Rule 42 RSC now also provides, pursuant to the Conduct of Trial rules, that the Court, or an officer of the Court, can require a "reasoned estimate" as regards:

1. the length of the trial;
2. a list of witnesses intended to be called by that party; and
3. the time for examining and cross-examining witnesses.

The Trial Judge is authorised to limit the time allowed for opening and closing statements, examination, cross examination and re-examination of a witness. The overriding objective is to prevent the common scenario of trial estimates being overrun through the manner in which the trial is ultimately conducted.

In sum, as it is expert preparation and expert evidence that can contribute significantly to the costs and length of PI disputes, the above revised expert-related procedures (including the enforcement of trial estimates) contained in the Conduct of Trial rules have been benefitting since 1 October 2016, and are continuing to benefit, defendants in Irish PI claims.

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2.

Can ADR be used to resolve large PI disputes?

GUIDE

The Irish Courts are supportive of ADR procedures, including in PI matters.

In the first instance, the Courts accord primacy to arbitration clauses in commercial agreements, including agreements entered into by professionals. In this context Ireland's Arbitration Act 2010 is based on the UNCITRAL Model Law on International Commercial Arbitration. Pursuant to Article 8 thereof a Court before which an action is brought in a matter which is the subject of an arbitration agreement shall - if a party so requests prior to submitting its first pleading of substance to the Court - stay the Court proceedings and refer the matter to arbitration, unless the Court finds that the arbitration agreement is null and void, inoperative or incapable of being performed.

Aside from arbitration, the Irish Courts are supportive of other ADR procedures such as mediation. Order 56A of the Rules of the Superior Courts (RSC) permits a High Court judge, of his or her own motion or upon a request being made by one or both parties, to invite the parties to avail of an ADR process such as mediation, or to refer proceedings to that ADR process where the parties agree. The Court will suspend the ongoing proceedings to facilitate the parties in this context, with the ADR process being confidential from the Court.

Unlike section 15 of the Civil Liability and Courts Act 2004 (which is applicable in personal injuries actions only), Order 56A does not provide for compulsory mediation or ADR. Whether to engage in an ADR process if invited to do so by the Court remains a decision for the parties alone. However, under Order 99(1)(b) RSC, the Court may depart from the rule that costs follow the event where the court has invited the use of an ADR process pursuant to Order 56A, and the (ultimately) successful party has, "without good reason", failed to participate in that ADR process.

Additionally, the Mediation Act 2017 came into force in Ireland on 1 January 2018. It now imposes a statutory duty on Plaintiff (and Defendant) solicitors, prior to the commencement of proceedings, to highlight the advantages of mediation to their clients, which solicitors must sign a statutory declaration stating that they have advised their clients that mediation is an option.

This is applicable to all civil matters, including PI matters.

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3.

What are the relevant limitation periods applying to professional liability disputes?

GUIDE

The limitation period for contractual claims is six years from the date of breach of contract.

Claims in tort - such as negligence or negligent misstatement - must be brought within six years of accrual of the cause of action. A cause of action in negligence/for negligent misstatement will only accrue, and the 6 years will only begin to run, on the date that damage first occurs to the professional's client due the relevant professional's breach of duty.

An exception is found under section 71 of the Statute of Limitations 1957, which applies in circumstances where the relevant action is based on fraud of the defendant or his agent, or where the right of action is concealed by the fraud of any such person. In that case, the periods of limitation above shall not begin to run until the plaintiff has discovered the fraud, or could with reasonable diligence have discovered it.

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4.

How is litigation against defendants in professional liability cases funded?

GUIDE

While "no foal, no fee" arrangements by solicitors with their litigation clients are permissible, contingency fees in matters already in litigation are not allowed under Irish law.

Third party litigation funding is also prohibited in Ireland under the principles of maintenance and champerty. By a majority of 4-1 the Irish Supreme Court affirmed this prohibition in its 2017 decision in Persona Digital Telephony Limited & anor v The Minister for Public Enterprise Ireland & ors. In coming to its decision the Court examined previous Irish case law, case law from other jurisdictions and relevant legislative history. Accordingly, there will need to be new legislation if third party funding is to be permissible in Irish litigation.

However, the use of after-the-event (ATE) insurance by parties to litigation (including PI litigation) is permitted in Ireland. The Irish Court of Appeal in Greenclean Waste Management Ltd -v- Leahy p/a Maurice Leahy Wade & Company Solicitors recently confirmed that ATE insurance can permissibly protect a litigation party against the risk of being made to pay another party's costs should the relevant litigation be unsuccessful.

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5.

Can litigants with similar claims bring a form of collective action in a professional liability dispute? In what circumstances is this permitted?

GUIDE

Class action litigation, in which all cases bearing similar facts and legal issues against the same defendant(s) are dealt with in one collective action, with the outcome binding on all parties, is not possible in Ireland.

Instead, collective action is limited to representative actions and test cases:

1. Order 15 Rule 9 of the Rules of the Superior Courts (RSC) provides that when numerous persons have the "same interest", one person can represent and sue on behalf of all persons so interested. The critical limitation, however, is that actions in tort are excluded from the representative action procedure, which is therefore rarely used;
2. test cases arise where separate court actions are commenced as a result of the same factual circumstances. The "test case" is the first of these actions to be determined and will serve as the reference point when other similar cases are tried i.e. the test case ruling will be a binding precedent that the Court in subsequent, similar cases will have to follow unless the case in question is factually distinguishable.

The High Court has frequently suspended ongoing cases that have been filed before it pending the outcome of a test case, or a small number of test cases, as a means of efficiently handling large volumes of similar, separate actions arising out of the same set of facts. This was particularly evident in the Madoff litigation which involved numerous actions commenced in Ireland in 2008 against "feeder funds" to the Madoff organisation, which feeder funds were based in Ireland.

Owing to the emergence of a tracker mortgage scandal involving numerous Irish banks, and affecting thousands of tracker mortgage holders, in 2016/2017, a private members bill - the Multi-Party Actions Bill 2017 - was introduced before the Irish Parliament.

The Bill focuses on proceedings which involve multiple parties (whether plaintiffs or defendants) and which involve common or related issues of fact or law which, under the Bill, can be certified as a multi-party action by the Court. If the certification application is granted, the judge will grant a multi-party action order and a register will be established pursuant to criteria set out by the judge. To join the register, a party will have to apply to the relevant judge to be entered. The appointment of a lead solicitor can be agreed by the parties and in the event that the parties fail to agree the Court will so appoint. The costs of the action will be divided equally amongst the members of the register who are liable, jointly and severally, for costs.

As the current Bill lacks government support it is unlikely to find its way onto the Irish statute book. However, collective action reform may form part of the recommendations of Mr Justice Peter Kelly who is currently chairing a formal Review of Civil Justice Administration in Ireland, which Review commenced in March 2017 and whose recommendations are expected in 2019.

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Grading: 4

6.

How long does it take (on average) for a professional liability dispute to get to judgment after trial from issuance of a claim?

GUIDE

PI Cases in the High Court's Commercial List take, on average, less than one year to reach trial and judgment due to active case management via Court directions, albeit complex cases can take longer.

By contrast, a PI matter that is heard in the regular High Court Non-Jury List will take, on average, between 2-3 years to proceed to full trial and judgment, owing to the absence of active case management and the fact that the extension of time limits for service of pleadings/discovery can be agreed on consent between the parties. This situation will, however, change once the High Court Pre-Trial Procedure rules - which were introduced by statutory instrument on 1 October 2016, as referenced above, and which include judicial case management - are activated.

It should be noted that an application seeking case management directions can be brought in the President's List to accelerate regular High Court proceedings, albeit specific grounds justifying such an application - such as complexity, multiple parties or delays by the Plaintiff in advancing the case - need to be pleaded.

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7.

Will the courts recognise an agreement between the parties on jurisdiction and choice of law?

GUIDE

The Irish courts will generally recognise commercial parties' agreements on choice of jurisdiction and law. This is provided that:

1. mandatory legal provisions apply under the law/jurisdiction that might have been chosen (such as the right to be heard); and
2. the application of any relevant foreign legal provision is not manifestly incompatible with the public policy of Ireland.

Where the parties are both resident in the EU:

1. the recognition by the Irish Courts of choice of jurisdiction clauses is provided for under the Brussels I/II Regulations, which Regulations also govern rules on jurisdiction in contractual and tortious matters where there has been no advance choice of jurisdiction by the parties;
2. the recognition by the Irish Courts of choice of law clauses is provided for under the Rome I/II Regulations, which Regulations also govern rules on applicable law in contractual and tortious matters where there has been no advance choice of law by the parties.

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8.

Are there any circumstances in which damages will be awarded other than to compensate the claimant for loss suffered?

GUIDE

The Irish Courts have a discretion under s22 Courts Act 1981 to order the payment of interest on the whole or any part of any sum awarded to a party in litigation in respect of the whole or any part of the period between the date when the cause of action accrued and the date of the judgment. The rate of such "Courts Act interest", as fixed by reference to the Debtors (Ireland) Act 1840, was 8% per annum simple interest until 1 January 2017, with the rate reduced to 2% per annum since that date.

It is open to the Irish Courts to award exemplary/punitive damages to punish a defendant with a view to deterring not merely that defendant, but also the public more generally, from the form of behaviour that occasioned injury to the plaintiff.

Aggravated damages are also available which, unlike exemplary/punitive damages, are essentially compensatory in nature. Aggravated damages comprise an increased damages award in order to compensate the relevant plaintiff for, for example, the high-handed manner in which a wrong was committed by the defendant against the plaintiff, thereby unnecessarily occasioning distress to the plaintiff.

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9.

Are there any standard rules or presumptions as to who should bear the costs of litigation and, if so, what are they?

GUIDE

The unsuccessful party is generally ordered to pay the successful party's costs in Irish litigation.

There are two main categories of litigation costs:

1. "Party and Party" costs, which relate directly to the litigation and which are the usual measure of costs that the defeated party must pay as regards the other party's costs; and
2. "Solicitor and Client" costs, which are the costs owed by the client to its solicitor under contract.

The losing party will usually be responsible not only for their own costs but also for approximately 70% of the winning party's Party and Party (litigation-specific) costs.

In certain instances the Court has discretion as to costs and may, therefore, depart from the general position above. In deciding what order to make about costs, the Court can have regard to the conduct of the parties, including:

1. whether any admissible offers to settle had been made in the course of the litigation which the plaintiff failed to beat at trial, such as Calderbank offers (i.e. written offers to settle that are without prejudice save as to costs) or tender offers under Order 22 of the Rules of the Superior Courts; and
2. any refusal by a party to participate in ADR when invited to by the Court under Order 56A RSC (above).

It is very difficult as a defendant to obtain a security for costs order against an Irish or EU/EFTA resident individual. However, it is possible to acquire such an order against an Irish/non-Irish registered company or non-EU/EFTA resident individual provided the defendant has a prima facie defence and there is reason to believe the plaintiff will not be able to meet a costs order should it be unsuccessful at trial.

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10.

Is there a set of defined rules for the discovery/disclosure of documents and how broad are they?

GUIDE

Discovery of documentation for the purposes of Irish litigation is governed under Order 31 of the Rules of the Superior Courts (RSC).

Discovery occurs once pleadings have closed i.e. after the Statement of Claim, Defence and any Reply to a Defence have been served. At that stage each party issues a written request for discovery of hard copy and electronic documents that are within the possession, power or procurement of the other party insofar as they are relevant and necessary to the issues in the case i.e. which advance the requesting party's case, damage the other party's case, or may fairly lead to a train of enquiry having either of those two consequences.

Blanket discovery is not permitted: documentation must be requested by category, and the reasons for same must be set out by reference to the issues stated in the relevant pleadings.

If agreement cannot be reached, a notice of motion can be served on the other party seeking a Court order regarding the categories of discovery to be provided.

Discovery can also be sought from non-parties (voluntarily or by way of court order) to the extent that they hold documents relevant to the issues in the proceedings, albeit the requesting party must undertake to pay the reasonable expenses incurred by the non-party in producing the discovery sought, and which discovery cannot be used against that non-party to join them to the proceedings.

The parties can claim (subject to challenge) legal advice privilege, litigation privilege and "without prejudice" privilege. Documents attracting such privilege must be listed in the affidavit of discovery.

Under recent amendments to the Rules of the Superior Courts, RSC Order 31 Rule 30 now allows a litigation party to obtain information from a non-party, even if in non-documentary form. The pre-condition is that the relevant non-party information must not be available through non-party discovery or non-party interrogatories, nor be obtainable through a party to the proceedings. The information must also be likely to support the case of the party seeking the information or adversely affect the case of one of the other parties to the cause or matter.

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11.

How is evidence dealt with?

GUIDE

Parties are free to call oral and documentary evidence from their own witnesses and experts in commercial litigation proceedings, who are subjected to oral cross-examination by the other party at trial.

In cases admitted to the High Court Commercial List, the evidence of both experts and factual witnesses must be set out in witness statements which are exchanged prior to trial. In High Court claims that are not in the Commercial List, it was (and remains) the case that factual and expert witness reports are not exchanged in advance of trial, thus to some degree facilitating trial by ambush.

However, and as referenced in section 1 above, revised High Court (but not District or Circuit Court) pre-trial procedures were introduced on 1 October 2016. Under revised RSC Order 63C Rule 17 it is now provided that:

"... a party intending to rely on the oral evidence of a witness as to fact, or of an expert at trial, shall, not later than 30 days prior to the date of such trial (if not previously done or required to be done) serve upon the other party and file:

a. In the case of a witness as to fact, a written statement;

b. In the case of an expert, a written report

... containing the essential elements of that evidence signed and dated by the witness or expert, as the case may be ...".

It should be noted, however, that the revised pre-trial procedures - including Order 63C Rule 17 above - have not yet been fully activated.

A second statutory instrument which came into effect on 1 October 2016, and which has been activated, sets out new rules regarding the Conduct of Trials, including new procedures on the use of expert evidence at trial. New Rules 12 and 22 of Order 20 RSC now require that a Statement of Claim and Defence must:

(i) "disclose an intention to offer expert evidence";

(ii) "state succinctly the field of expertise"; and

(iii) describe "the matters on which expert evidence is intended or proposed to be offered".

The practical impact of this is that it will likely require the involvement of expert witnesses at the pleadings stage i.e. at a very early stage in the litigation process (albeit this is normal in the context of PI litigation).

Further rules in relation to Conduct of Trials as regards the use of expert evidence is set out in section 1 above.

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12.

Is negligence recognised as a cause of action against a professional?

GUIDE

Yes, the most common tort action against professionals in Ireland is for negligence, whether through negligent misstatement or the negligent supply of the service in question.

The boundaries limiting claims for professional negligence centre on the Plaintiff having to prove three basic elements:

1. that the professional owed a duty to the plaintiff in question to take reasonable care. The imposition of that duty depends on:
   1. reasonable foreseeability of harm to the plaintiff if negligence should occur;
   2. reasonable foreseeability of reliance by the plaintiff in question on the professional taking care in providing the service/statement; and
   3. whether it is "fair and reasonable" in all the circumstances that a duty should be imposed on the professional, in the view of the Court;
2. that he or she acted in breach of that duty by not providing a reasonable standard of care equating to what would be expected of objective professionals in the actual professional's position; and
3. that the breach was the causative of the plaintiff's loss.

The fact that the Irish Courts have an overall discretion as to whether to impose a duty of care through it having to be "fair and reasonable" to impose a duty in the actual circumstances of the case provides a restriction on negligence actions which permits them to be kept within reasonable boundaries.

The Irish Courts are extremely even-handed in according to all parties in an action, including professionals, every opportunity to make their case. We would not consider Ireland to be a jurisdiction which is demonstrably hostile to the defence of professionals.

That said, in the area of medical malpractice in particular – where pre-action protocols are now under consideration to curb a proliferation of litigation – there is a tendency for large awards against medical professionals.

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13.

Can damages be capped in contract?

GUIDE

In general the limitation by professionals of their liability, and damages recoverable against them, by way of contractual provision is permissible under Irish law, both as to category of loss and amount. However, it is not permissible:

1. in the context of fraud; nor
2. where the matter involves death or personal injury.

By way of example, regarding a solicitors' limitation of liability, section 44 of the Civil Law (Miscellaneous Provisions) Act 2008 permits an Irish solicitor to limit his/her liability to his/her client by contract. That liability can be limited to "an amount specified or referred to" in the contract with the client, which amount must not be less than the minimum level of professional indemnity insurance cover required by the Solicitors (Amendment) Act 1994 and associated regulations.

However, the 2008 Act expressly preserves the client's rights as a consumer (i.e. an entity that is not acting in the course of a trade or business) under the Sale of Goods and Supply of Services Act 1980 (as amended) and the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995. The latter legislation prevents a consumer being bound to a contract containing an unfair term i.e. a clause that causes a significant imbalance in the parties' rights and obligations to the detriment of the consumer, taking into account the nature of the services for which the contract was concluded.

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14.

Can a non-client sue a law firm for breach of professional liability?

GUIDE

A non-client third party can sue a law firm in the tort of negligence or negligent misstatement provided the three criteria outlined in section 12 above are satisfied. The "fair and reasonable" discretion of the Court as to whether or not to impose a duty of care on the law firm towards a third party applies as previously.

A notable example of a situation in which an Irish solicitor has been held to owe duties of care to non-clients is where the solicitor provides negligent advice or assistance to the maker or executor of a will (the maker or executor being the solicitor's contractual client) which advice/assistance operates to the foreseeable detriment of the intended beneficiary under the will. In such circumstances it has been held by the Irish Courts that the solicitor can owe a duty of care in tort to the beneficiary, despite the latter not being the solicitor's client.

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15.

How would you describe the overall litigation landscape, including for example, cultural, regulatory and litigation specific factors, for claims against lawyers. Is it relatively benign, or are professional negligence claims a significant and/or common issue for law firms?

GUIDE

While relatively benign in the period from 1998-2008, the collapse of Ireland's Celtic Tiger economy in late-2008 – largely fuelled by a sharp drop in property values triggered by a sudden lack of credit being available from banking institutions – led to a massive wave of professional negligence claims against solicitors acting for both banking and buyer/seller interests in both the residential and commercial property sectors. Indeed all professional actors in the conveyancing chain, including accountants, financial advisors, architects, engineers, surveyors and auctioneers/estate agents were similarly heavily impacted.

That litigation wave, which involved very substantial sums (in the tens of millions of Euro in some cases, had subsided by 2016, and the claims environment involving solicitors is currently relatively benign in light of the quickly improving conditions of the Irish economy.

However, the fact that solicitors in Ireland must maintain a minimum level of professional indemnity insurance – essentially for the protection of the public they serve – necessarily renders solicitors a clear target for litigation in the aftermath of any loss-making transaction. Further, increasing cyber-attacks directed against law firms, coupled with the May 2018 introduction of more stringent data protection regulations under GDPR, will be a potential source of both regulatory and litigation cost for law firms in Ireland going forward.

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16.

What is a ball-park figure (or range of figures) for the cost of defending a standard professional negligence claim, with mid-level quantum against a lawyer to (and including) trial in your jurisdiction? If costs are recoverable by the claimant should they win, what would be a ball-park figure (or range of figures) a defendant might expect to be required to pay?

GUIDE

The costs of defending an average three day High Court hearing against a solicitor by a client/third party in an amount of e.g. €500,000 would likely be in the region of €120,000 - €150,000 for solicitor defence costs, and €90,000 - €120,000 for barrister defence costs (i.e. €210,000 – €270,000 overall). This would include the preparation of full pleadings, discovery, pre-trial directions, preliminary motion hearings, briefing/preparing experts and factual witnesses, instructions to Counsel and attending at trial.

In general, costs follow the event i.e. the losing party will usually be responsible not only for its own defence costs but also for a substantial portion of the winning party's costs, usually being in the region of 70% thereof. Further details regarding costs in Irish litigation are set out in section 9 above.

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