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Wednesday, August 24, 2016

Cost of going to court reinforces inequalities

Like a posh hotel, the civil courts are open to everyone, but only the wealthy can afford to go   there. Michael Clifford highlights some recent cases that show the prohibitive cost of justice

High Court Judge Mr Justice Max Barrett. Picture: Courtpix

Maureen Lawless is in her 70s and in danger of losing her home. She was not among those who made a disastrous decision to buy property during the years of the bubble. She did not drink herself into debt. She is not a gambler.
She did, however, take what in retrospect was a huge gamble. She sought justice through the courts on the basis that she felt she had been grievously wronged. Such a course of action is supposed to be a cherished right for citizens in a democracy. In truth, it’s a sham.
Last month, the High Court granted a judgement against Maureen Lawless for €176,433. This was money accumulated in legal fees by her former solicitor who had taken on her case in 2010. The case involved a land auction in which Ms Lawless felt she had been wronged. The case was subsequently settled. Ms Lawless had made an initial payment of €5,000 to the solicitor, Larry Burke of Cavan firm Burke, Hunt and Co, but hadn’t coughed up anything else since. The accumulated bill also included fees for a senior and junior counsel, coming to about €64,000.

At the hearing in which judge Max Barrett granted the judgement against Ms Lawless, she couldn’t even afford representation, the court heard. Judge Barrett also noted that she was in danger of losing her home as a result of her foray into the legal world. Despite all that, the judge said he was legally bound to grant the judgement. Ms Lawless was a competent adult who had retained legal counsel and that comes with a cost.
However, the judge is not an island and he couldn’t help noticing the injustice of a system alleged to be route to justice. Of the size of the fees he said: “These are enormous, though not at all untypical, fees which point to a continuing deficiency in our legal system… proper legal representation, at least in civil proceedings, is increasingly a boon that is properly affordable by the few who are rich, and a bane to be feared by the many who are not.”

That, in a nutshell, is the kernel of the scandal of legal fees in this country. The courts, like the Ritz, are open to everybody, but confined to the wealthy.
In this, the system in which civil law is administered serves not as a great leveller but an instrument to reinforce inequities in society.
Judge Barrett’s intervention in the Lawless case was the second time in recent months that he referenced the cost of going to court. In April, he ruled on an application for a firm to provide security of costs, which involves putting up money that can be used to pay legal fees in the event of losing an action.
The action involves a Cork-based training company called Euro Safety which is suing Solas, the state training agency which was formerly Fás. Euro Safety claims it has lost business as a result of blowing the whistle on bad practices in Fás in 2002, which led to a damning report on the state agency.
The Cork firm believes it is entitled to compensation for the manner in which its business has allegedly suffered.

In response, Solas asked the court to force Euro Safety to put up €600,000 as security in case it loses the case. This figure includes €220,000 in solicitor’s costs and €108,500 for a senior counsel for an estimated 20-day hearing. That’s over one hundred grand for the barrister for a month’s work.
The judge pointed out that Euro Safety did not have access to those kind of funds. “The case highlights, yet again, the need for a systemic solution to the present crushing cost of High Court litigation,” he said.
He refused the Solas application on the basis that the case was in the public interest. But what of a case that was just in the interests of a private company seeking justice?
Legal practitioners get all sniffy when judges like Barrett comment on what is plainly obvious before their eyes. It’s regarded as letting the side down or, more often, bad grace from somebody who toiled in the lucrative vineyard themselves before accepting a state job and plum pension. An alternative view might be that the bench provides a wider lens to examine what citizens are subjected to when they opt to go to court.
The sniffy attitude was also deployed against former Justice Minister Alan Shatter when he made attempts to reform the system. In parallel to his political career, Mr Shatter had enjoyed a lucrative legal one. And now he was spoiling the party for everybody else. Again, perhaps the former minister was in a position to look at the system from the point of view of citizens, rather than partitioners.
Mr Shatter’s grand plans were shredded through assiduous lobbying by the business and, while the former minister was not up to the job in other areas of his brief, his drive to reform the system was sadly lost on his departure from office. What emerged instead was a watered down Legal Services Regulation Act which is due to come into force in the coming months.

One of the few reforms in that act will ensure that costs will have to be more transparent. No longer will citizens find out well into a process that they have accumulated crippling debts.
The act makes provision for a review of fees, written notice in clear language, and a new set of principles for adjudicating on costs. The whole thing, however, is a long way from the changes initially envisaged by Shatter.
His plans were lifted to a large extent from an excellent Competition Authority report in 2006 which highlighted the problems with the restrictive practices and lack of transparency within the two arms of the business.

Another recent case illustrated another aspect to the charging of fees. Costs in a medical negligence case have been contested in both the High Court and the Court of Appeal over the last year. At issue are elements to the cost bill which include a claim for a solicitor’s instruction fee of €485,000, which the taxing master originally reduced to €276,000. The firm in question, Augustus Cullen Law of Wicklow appealed the ruling in the High Court, where it lost, and more recently in the Court of Appeal, where it won.
Another element of the costs was the fee for the senior counsel involved Denis McCullough. He had claimed a “brief fee” of €125,000, because of the “novelty and complexity” of the case. A brief fee is awarded for reading oneself into the case. Thereafter, his daily fee was €3,500 per day.
The court heard that Mr McCullough subsequently accepted a reduced brief fee of €65,000 and that was no longer contested. So the senior counsel accepted his fee to be about half what he had originally charged. This is not particularly unusual in the Law Library, and there is nothing whatsoever wrong with it.

But is there any other line of work where a practitioner simply drops their initial fee by about half for no particular reason other than its size is contested? One thing’s for sure, that’s nice work if you can get it.
Michael Clifford