D UB LIN SOLICITORS B AR ASSOCIATION MAGAZ INE | SUMMER 2021 | ISSU E 88
BUSINESS INTERRUPTION INSURANCE Lessons learned so far
PRESIDENT OF THE HIGH COURT MS. JUSTICE MARY IRVINE CROSS-EXAMINED DSBA PRESIDENT JOE O’MALLEY INTERVIEWED
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Summer 2021 dsba.ie
From the Editor
elcome to the summer Parchment where we have, among many articles, a trio of interviews. This edition has the honour of having an extended interview with Ms. Justice Mary Irvine, President of the High Court. Our DSBA President Joe O’Malley is interviewed, as is Dundrum practitioner Brendan Dillon. The DSBA has ranked highly in recent solicitor appointees as Senior Counsel. The Parchment extends its sincere congratulations to two former editors of this esteemed magazine, Keith Walsh and Stuart Gilhooly. Both Keith and Stuart are also former DSBA Presidents and together with Helen Sheehy and Geraldine Clarke, along with last year’s appointee Áine Hynes, it now means that ﬁve former DSBA Presidents have taken silk. We feature eight of the new appointees in this edition and all solicitor SCs are congratulated and wished well. The troubling introduction of negative interest rates by Irish banks to solicitors’ client accounts is a
big issue for the profession. The myriad of additional work now involved in allocating the correct interest rate liability to each client holding monies in a solicitor’s client account is a headache beyond all headaches. I set out my own personal experience of the issue in a commentary piece on Page 18. As we head towards the end of July and the end of term, colleagues will be looking forward to some well deserved down time and an opportunity to switch oﬀ from work for a short while and spend time with loved ones. It has been a most challenging year for us all and the profession is stronger for it. Have a great summer break.
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DSBA COUNCIL 2020/2021
JOE O’MALLEY DSBA President
DIEGO GALLAGHER DSBA Vice President
MATTHEW KENNY Treasurer
PAUL RYAN Chair of Commercial Law Committee
JOAN DORAN Chair of Mental Health & Capacity Committee
GERARD O’CONNELL Chair of the Parchment Committee
AVRIL MANGAN Chair of Family Law & Minors Committee
EDITOR John Geary PARCHMENT COMMITTEE Gerard O’Connell (Chair) Keith Walsh Áine Hynes Julie Doyle Kevin O’Higgins Stuart Gilhooly Joe O’Malley Killian Morris Robert Ryan COPYRIGHT The Dublin Solicitors Bar Association
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the Parchment 1
The Pandemic President
New Solicitor Senior Counsel
Stuart Gilhooly SC put on his mask and spoke to President of the High Court, Ms. Justice Mary Irvine
High Court Ward of Court Decision
Anthony Thuillier BL examines the procedures involved in issuing and serving proceedings and enforcing judgments post-Brexit
David Hickey reports on a tragic case from earlier this year
No Ordinary Joe
DSBA Submissions on Professional Indemnity Insurance
Current DSBA Supremo and Managing Partner of Hayes Solicitors Joe O’Malley sits down with Killian Morris to discuss law, life and the DSBA
The DSBA made Submissions to the LSRA and to the Law Society for the reforms of professional indemnity insurance
Cross-border insolvency after Brexit Eoin Martin BL opines that it has complicated how and when Irish and UK courts will recognise, or exercise jurisdiction over, crossborder insolvency matters
Dublin Solicitors Bar Association 1st Floor, 54 Dawson Street, Dublin 2, Ireland T: 01 670 6089 E: firstname.lastname@example.org W: www.dsba.ie
2 the Parchment
THE PANDEMIC PRESIDENT MS JUSTICE MARY IRVINE
The Parchment catches up with eight of the newly appointed Senior Counsel
I feel like I have been standing with a fire extinguisher in my hand since I arrived
Summer 2021 dsba.ie
REGULAR FEATURES 01 Editor’s Note 04 President’s Message 60 In Practice
Assisted Death – The Role of the Solicitor Justin McKenna assesses the Irish position
Multi-Party (Class Action) Litigation Marcus Hanahoe assesses how such multi-party litigation cases fare in other legal jurisdictions as compared to here in Ireland
Top of his Game
Business Interruption Insurance – Lessons Learned So Far
Kevin O’Higgins meets up with Dundrum Solicitor Brendan Dillon
Martin Scanlon BL warns that the judgments to date disclose a number of important principles which must be borne in mind by all parties when a business interruption insurance dispute arises
Covid Pandemic – Implications for Commercial Leases Paul Binchy BL addresses some of the legal issues that arise in connection with commercial leases as a consequence of the Covid pandemic
State Your Reasons Siobhán Lafferty outlines how the appeal of the Labour Court’s decision was allowed by the High Court and has been remitted back for a further determination
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Message from the President
A Surge of Positivity
s we amble through the summer and into the last half of the year, thoughts of holidays and respite from the pandemic working routine are hopefully at hand. It is at intervals like this that we can often reflect on the period that has just passed. In the months since our last issue, we have generally experienced a surge in positivity as the vaccination rollout finally gathered pace, the rates of infection and hospitalisations steadily declined to less alarming levels and many of our previously enjoyed recreational activities were resumed. While the emerging bleak predictions about the Delta variant may buckle our fragile state of anxiety and apprehension, we still have good cause to be buoyant and remain positive. We know what works in containing the spread of infection and we continue to diligently comply with these measures while maintaining our service levels. Our work practices have changed utterly. Many of us continue to work from home all or most of the time and we manage our teams, clients and tasks in this way. Where we do attend our offices, courts or other work venues we do so under strict public health measures. In parallel, our protected populace is significantly increasing on a daily basis. These realities should give us optimism for the days ahead as we think about our deserved break away. While Adam Smith may be correct in pure economic terms that individuals acting in their own self interest are beneficial to all, we have experienced the certainty of the converse of this sentiment. When it matters, we have shown enormous capacity to act in unison for the collective benefit and this is no more apparent than within our profession. Through sustained resilience and hard work, we have made it possible for our clients, colleagues and firms to continue with their business as seamlessly as possible despite the great challenges posed. Often, this involves delivering our services to clients and support to colleagues at irregular hours and in challenging environments. During all of this, there have been many positive lessons that would serve us well to adopt on a permanent basis. We have realised the importance of our reliance on technology and the value of continuing to invest in technology in all our practices. We have appreciated the benefits that technology tools can offer to our service delivery and the paralysis that can occur
4 the Parchment
without such functioning tools. We have also witnessed the devastation that can be wreaked on information technology systems through cyber-crime and the importance of adequate security systems to safeguard our own practices befalling to the ill-fated cyber-attacks recently perpetrated on the Health Service Executive. Our information technology, like all critical assets, requires proper protection and investment. Many of us have promoted wellbeing initiatives for our staff (and ourselves) and seen the benefits that this brings in terms of culture, goodwill and productivity. Increased awareness of initiatives that make our work places better settings should continue to improve our work and personal lives. Back at the DSBA ranch, our Council and Committees, ably supported by our administration staff, have resolutely applied themselves in bringing to our members a volume of very high quality CPD events. They hosted five webinars last month that included High Court President, Mary Irvine and LSRA Chief Executive, Brian Doherty as guest speakers. They have also made valuable submissions on critical areas of legal reform in the areas of mental health,
family justice system, collective redress and professional indemnity renewal and these submissions can be found on our website. Our Parchment committee and contributors have continued to put together excellent pieces for this magazine and I do encourage you, particularly the younger members, to get involved in contributing to this publication. It is a great way to improve writing skills, gain profile amongst your colleagues and keep our readers informed on topical matters. Many of us are wondering about the future of work within law firms. Having seen the efficacy of remote working, we now know that the traditional office working environment is not the only way we get things done. I expect we will embrace more flexible working arrangements throughout our industry in our post pandemic lives and we will have a better understanding of what this should entail within our firms in the months ahead. For now, I believe that a gradual and cautious return to former work habits is warranted. As Yeats would say, tread softly. Joe O’Malley, DSBA President
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The Pandemic President
When Mary Irvine left Mount Anville with thoughts of becoming a professional golfer, it would be hard to envisage that 45 years later, she would be first judge in the State to hold four judicial positions and become the first female President of the High Court. Stuart Gilhooly SC put on his mask and spoke to her about her appetite for hard work, desire for access to justice and wanting to get out while she is still young
ary Irvine is not your average judge. She is good with a chainsaw, loves motorbikes and is in love with her kayak. She wasn’t academic at school and had thoughts of trying to become a professional golfer. Or a doctor. This is a woman who has defied tradition and is now on a mission. For justice, or more pertinently, access to justice. It is her burning desire to see every citizen able to have their case heard as speedily as possible. But she needs more judges and she needs them now. Not next year or in three years. Now. “We are in a desperate scenario. We needed 12 judges three years ago. Now we need at least 17.” What about the recently-passed legislation approving the appointment of five more High Court judges? She struggles to gets the words out, such is her dismay at this token effort. “I’m sort of speechless. To make a real difference we need 17. The first five are already accounted for [she clicks her fingers]. Two will have to be assigned to crime. We have people in custody for 18 months who 6 the Parchment
We are in a desperate scenario. We needed 12 judges three years ago. Now we need at least 17
are presumed innocent, awaiting trial. Those on bail are often waiting as long as three years. “The strategic infrastructure and commercial planning list which needs three judges but only has one at the moment – one judge will have to go there. Then, we have recently signed a new extradition agreement – the Schengen agreement – as a result of which the Irish authorities for the first time have access to all European arrest warrants. This means our extradition list is set to double, almost overnight. Another judge will have to be assigned to that list and the fifth judge will have to go to the asylum list which is also backlogged. That’s the five new judges accounted for and that will just help keep the tide at bay.”
We Can Work it Out In addition to providing for five new High Court judges in recent legislation, the Government has set up a working group to examine the needs of the judiciary, but it won’t report till next year. “We are working full steam ahead to get our case for significant extra judges to the working group. But, to be honest, until we get a substantial number of additional judges, we
Summer 2021 dsba.ie Stuart Gilhooly is a partner at H.J. Ward & Co. Solicitors. He is a former President of the DSBA and former President of the Law Society
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Tell me Why
We could probably absorb another 10 judges without the need for further courtrooms. What we need is a bit more creative thinking will be operating what I feel is a third-rate system.” Of course, additional judges won’t be enough on their own to improve the service to litigants. Technology in the courts system needs a massive upgrade as its limitations have been all too obvious in the last 16 months. “Even with all the technology in the world, we need more judges to hear cases. We may be able to file and manage documents more easily and facilitate witnesses who may not wish to travel to court if we have better technology, but it’s the number of sitting court hours available that matters. And we simply don’t have the judges to provide the necessary number of hours,” says President Irvine. “Cases are often forced to settle for reasons that have nothing to with the facts of the case. If you look at the personal injuries list, where cases are allocated by lottery, in no other area of litigation does this happen. If you have a non-jury action, your case gets a date and a judge, and the same system applies to all other civil actions.” She continues: “The personal injuries list runs on the basis that we list three times as many cases as we have judges available to hear them. This forces a certain number of those cases to settle for reasons unconnected with the facts of the case itself. A plaintiff 8 the Parchment
will often settle if the case is not going to get on because they can’t afford to wait a few more months to have their case heard. Or a defendant may settle because costs are accumulating while the case doesn’t get on. These are factors which only come into play because we do not have enough judges to meet demand. This is not access to justice.” The President warns: “I don’t understand how Government doesn’t seem to appreciate how important timely access to justice is for the citizen and for Irish business. Unless we get further resources, it could soon take a year to get an important planning case on for hearing, such has been the growth in the number of planning cases. “Also, who is going to come and invest in Ireland if you can’t get a case on in the Commercial Court pretty speedily? That court was set up to fast track important commercial cases and get them heard within a very short space of time. Now the list is groaning with the number of cases needing trial dates. “I sometimes think the fact that we can always provide a judge for a very urgent case doesn’t help our case [for more judges]. But the trouble is that to make room for that urgent case we have to cancel someone else’s case. I often feel that it’s the small person that bears the brunt of the shortage of judicial resources.”
Over the years, one of the arguments against appointing more judges has been the corresponding lack of courtrooms or support staff to service them but President Irvine has seen enough in the last 12 months to know this get-out-of-jail card doesn’t stack up anymore. “There is commercial property available all over the city if we are short of space. We have been renting Phoenix House for years. We wouldn’t need many more courtrooms even if we had a significant number of additional judges. We can do a lot more work on remote platforms. We could probably absorb another 10 judges without the need for further courtrooms. What we need is a bit more creative thinking.” The passion is oozing out of every pore as Mary Irvine rails against this long-standing grievance. Her predecessor, Peter Kelly, had complained and cajoled about the same issue to no avail but the dial has been turned up to 11 now. There must be times when the President of the High Court wondered how she got here. We are sitting in her well-appointed office beside Court 6 in the Four Courts. A long list of male predecessors has occupied the same space but Mary Irvine is the first woman to hold the office. It’s a long way from the 18-year-old Leaving Cert student who wanted to play golf but didn’t ultimately pursue a professional career because her brother thought she was too good a loser to ever become a winner. “I played about four or five junior internationals and then got a senior cap. But if I was four up with six to play, I still might lose. I wasn’t great at closing out matches.” So, she went to study law. Born in 1956, a child of the sixties and seventies didn’t have to spend much time worrying about points. “It happened by complete accident, I spent my teenage years playing golf and hockey. I had very little interest in what went on in the classroom. I had no interest in academia at all. The only subjects that really interested me in school were the science subjects. When it came to college, it was medicine or law. I would have loved medicine, but I think I might have been a point short.” The golf went by the wayside and by the time Mary Irvine got to the bar, it was already history. “When I came to the Bar at 21, women were only entitled to play golf [on any course] Monday to Friday. So, once I started work I really had no opportunity to play. And pretty soon I had three kids and a busy practice. By the time women were allowed to play golf at weekends, I hadn’t the time, so I more or less gave it up. I suppose that proved I wasn’t as
Summer 2021 dsba.ie
Photography: Bryan Meade
addicted to golf as I thought I was. I didn’t hanker after it at all.” President Irvine was called to the Bar in 1978 and devilled with Michael Moriarty (whom she subsequently married) and had a loose arrangement to do motions for Dermot Gleeson in her second year. She describes her start as less than stellar but eventually she built up a busy clinical negligence practice which she carried over when taking silk. Her reputation was burgeoning and I ask her if she had progressed from the golfer who was a good loser to being a more ambitious lawyer who wanted to go places.
Mary Irvine at a glance
Eight Days a Week “I wouldn’t say I am ambitious as such. But I am incredibly tenacious, and I try to do everything the very best I can. I think this probably explains why I nearly always seem to make it to the next level.” The next level was the bench and her reasons then, a little like when in school, are more haphazard than calculating. “All my friends had gone to the bench. I had a regular lunch group that included Sean Ryan, Kevin Feeney, Paul Gilligan, Frank Clarke, George Birmingham, John McMenamin, Oonah McCrann and Conor Devally. One by one, most of them became judges. It just seemed to be the natural thing to try to follow them.” After seven years in the High Court, presiding mainly over the Personal Injuries List, she was asked to apply for a position in the inaugural line up for the Court of Appeal. It involved a much greater variety of cases and she took some time to find her feet. With just six judges on the civil side in the first few years, it meant three judges per case and writing every third judgment, sometimes in areas of law in which President Irvine had little enough experience. “When you have to write a fair percentage of your judgments outside your legal comfort zone, that’s a hard job. Most of the other members of the Court on the civil side had a better spread of relevant practice as High Court judges and probably would have found their transition to the Court of Appeal easier than I did.” Ultimately though, her personal injuries experience meant presiding over a number of seminal personal injuries judgments which resulted in a significant change in how such cases were valued. “I didn’t have a policy position. The way the Court of Appeal worked was that the person with the most experience in the area of law under consideration would usually be asked to write the judgment. And, at the time I was there, the view of most members of the Court was that there was a disconnect
FAMILY DETAILS Partner Brendan Hayes (musician/ pharmacist). Three children. Mark, Clare and Aoife (no lawyers). Two in technology, one in philosophy. FAVOURITE SPORTS? Tennis, golf, skiing, canoeing, cycling and swimming. BOOK YOU’RE CURRENTLY READING? “Do not say we have nothing” (Madeleine Thien). THE BEATLES OR THE ROLLING STONES? The Beatles. MOVIES OR THEATRE? Theatre. LAWYER YOU MOST ADMIRE(D)? Best not answered. I could probably name five or six who I consider have stellar abilities. But, unless you get a court order, I won’t be revealing that list any time soon.
between the top figure commonly awarded for catastrophic injuries and the awards for lesser injuries.”
With a Little Help from my Friends It may well have been these judgments that led to Mary Irvine being asked to chair the Personal Injuries Guidelines Committee which reported earlier this year and caused much rancour at the Judicial Council itself when it was asked to adopt new guidelines for damages in personal injury cases. “It was a difficult process, but we engaged the best of experts. We retained Colm
McCarthy as our economist, possibly the best expert in the country, to tell us how much the value of money had changed since 2008 and whether there was justification for uplifting the top award for catastrophic injuries to reflect that change. Sara Moorehead SC provided us with an opinion on how damages were assessed in a vast number of other jurisdictions and advised us as to the jurisdictions we should use for comparison purposes. We looked at the levels of damages in those countries and compared them to those made in this jurisdiction for similar injuries.” the Parchment 9
We didn’t listen to insurance companies or consider how any change in damages might affect insurance premia. We simply asked ourselves ‘what would be a just and proportionate award for this injury in the light of the fact that someone gets €500k (or now €550k) for cerebral palsy or some such catastrophic injury?’ President Irvine continues: “Then we gave all the data to a leading data analytics provider to determine how our awards compared to those in the comparator countries. By the time we had done all that, the report had nearly written itself. We produced a unanimous report. However, the decision of the Council itself wasn’t by any means unanimous. In fact, I wasn’t at all confident that the proposed Guidelines would be voted through. “We did the report on an entirely independent basis. We didn’t listen to insurance companies or consider how any change in damages might affect insurance premia. We simply asked ourselves ‘what would be a just and proportionate award for this injury in the light of the fact that someone gets €500k (or now €550k) for cerebral palsy or some such catastrophic injury?’ At the time all sorts of awful things were being said about the Committee, such as that it was being influenced by insurance companies and others with vested interests. That was all so untrue.”
Here, There and Everywhere With this monkey off her back, President Irvine can return to the not inconsiderable task of managing the High Court during a global pandemic. Arriving last summer at the end of the first lockdown, the job she was born to do brought one challenge after another. “I feel like I have been standing with a fire extinguisher in my hand since I arrived. I sometimes think I could be a member of NPHET or go on Mastermind I have spent so much time trying to keep on top of the statistics relating to the pandemic. It felt a bit like becoming a health and safety officer overnight. It was an extraordinary situation to be dropped into. A fair amount of time every day is spent on Covid related matters. It has been incredibly demanding deciding what types of cases we can or cannot do at any given time due to Covid.” She has been very vocal on the need for the public and practitioners to adhere to the guidelines and a sign of how seriously she 10 the Parchment
takes it is we both wear masks throughout the interview despite the appropriate distance also being kept. “Some areas of work have suffered more than others,” says President Irvine. “Crime has been going relatively well in recent months, although it was stopped for a long period due to the complexity of keeping juries safe during the pandemic. And people often forget that a significant amount of work is done on affidavit and all of this work has gone ahead on remote platforms notwithstanding Covid. All High Court judges have been fully employed throughout this period. “Cases involving witnesses have suffered the most. We are still operating under significant restrictions even now, and not everyone understands why this is so. For example, we have to restrict the footfall in all court buildings. This means that we are limited in the number of cases that can be listed for a physical hearing each day.” Over the course of our long chat, her email alerts beep constantly. The pace is relentless, and she feels the job, as it is currently modelled, is probably too big for one person. “For a President to be able to make a real difference to the High Court, they probably shouldn’t sit at all or, if they do, only for perhaps one day a week. The President has a lot of administration to attend to and needs to be given time to explore ways to improve the delivery of justice to the people who need it most. It takes time to identify the problems in the system and then to work out how it can be improved. At the moment, I feel I only have time to manage fall-out from the pandemic. And, I think there should be a separate President responsible for all criminal work carried in the High Court.”
Tomorrow Never Knows I ask Mary Irvine to look into her crystal ball and imagine what her courts will look like in October and over the next few years. “In October, I think we will have a normal workload and will be back to doing witness cases in a physical setting. I think we will still do some work on remote platforms.
Social distancing will probably be with us into next year, so I can’t, for example, see a common law motion list with a hundred people packed out the door of the court, resuming any time soon. “I think most trials will look much the same as they did before Covid, save for social distancing. However, I can see motions, interlocutory matters, call overs etc. all continuing on remote platforms for the moment. “Looking further ahead, my overall view is that witness cases are much better presented in a physical setting, but I don’t think we will go back to exactly where we were before Covid. We have all learned the benefits of hybrid hearings. We really shouldn’t be discommoding people who don’t really need to come to court. Every court needs to be a full technology court so that we can give each case the type of hearing that best suits that case. And, to have fully equipped technology courts would allow us keep going if we ever have another lockdown.”
When I’m Sixty Four President Irvine has five and a half years before mandatory retirement beckons, so I ask what she hopes to do when the P45 arrives. Her answer surprises me. “I don’t think I’ll be here for five years. I’ll give the job 150% for however long I decide to stay. But, you are either the type of person who wants to stay until you are 70 (or beyond if that was permitted) or you’re not. I started my career at 21 and took one week off when each of my children were born. I felt I had to do that to keep my practice. I missed out on a lot when my kids were growing up and now I’d like a chance to have great times with my grandchildren. “I have loads of interests. I love the outdoors. I’m very useful with a chainsaw when there is a tree lying around that needs attention. I love heading out on the water on my kayak and I really enjoy pottery. I’ve just given up riding motorbikes, although I still ride my much-loved Vespa. I feel I’m healthy, I’m well, I’ve had a great career, but I want to get out in time to shake a leg.” President Irvine continues: “I have loved every moment of my career and I’m happy with most of the decisions I made. However, I really want the opportunity to spend more time with my family while I am in good health.” When Paul McCartney penned the iconic tune ‘When I’m 64’ back in 1967, he could hardly have envisaged a youthful, vibrant and highly energetic Mary Irvine. While she may yearn to smell the roses, I get the impression she has plenty of unfinished business. She’s not a good loser anymore and if she doesn’t get those additional judges, lock up the chainsaw. P
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New Solicitor Senior Counsel Appointed Last year saw the groundbreaking appointment of the very first Solicitor as Senior Counsel. In total, 17 were appointed. Last month, a further 12 Solicitors were awarded a Patent of Precedence
he Government recently appointed 12 solicitors’ patents of precedence. The 12 solicitors are: Raymond Bradley (Malcomson Law, Dublin), Geraldine Clarke (Gleeson McGrath Baldwin LLP, Dublin), Nicola Dunleavy (Matheson, Dublin), Alison Fanagan (A&L Goodbody LLP, Dublin), Larry Fenelon (Leman Solicitors LLP, Dublin), Stuart Gilhooly (HJ Ward & Co Solicitors LLP, Dublin), Damien Keogh (DKA Solicitors, Dublin), Conor Linehan (William Fry, Dublin), Rachel Minch (Philip Lee, Dublin), Geoffrey Shannon (Law Society of Ireland, Dublin), Helen Sheehy (Helen Sheehy & Co, Dublin), and Keith Walsh (Keith Walsh Solicitors, Dublin). The Parchment is delighted that two former editors of this magazine – Keith Walsh and Stuart Gilhooly – have become Senior Counsel. Both Keith and Stuart are also former Presidents of the DSBA and together with Geraldine Clarke and Helen Sheehy and last year’s appointed Senior Counsel Áine Hynes – five former DSBA Presidents have become Senior Counsel. The parchment tracked down eight of the new solicitor Senior Counsel to find out the answer to two questions: 1. What were the factors that motivated them to apply for the title of Senior Counsel? 2. What differences do they think it might mean for them in practice?
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Alison Fanagan SC In congratulating my colleagues in A&L Goodbody who were awarded Patents of Precedence last year, Liam Kennedy and Vincent Power very kindly encouraged me to consider applying myself. They took time to meet with me and explained why they felt, with my combination of environmental and planning expertise as well as litigation experience, that I would have a good chance of success. Over Christmas I read articles in the Gazette and the Parchment and noted that both commented on the opportunity presented by the entitlement of solicitors to apply and the importance for women in particular to step up and lead by example. I then read the application form on the LSRA website and thought “I can make a fair job of that!” I had taken the first week of January off – after a very busy 2020 – and spent it filling out the form and sorting out my referees who again were incredibly generous in their encouragement of me. It was a very interesting and productive exercise. It made me reflect on my career to date, what I want to do in the future, as well as on what I have done and must continue to do to give back to the legal profession. I don’t intend to become a barrister is probably the first thing to say! I have always admired the advocacy skills of the barristers I engage, and the degree of objectivity and clarity they can bring to litigation. But I think it may help to win new work by enhancing
Summer 2021 dsba.ie
Alison Fanagan SC
Larry Fenelon SC
Stuart Gilhooly SC
Damien Keogh SC
Conor Linehan SC
Geoffrey Shannon SC
Helen Sheehy SC
Keith Walsh SC
further the profile of our environmental and planning group which is the largest in the country. It’s also going to be relevant to the opinion work I do, especially where clients need to produce the advice to regulators or lenders for example. I am delighted to have been considered worthy of the honour, and I look forward to the busy time ahead as Ireland seeks to meet its climate change ambitions.
Stuart Gilhooly SC It’s funny, when Alan Shatter first introduced it in the years leading up to 2015 Act, I wasn’t that bothered about it. I thought it was a little bit of unnecessary hubris and I couldn’t have seen myself getting involved. My thinking has evolved though. Maybe it’s just because I’m getting older! I now see it as a Q mark, a way of identifying a specialism and expertise in that area. I suppose everyone likes having letters after their names as well and it is a reward for hard work over 25 years in the personal injuries arena (in my case). I decided that it would a useful branding exercise if I got it and my intention is to use it as a marketing tool for my practice. I do think that while a lot of my potential clients won’t know what it means, it does at least sound good and it will maybe help them choose in a crowded marketplace. I don’t think it will change how I practise but I do hope it will change my practice for the reasons
above. I don’t see myself suddenly deciding I don’t need to use senior counsel in my court cases for a number of reasons. First, my current stable of barristers are better advocates than me, have more experience and good relationships with their colleagues. Second, I believe it would cause a lot of bad feeling with the Bar and judiciary. While this may not matter to some, it does matter to me. I have the height of regard for the Bar in general and I think there is plenty of room for both professions to continue to co-exist in the way we always have. Third, even if the first two factors didn’t apply, there is another good reason why we use barristers. Division of labour. If I had to do advocacy work in every case, I would have a lot less time to do my own work. That said, the title does give me more confidence in situations where I have done advocacy in the past such as at sports tribunals, motions and call-overs.
Geoffrey Shannon SC
I have the height of regard for the Bar in general and I think there is plenty of room for both professions to continue to coexist in the way we always have
When the application process was opened in December 2020, I was contacted by a number of colleagues encouraging me to apply for the title of Senior Counsel. I considered applying over the Christmas period but did not make a final decision at that time. Following a publicity campaign by the Parchment 13
I see the title for solicitors to be more like an accreditation or a recognition of specialisation or expertise
the Law Society of Ireland and the Department of Justice in January 2021, I decided to apply. I viewed the application for a Patent of Precedence as a unique opportunity for validation of the specialism and expertise I had developed in the Child and Family Law area over a 25 year period. Throughout my career I have had extensive experience dealing with vulnerable children and families at a time of intense emotional upheaval for them. I feel greatly privileged that I have been in a position to contribute positively to the well-being and lives of those citizens. I have learnt through my work how fortunate I have been to pursue a career as a solicitor, which has motivated me in all my professional and voluntary pursuits. I have continuously sought to improve and enhance my knowledge of the law so that I could utilise it as an instrument for change. I believe the grant of a Patent of Precedence is the ultimate recognition by my peers of my work in an important and sensitive area. It will provide further impetus for me to continue working to improve the position of vulnerable citizens in our society. I intend to use this recognition to advocate for change for those in need of protection. I am hoping that it will increase the impact of my work in the Child and Family Law area and provide reassurance that my expertise and experience can be relied on. I do not envisage that the grant of a Patent of Precedence will fundamentally change my professional life. That said, I am delighted to be among the cohort of solicitors that can use the title of Senior Counsel and am humbled that the Advisory Committee recommended my application for the grant of a Patent of Precedence. It is an honour and distinction which I greatly value.
Parchment on family law and the advocacy skills picked up in regular Mental Health Tribunals and appeals and as an independent solicitor in Wards of Court applications in the High Court were also helpful. I had a good deal of general civil litigation experience over the early part of my career. When I looked at the criteria, I saw that having a specialty in family law and mental health law was an advantage when applying as well as having written a book on family law in 2019. I think that being Senior Counsel will make very little difference to my practice. The grant of the Patent of Precedence entitles the solicitor to use the title Senior Counsel. For a barrister the grant of Patent of Precedence entitles them to be called to the Inner Bar as well as using the title. I see the title for solicitors to be more like an accreditation or a recognition of specialisation or expertise.
Helen Sheehy SC
Damien Keogh SC
I was inspired by Kevin O’Higgins’ article in the Autumn 2020 issue of the Parchment and facilitated by the pandemic! I had not updated my CV since 1995 and did not have a website because I was simply too busy. Meetings that used to take two days with travel, were now taking two hours on zoom and suddenly I had time in the office. I used the application form initially to assist me in compiling an up-to-date CV and details for a website however it allowed me to evaluate my life at work and suggest that my expertise in copyright law might be recognised by the title SC. I don’t expect that being a Senior Counsel will make much difference. I work with very talented Senior and Junior Counsel. We work as a team and each of us brings our own particular expertise to each case we take on.
Keith Walsh SC While I was initially sceptical of the whole concept of solicitor Senior Counsel contained in the Legal Services Act, I experienced a change of mind when I saw how it worked in practice after the first set of appointments. I was delighted to see all of those colleagues recognised for their work in the legal profession in the first set of solicitor Senior Counsel appointments last year, many of whom I knew and had seen at work. I applied for this round of appointments based on my experience and specialisation in family law in particular. The articles I had written for the Gazette and 14 the Parchment
Larry Fenelon SC I have practised litigation for over 20 years. During that time I co-founded Leman Solicitors, managed the firm, and built a strong client base. I had built up expertise in certain practice areas which, if I was a barrister, would have logically applied for a Patent of Precedence to take Silk as a natural step in career progression. Until last year that recognition was not open to solicitors. I felt that I met the criteria and felt strongly that solicitors should have an equal opportunity to their Law Library colleagues in applying for a Patent of Precedence. In the immediate term I do not envisage my practice changing greatly. Over time, I am confident that it will open up new avenues of work such as review/investigation work and opinion work as well as increased advocacy work in a non Court context. As a solicitor who has practised exclusively as a specialist construction lawyer, arbitrator, mediator, adjudicator and conciliator for the last 25 years, it seemed that the most obvious next career step was to seek and be appointed Senior Counsel. In terms of my construction law practice, I have extensive experience in advising clients in construction disputes and have conducted oral and written advocacy in all alternative dispute resolution forums including mediation, conciliation, adjudication and arbitration, both in Ireland and the UK. My appointment as Senior Counsel has been welcomed by many of my clients as an endorsement of my credentials and standing in this regard, and will likely further enhance my practice. As a specialist construction Arbitrator I have acted in many complex construction disputes under bespoke and standard form contracts in respect of building and engineering works carried out in many jurisdictions predominantly in the UAE, but also in Ireland, the UK, Belgium and Iraq. I have sat as an Arbitrator, and am currently sitting, on Arbitral Tribunals, alongside some of the world’s leading specialist construction practitioners including former UK High Court Judges and Queen’s Counsel. My elevation to Senior Counsel will place me on a level footing with these esteemed Arbitrators and no doubt culminate in many more appointments as Arbitrator.
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There are so many ‘general practitioner’ solicitors who are massive reservoirs of legal knowledge and legal practice knowledge and who, individually and collectively, are a huge resource for the legal system in general
In respect of my adjudication practice, I was recently appointed an Adjudicator on the Minister’s Construction Contracts Adjudication Panel. I also coauthored Adjudication Practice and Procedure in Ireland, which is one of the leading textbooks on statutory adjudication in construction disputes in Ireland, and was published in September 2020. As Senior Counsel I would expect my adjudication practice to continue to ﬂourish. I am a Fellow of the Chartered Institute of Arbitrators, a CEDR Accredited Mediator and a lecturer in arbitration law, adjudication and dispute resolution in a number of universities and colleges, including Trinity College, Dublin and the Law Society. I am ranked as one of Ireland’s leading construction lawyers and recognised as a “Leading Individual” in Construction law and “among the world’s leading Construction lawyers” as ranked by Who’s Who Legal: Construction.
Conor Linehan SC I have had an atypical career in the legal profession. I practised as a Circuit Barrister for over 11 years, after which I re-trained (through a Masters Degree in Environmental Law and Policy and through re-qualifying as a solicitor) speciﬁcally in order to develop my strong interest in Environmental Law. I received a great training as a lawyer at Kings Inns and at the Bar; but, having re-trained, it struck me as strange that one branch of the profession (and both branches work so closely together) should have a mechanism for recognising experience and expertise and the other should not. I was really
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16 the Parchment
happy for the solicitors’ profession that that facility became available for individual Solicitors under the Legal Services Regulation Act 2015. I felt that the ﬁeld of Environmental Law, about which I feel passionately, should try to ‘make a statement’ and that was the basis of my application. I consider myself lucky that the law ﬁrm where I work has a great environmental and planning law ‘client base’, which really helps in developing the expertise. But I do not want to overemphasise ‘expertise’ in a particular ﬁeld – in this sense: just as there are, at the Bar, many eminent, experienced ‘general practitioners’ who are appointed Senior Counsel, there are so many ‘general practitioner’ solicitors who are massive reservoirs of legal knowledge and legal practice knowledge and who, individually and collectively, are a huge resource for the legal system in general and I would really like to see that reﬂected in appointments to ‘Senior Counsel’ from the solicitors’ ranks in the future. In the same way that at the Bar, the provision of legal advice and legal representation is modelled, generally, on advice and expertise from Junior Counsel in the ﬁrst instance with, then, the added value and conﬁdence of a second perspective from Senior Counsel, for me in practice it means that the clients of the Firm will have the beneﬁt, not just of the expertise that already exists within the Firm from my colleagues in the Environmental and Planning Law Unit, but will have the beneﬁt of a further perspective to inform their decisionmaking. Again, to go back to the Bar, the concept of ‘Senior Counsel’ is there ultimately to assist with clients’ participation within the legal system and I think that is the way it will apply within the Solicitors’ branch also. P
Negative Interest Rates The bureaucracy of trying to properly work out how much each individual client should be charged will be a nightmare for colleagues going forward
s editor of the Parchment, you get a good sense of what issues are affecting colleagues in practice at any given time. One issue which has caused, and continues to cause, a huge amount of worry and concern is the negative interest rates that Irish banks have recently imposed on our client accounts. If my situation is anything to go by, there are countless colleagues in strife at this time. I have banked with AIB since I opened my practice 11 years ago. As my client account balance is generally always in excess of the negative interest rate threshold, I had to look elsewhere to avoid negative interest rates and accommodate client monies. AIB wrote to me in March 2021 to advise that they have a €3 million limit for Solicitor client accounts and once you go above that amount, the negative interest rates start to apply. I set up a new client account with Bank of Ireland and that has worked out well. They were efficient and interested in my business. On opening the account, I was advised by the local manager that their negative interest rate cap was €2.5 million. However, shortly after setting up the account in May 2021, the manager contacted me to say that Bank of Ireland were going to reduce their Solicitor client account negative interest rate limit from €2.5 million to €1 million come September. Of greater concern, was that my Bank of Ireland Manager was of the view that AIB Bank were going to be doing the same. I have yet to get such confirmation from AIB.
I then contacted Permanent TSB about opening up a client account with them. I was informed by Permanent TSB that they are not opening any new Solicitor client accounts across the country. I was advised if the position changed, I would be contacted. This is pretty shocking that one of our pillar banks is not accepting new business from members of our profession. It is almost like as if we have dirty money. I spoke to Ulster Bank and they were to come back to me. After following up with them again, the same result applied - no call back. I expect that their position is likely to be that of PTSB. What are Solicitors to do? I have run out of Banks and I have met with a banking brick wall. I think it is only a matter of a very short time before we will have to charge interest rates to all clients in our practices who we hold money for. This will be an administrative nightmare and it will bring a layer of bureaucracy to our practices that we could well do without. I worry for other colleagues who have also run out of banking options. One colleague I spoke to who is a partner in a large firm in Dublin said that their firm had gone down the road a long distance with KBC Bank in terms of setting up client accounts, providing supporting documentation and so forth – only to be informed by KBC that they were no longer in a position to provide such Banking facilities. My case is admittedly small in comparison to many bigger practices but for the month of June, my bill for negative interest rates was just under €2,000 which I have to pass on to my clients – many of whom are administering a deceased parent’s estate or simply have house purchase monies in my client account waiting for their transaction to complete. It seems very unfair to be penalising people like these. The bureaucracy of trying to properly work out how much each individual client should be charged will be a nightmare for many colleagues going forward. Taoiseach Micheál Martin, speaking recently about this issue, described the negative interest rates on solicitors’ client accounts as “punitive.” Colleagues should ensure that their Section 150 engagement letters are amended and updated to provide for the ability to pass this charge on to clients. It has been hard enough for so many to survive in business over the past 18 months of Covid-19 without these negative interest rates. My fear is for colleagues who are not as alert to these issues and who will perhaps struggle to pass on the interest rates to their clients and instead will try to shoulder the financial burden themselves. Unfortunately, there will be fall out. John Geary, Editor
18 the Parchment
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Arthur Denneny is a senior solicitor at Tusla – the Child and Family Agency
Additional Judicial Considerations in Family Law Practitioners may have noticed an increasing body of amendments to Acts regularly used in District Court Family Law Cases. Arthur Denneny identifies where some well-known provisions have been amended and simple Judicial directions have been supplemented with lists of factors that could oblige additional Judicial consideration when hearing cases A List of 11 - The Guardianship of Infants Act, 1964
Practitioners are beginning to see that once simple statutory maxims such as the Child’s best interests are becoming more statutorily nuanced and, by extension, complex
20 the Parchment
The best illustration of this phenomenon is the Guardianship of Infants Act, 1964. Pre amendment, Section 3 of this Act simply obliged the Court to regard the “best interests” of the child as its paramount consideration when hearing access, guardianship and custody cases. However, Section 63 of the Children and Family Relationships Act, 2015, inserted Section 31(2) into the Act and thereby added a list of 11 factors which now fall to be considered by the Court when assessing a Child’s best interests. The list includes obligations such as the requirement to bear in mind the importance of maintaining familial relationships and the capacity of a parent to care for the Child.
A List of 18 - The Domestic Violence Act, 2018 Lists were also introduced into Domestic Violence Legislation. Sections 2(2), 3(2)(a) and 5(1) of the old 1996 Domestic Violence Act obliged the Court to simply consider if “the safety and welfare” of the Applicant required issuing a Safety, Protection or
Baring Order. However, in January 2018 the 1996 act was repealed and replaced with the Domestic Violence Act, 2018. Section 5(2) of the Act introduced a list of 18 factors that the Court must, if relevant, take into consideration, when making decisions in Domestic Violence cases. Included in the list is the requirement that the Court consider any convictions held by the Respondent and if there has been an alleged escalation of Domestic Violence.
A List of 7 - The Child Care Bill, 2019 The Child Care Act, 1991 (as Amended) serves as the primary legislation applied in Public Child Care Law matters. Sections 13, 17 and 18 of the Act permit the Child & Family Agency to apply for Emergency, Interim and Full Care Orders. In its current form, section 24(a) of the Act simply obliges the Court to hold the “welfare of the Child” as its paramount consideration when determining cases. However, Section 24(2) of the Child Care Bill 2019, though having lapsed at Stage 3 due to the dissolution of the Dáil, additionally sought to introduce a list of seven factors which would have obliged the Court, where relevant, to consider when issuing Orders. The list, broadly similar to that contained in Section 31(2) of the Guardianship of Infants Act, 1964, included factors such as the physical, psychological and emotional needs of the Child and the benefits of a child having a meaning relationship with his or her parents (Part 2, Section 4, Child Care Amendment Bill, 2019). The lapsing of the Bill does not mask the Legislature’s overall intention to continue the introduction of lists into the most primary of Legislation. It appears that the legislative trend of providing judicial direction through statutory lists is set to continue. Practitioners are beginning to see that once simple statutory maxims such as the Child’s best interests are becoming more statutorily nuanced and, by extension, complex. P
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Litigation following Brexit Anthony Thuillier BL examines the procedures involved in issuing and serving proceedings and enforcing judgments post-Brexit
ISSUING AND SERVING PROCEEDINGS Issuing and serving proceedings against a UK company, post-Brexit, is a two-step process involving an application for leave to serve, followed by the use of the Central Authority transmission service. It should be noted from the outset that this twostep process can be avoided if the proposed defendant simply submits to the jurisdiction of the Irish courts. It might do this by instructing Irish solicitors to accept service on its behalf. Or it might have prepared the way for this by submitting to Irish jurisdiction in the contract which governs the relationship between the parties. It is prudent to ensure that Irish companies have such clauses in their contracts with UK entities, if the UK entity will agree to them, and it is important not merely to have Irish law in the “choice of law” clause but also to specify “the courts of the Republic of Ireland” in a choice of jurisdiction clause. Choice of law without specifying jurisdiction could make for an unwelcome surprise.
Application for Leave to Serve a UK Company What if the UK company decides not to nominate a firm of Irish solicitors to accept service of the proceedings, and wants to make the plaintiff work hard 22 the Parchment
to effect service? As we all know, as of 1 January 2021 the legal structures of the EU ceased to operate on the UK. Prior to the UK’s exit from the EU, Brussels Recast saved us from having to apply for leave to serve proceedings on our nearest neighbour. The Service Regulation – transposed into Irish law in Order 11D of the Rules of the Superior Courts (RSC) – provided for transmitting agencies and receiving agencies. There was some hope that the regime would be changed only a little, because the UK applied in April 2020 to accede to the Lugano Convention. That application has not been approved to date, and so as far as service of legal documents is concerned, the applicable regime is the Hague Convention (or, to give it its full title, the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters). What that means is that when you are issuing proceedings against a UK entity, leave is needed before serving proceedings. If leave is granted, you then need to effect service via the Central Authorities. In Ireland, the Central Authority is the Master or Deputy Master (e-mail HagueConvention@ courts.ie). The equivalent in England and Wales is the Senior Master of the Royal Courts of Justice. The first step in the process is to persuade an Irish Court that the Irish Courts have jurisdiction to hear
Summer 2021 dsba.ie Anthony Thuillier BL specialises in commercial litigation. This article was originally delivered as a paper to the Dublin Solicitors Bar Association on 30 March 2021
the claim. It is only after that has been done that you begin to go about serving the proceedings.
Establishing Ireland as the Appropriate Forum Order 11E of the RSC is entitled “Service of Documents outside of the Jurisdiction (Hague Convention)” and it tells us the process that must be observed when serving a Convention country. In the case of the UK, one needs leave to serve. This means one must go to Order 11, to prove that the Irish Courts have the necessary jurisdiction. Order 11 “enumerates the circumstances in which jurisdiction may be assumed” (Grehan v Medical Incorporated and Valley Pines Associates  IR 528). An application for leave to serve out of the jurisdiction is made ex parte and is entirely at the discretion of the Court. The applicant must come within one of the criteria set out in Order 11 and it is important, when making this application, to specifically identify the correct sub-paragraph(s) of Order 11 rule 1 under which it is said that the Order may be made. There are various judicial dicta to the effect that applications such as these must be looked at “with care and circumspection”. The Court must judge the
strength of the cause of action – same will be set out on affidavit – by the "good arguable case" test. Put simply, the plaintiff has the burden of showing good reasons why service of a writ, calling for appearance before an Irish court, should be permitted upon a foreign defendant. The standard of proof with respect to the merits of the case is that there is a “serious issue to be tried”. Lest this seem like a test within a test, in order to show that one has a good arguable case, one must show that there is a serious issue to be tried. The application must be grounded on affidavit and the affidavit should include averments stating (i) that the deponent believes the plaintiff has a good cause of action; (ii) the place or country where the defendant is; (iii) whether the defendant is an incorporated entity; (iv) that proceedings in Ireland are more cost-effective and suitable to the parties than proceedings in another jurisdiction. When the proposed defendant is not a citizen of Ireland, he/she/it should be served with a notice of the summons and not the summons itself. If the application is successful, the court limits a time after such service or notice within which the person to be served must enter an appearance. A copy of the Order must be served with the notice of summons.
The plaintiff has the burden of showing good reasons why service of a writ, calling for appearance before an Irish court, should be permitted upon a foreign defendant the Parchment 23
The Practicalities of Service: Order 11E, RSC
An Irish judgment has no direct operation in England and cannot be immediately enforced by execution
Once the leave application has been successfully made the next step is to serve the proceedings correctly. In the case of a UK company that means – for the time being at least – serving in accordance with The Hague Service Convention. So practitioners must turn to Order 11E of the RSC. This covers any document to be served in the UK (“any summons, notice, document, citation, petition, affidavit, pleading, order”). You must make a request for service of the relevant documents to the Central Authority (for the correct forms to be used, see www.hcch.net/en/home). The request must be accompanied by an undertaking to pay the costs of service, payment or reimbursement if same are sought by the UK Central Authority.
ENFORCEMENT Enforcing Judgments Against UK Entities Post-Brexit An Irish judgment has no direct operation in England and cannot be immediately enforced by execution. An Irish judgment must be enforced in England relying on common law principles and case law. There is a long line of English case law relating to the enforcement of judgments of foreign courts. I believe, given the political and historic relationship between the Republic of Ireland and the United Kingdom, and given how closely the laws of this jurisdiction align with the laws of England and Wales, that the English courts will recognise and enforce judgments of this jurisdiction as a matter of course. For an English defendant who had lost an action in Ireland to show to an English Court that the Irish judgment should not be recognised, it would have to show that the Irish Court had no jurisdiction to pronounce the jurisdiction, that the judgment was procured by the fraud of the plaintiff, or that there
24 the Parchment
was some sufficient reason why the judgment required to be examined. In my view it is highly unlikely that such an argument could be made with a prospect of success. The English Court will consider the questions set out in the current edition of Dicey, Morris and Collins on Conflict of Laws (15th ed, Vol 1) and set out as Rule 43 (This was Rule 36 when considered by the Supreme Court in Flightlease  1 IR 722). Examples of the matters which the English court would ask itself are: (i) Was the judgment debtor present in Ireland at the time the proceedings were issued? (ii) Did the judgment debtor make a counterclaim in the Irish proceedings? (iii) Did the judgment debtor submit to the jurisdiction of the Irish court by voluntarily appearing in the proceedings? In my view, the easiest to answer, in most cases, will be the third of these questions (this will not be true, of course, of default judgments). The above are, in short form, the common law principles for the recognition of foreign judgments. A judgment creditor seeking to enforce a foreign judgment in England at common law cannot do so by direct execution of the judgment. He/she or it must bring an action on the foreign judgment. The foreign judgment must be in personam, it must be final and conclusive, it must be for a debt, or a definite sum of money (i.e. damages, a final order for costs). It could not, for example, be for specific performance of a contract.
Practical Steps for Irish Parties Seeking to Enforce Irish Judgments Against English Entities in England On foot of an Irish judgment (i.e. an Irish award of damages) the judgment creditor may serve a statutory demand in England in terms of the foreign judgment, just as with any other unpaid debt. If the validity of the debt is contested, the issue falls – in theory – to be resolved as an ordinary action: the aim of the action being to establish the enforceability of the judgment and hence the existence, as a matter of English law, of the debt. In practice, the English rules allow for what we would recognise as a Summary Summons to issue. First, the judgment creditor issues a “statement of case”. The pleadings would include a plea that the Irish High Court had jurisdiction to determine the original proceedings. The defendant – the same party which was the defendant in the Irish proceedings – acknowledges service and may even file a Defence. The Irish claimant may, however, apply for summary judgment on the ground that the defendant has no real prospect of successfully defending the claim. The Court will, in all probability, give judgment to the Irish claimant, unless the Defendant has been able to put forward a credible argument that the Irish judgment was obtained by fraud. Put another way, whether the Defendant files a Defence or not, it may not be allowed to defend the case because English judges tend “narrowly to circumscribe the defences that may be pleaded to a claim on a foreign judgment” (Dicey, Morris and Collins on Conflict of Laws (15th ed, Vol 1) at para 14-011). Thus, in conclusion, as the authors of Dicey, Morris and Collins note: “The proceedings upon such an action may thus have a largely formal character.” P
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High Court Ward of Court Decision The Supreme Court remarked in a recent case, “that from time to time the Courts must consider issues arising in cases which can truly be said to engage matters of life and death”. David Hickey reports on a tragic case that came before the President of the High Court, Ms Justice Mary Irvine, earlier this year, and where judgment was delivered on 10 May 2021 in the case of In the Matter of C., A Ward of Court  IEHC 318
n the words of President Irvine, the facts of the case were “profoundly tragic” and “what can only be described as the worst imaginable type of family catastrophe”. Katie was 18 years of age when she suffered irreversible hypoxic/anoxic brain injuries following a major cardiac arrest. Katie was admitted to hospital where she was put into an induced coma and ventilated. An EEG and MRI scan confirmed the presence of severe brain damage and it was anticipated by her family and treating doctors that following the withdrawal of ventilation Katie would pass away. However, Katie began to breathe on her own and her vital functions stabilised. A decision was subsequently made to have a PEG feeding tube inserted and because of the excellent care that Katie received from both her family and the medical nursing staff where she resided, her condition remained relatively stable for over nine years. Following an application on the part of the HSE to have Katie made a Ward of Court, Katie’s mother was given liberty to bring an application to have her nutrition and hydration withdrawn and allow Katie pass away peacefully. The case was heard over three days and evidence was presented to the Court on behalf of Katie’s mother, the HSE and the General Solicitor for Minors and Wards of Court, Katie’s Committee in Wardship. The unanimous view of all the clinicians who gave evidence was that Katie had
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sustained an irreversible and severe hypoxic brain injury from which she would never recover. Katie was diagnosed as being in a Persistent Vegetative State (PVS) and there was no hope for any meaningful recovery. Following a detailed consideration of the evidence President Irvine turned to the legal issues arising in the case. The case bore several similarities to the leading decision in this jurisdiction of In re A Ward of Court (No. 2).  2 IR 79. However, unlike in that case, the parties were agreed as to the appropriate outcome albeit there were some minor differences as to the relief to be granted. Counsel on behalf of Katie’s mother argued that it would be preferable that the Court make an Order consenting on Katie’s behalf to the next steps to be taken in terms of her medical treatment while others considered a declaration of lawfulness would be sufficient. Relying on In re a Ward of Court President Irvine pointed out that the Courts have consistently held that artificial life support is a form of medical treatment, meaning that its withdrawal cannot be viewed as an intervention that accelerates death. President Irvine referenced the list of factors that the Court may have regard to as set out by Ms. Justice Denham in Ward including “the degree of bodily invasion”, “the prognosis on medical treatment” and “any previous views expressed by the ward that are relevant”. The President also referred to the recent decision of In re J.J.  IESC 1 which, although concerned with
Summer 2021 dsba.ie David Hickey is a partner at Curry Hickey Solicitors
equally tragic circumstances, involved a different factual matrix including a divergence of opinion between J.J.’s parents and his doctors as to how J.J. should be treated. J.J. was therefore distinguishable on its facts. The Court noted that when the application had been brought “no decision had been made by Katie’s clinicians that her hydration and nutrition should, for any reason, be terminated. It therefore fell to the Court to give its consent to her mother’s application that it should be terminated because to do so would be in Katie’s best interests”. In a key passage President Irvine stated: “although the position of the treating clinicians in In re J.J. and the expert witnesses in this case were similar in that both were of the view that certain lifesaving treatment should (in In re J.J.) or could (in this case), for ethical reasons be withheld from the patient so as to allow the patient die a natural death, they came to their respective positions from very different directions. In In re J.J., it was the doctors that were the driving force behind the application. They had decided not to commence life-sustaining treatment which the child’s parents were insistent should be deployed should his condition further deteriorate and wanted that decision declared lawful. Their evidence in support of that application was that it would be unethical to provide the said treatment. In sharp contradistinction, it is Katie’s mother who is the driving force behind the present application. She believes that it is not in Katie’s best
Wards of Court
interests that her life be further prolonged artificially. The clinicians in this case are not the applicants but are expert witnesses called by the parties to give evidence that it would be ethical for a clinician involved in Katie’s care, having regard to the Guide, to decide that they could no longer support Katie’s current treatment regime”. Having considered all the evidence and the legal principles, President Irvine accepted that Katie was in a PVS and held “taking the view of a loving and considerate parent appraised of all the facts” that it was in Katie’s best interests that her life support be withdrawn. In arriving at this conclusion, the Court also had regard to Katie’s own wishes as expressed to her family prior to her cardiac arrest. While the decision reaffirms the law as set out by the Supreme Court in In re A Ward, in distinguishing In re J.J., it demonstrates the degree to which such cases are innately fact specific. As the Court noted, “the common law develops in a piecemeal fashion and it is only after a number of coherent authorities have been handed down in a particular area that the law can be accurately restated”. The author wishes to acknowledge, in the Court’s words, the “remarkable strength and fortitude” shown by the family as well as the empathy of the respondents, their legal teams, the Registrar and the President of the High Court in the conduct of this case. P
President Irvine pointed out that the Courts have consistently held that artificial life support is a form of medical treatment, meaning that its withdrawal cannot be viewed as an intervention that accelerates death the Parchment 27
No Ordinary Joe Current DSBA Supremo and Managing Partner of Hayes Solicitors, Joe O’Malley, sits down with Killian Morris to discuss law, life and the DSBA
ne can only imagine the reaction at the O’Malley dinner table when he announced that he had just been elected Managing Partner of a 150 strong Dublin law firm. You see, the role was going to start in May 2021 when his third child was due to be born. Added to his current role as the President of the largest bar association in the country, you wonder whether something was about to give? Today, Joe is still President of the DSBA, Managing Partner of Hayes Solicitors and most importantly, a happily married father of (now) three young children “I have a really supportive wife, Aisling, who makes my side of things easier than they would be otherwise," he says, explaining that his third child was only born eight weeks ago. Perhaps the pandemic has come at the right time as we discuss how working from home has had such a major impact on all our professional lives. “Over the last few years I have tried not to work at weekends, where possible, so that I find the time to switch off. Now I also have the flexibility to start a bit earlier or finish a bit later and sometimes this can allow you to make time in the middle for your family or just yourself.” He points out that otherwise, he wouldn’t get a chance to take advantage of those times, so there are positives to flexible working from his perspective. Noting that we are both dressed very casually (even
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for a Friday), I ask him does he think the age of the ‘shirt and tie’ is over. Joe doesn’t believe it is the end for solicitors in formal attire, but he acknowledges that there will be days where you can dress casually. He points to the fact that law is still, at its heart, a formal business where we have to dress appropriately to attend court or transaction closings. Also, there will be certain clients who expect it and he thinks that circumstances will be such that “you will just have to judge the occasion”. He mentions one day recently, when working from home, dressed in shorts and T-shirt, where he was summoned to court by a newspaper client for an emergency hearing around a reporting restriction. Undeterred, he was fully suited, booted and into the car in less than five minutes! We move on to discussing the impact of the Covid-19 pandemic on all of our professional lives, where Joe has a unique insight both from a management perspective, as leader of a large Dublin firm, but also from his standpoint as President of the DSBA. I asked him about his recollection of the events of March 2020: “I remember it very vividly. We could anticipate that something like that may happen, facilitating more people working from home, but we didn’t realise it would be a complete lockdown so soon”. We mention the scramble for laptops and other equipment needed to get the Hayes workforce set up and working from
Summer 2021 dsba.ie Killian Morris is a partner at AMOSS Solicitors. He is a member of the Parchment committee
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Some may see the solutions as radical but I think they are practical and achievable; these are options that have already been well ventilated over the years including the creation of a Master Policy allowing more insurance companies into the market, setting up arrangements where nobody can be left without insurance for a period of time, changing from the single renewal date structure and simplifying the renewal process
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home, given that there was such huge demand everywhere for the same items. He points out that “we were very conscious of the need to keep in touch with everyone; giving them the right message and reassurances about everything” at a time of such uncertainty when “we ourselves didn’t know a lot about what was going to happen next. We had this unknown about whether it all would work, whether demand for our skills and services would continue in the same way.” Fifteen months later, many of those concerns have proved unfounded but he does believe that this is a testament to the hard work and dedication of the profession and the support provided within solicitors’ practices around the country. Then to the question that is on everybody’s lips – will this newfound flexibility and WFH culture continue when we get back to “normal”? Our current DSBA President is certain that some of the recent changes are here to stay across all professional services practices and in some client businesses. He agrees that flexible working has generally worked well but believes that it is too early to know exactly what works best for different firms. “I think we will need to take stock”, he says “we will need to assess and find the solutions that work for us. I expect most firms will be allowing some form of flexibility but there won’t be one rule for everybody”. A year as President of the DSBA would normally be one where attendance at regular social events, seminars and physical meetings is an almost daily occurrence. While Joe has missed out on the social aspects, he thinks this has given him the opportunity to do other things. Over the past number of months, the DSBA has been particularly focussed on running online seminars and making legal submissions on various legal reform topics. He mentions with pride the number of webinars that the association has run over the past year, with five sessions taking place over the last month alone. He is very grateful for the support given by the members to these initiatives and while the sort of interaction that you get at physical seminars is hard to replicate, the feedback has been really good. Joe is at pains to stress that while some of the larger firms have very sophisticated internal training programmes, the DSBA does attract high quality speakers that may not, by virtue of their positions, be able to favour particular firms by attending private seminars; recent webinars had been addressed by the President of the High Court and the Chief Executive of the Legal Services Regulatory Authority. He concludes that “I think we will [when normality resumes] get back to a hybrid situation where some of the seminars will be held in a hotel as before and others will be held online. For some people, travelling two hours to get to a two-hour CPD event just doesn’t make sense”. With fewer social events in the calendar, the DSBA has made a record number of submissions on various legal issues during O’Malley’s tenure at the helm of the association. Joe is keen to highlight two particular areas of interest. “I think collective redress is going to be very impactful for the profession – when it comes in next year,” he says referring to Ireland’s implementation
of an EU Directive which will allow for the establishment of a body to be tasked with taking claims on behalf of groups of individuals; claims which would not otherwise proceed. This Directive provides that certain types of claims, mostly consumer claims, can join into this mass scheme, through an entity (likely to be a special purpose company) which will actually bring the cases. “Obviously this will bring a volume of litigation for some people but will also allow access to justice where it wasn’t feasible before; and that’s an important change,” Joe says, while pointing out that certain safeguards are to be implemented which will hopefully prevent it from becoming a US style mass torts regime. “The entity taking the claims will be independent of the claimants and will be a sort of clearing house who will carefully deliberate on whether a case is stateable and has a good chance of success – I expect they will not be taking on frivolous claims or trying to take claims just to force a settlement”. Clearly this is an area that will be of significant interest to many solicitors and the DSBA felt it was crucial to ensure that a submission was made prior to its implementation into national law. Another issue that the DSBA has sought to emphasise this year, is the sometimes bitter experience faced by colleagues at professional indemnity insurance renewal time. The DSBA is and has been at the vanguard of this issue, on behalf of its members, and is acutely conscious of the stresses the annual renewal puts on some colleagues, particularly given the uncertainty around premium levels and, this year, the inability of some to get insurance at all. The DSBA President acknowledges that this continues to be an enormous issue which has prompted the DSBA to survey the membership and make a detailed submission to the LSRA. The DSBA wants to see common sense solutions (the detail of the submission is printed in this edition of the Parchment for those interested) and Joe points out that “some may see the solutions as radical but I think they are practical and achievable; these are options that have already been well ventilated over the years including the creation of a Master Policy allowing more insurance companies into the market, setting up arrangements where nobody can be left without insurance for a period of time, changing from the single renewal date structure and simplifying the renewal process”. We discuss how other professions are also facing similar challenges in the PI market but we agree that it seems to be a particularly difficult problem for the solicitors’ profession over many years. Outside of the office, the father of three tries to find as much family time as possible. His sincere hope, after the pandemic ends, is to get on the road again and travel to France with the family where they have had great times before. Joe runs regularly, finding it great to cleanse the mind but also, like many others, he has started sea swimming during the last 15 months. While he denies owning a Dry Robe(!) he gets into the sea at least twice a week – even during the winter months depending on the tides – and quips “you know that’s another thing with the flexibility we have at the moment, I can check the tides and, if the time allows, I head out for a swim”. On the sporting front, he regularly attends Ireland soccer and rugby
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Photography: Bryan Meade
internationals, and is a life-long Dublin GAA and Tottenham Hotspur supporter. So where did it all begin for the man who takes absolutely everything in his stride? Joe O’Malley grew up in the northside of Dublin, played GAA and attended school in St Vincent’s CBS in Glasnevin. While not having family in the law, he was always interested in debating and had a grá for subjects like History and English. He recalls: “I spoke to some people involved in the profession at the time and I definitely thought ‘this is what I want to do’ so off I went on my first sojourn to the southside, to study Law in UCD. During that time, like most people, I had to make the decision whether to go and practise as a lawyer and, if so, whether you were going to the bar or be a solicitor. I thought that the solicitors’ profession seemed more for me as it had more diversity and there is more to it, as you are running a business at the same time”. Joe then explains how broad a practice he has, which he is very grateful for. Even in what some might consider the specialist area of commercial litigation, he regularly advises government and commercial clients about how to avoid litigation, alongside the obvious court-based work. He also mentions that he acts for one of the major national newspapers – and that this is, for the most part, on the advisory side. O’Malley considers that one of the most important reasons for deciding to become a solicitor in the first place and what has kept him so interested over the past 20 years, is what you learn about other facets of life or business. He mentions a recent case where he acted for the State in relation to a vaccination programme. Quite apart from being the number one issue of the day, he notes “you get to understand the whole process. The licensing of the vaccine, the clinical testing, the public health dimensions and the roll out programme but also what can possibly go wrong in a vaccination campaign and what information needs to be put out front and centre.” As Managing Partner of the firm he started out in 20 years ago, Joe has seen Hayes grow threefold from the size it was when he was an apprentice solicitor. Hayes was founded in 1840 – so it is one of the oldest law firms in Dublin – and Joe is very proud to be at the helm of a practice that still has very much the ‘family feel’ to it, despite its size – “As a firm becomes bigger there are certainly challenges you have to grapple with that just don’t arise in a smaller practice but I think we have managed to maintain a unique outlook and culture. Many of the partners and senior partners were former trainees and apprentices and there are other staff who have been with us for over 40 years”. As a leader of the profession both outside and inside the firm’s offices on Earlsfort Terrace, Joe O’Malley is acutely aware of the role we should play in guiding and mentoring younger solicitors and trainees. Joe believes they have fostered a strong culture in Hayes where the junior lawyers can always come to their senior colleagues for advice and support as issues arise; so that they can be helped along their careers. He mentions, in particular, the importance of collegiality and the ability to get on with colleagues but hones in on his own practice area of litigation when asked about how a solicitor should
conduct themselves; “there are two important points to remember – firstly no matter what you send out, whether it be an email, on the spur of the moment, or a carefully considered letter, you have to appreciate that it may well be read out in front of a Judge, and I think that should temper what you send but also, secondly, you have to realise that the Dublin legal market is small, it’s not like London or New York, and you will come across the same colleagues again and again”. When I ask him what advice he would give to those entering the profession today he says “apply yourself, try to be as visible as you can and try to get involved as much as possible. The more you put in, the more you get out of it”. Joe O’Malley clearly follows his own advice. P the Parchment 31
DSBA Submissions on Professional Indemnity Insurance Given the extremely difficult circumstances in which many members of the Solicitors Profession find themselves as a result of the current PII regime in which we are required to operate, the DSBA has felt that the time had come for a substantial review of Professional Indemnity provision and in consequence we have made Submissions to the LSRA and to the Law Society in the hope that urgent attention can be given to reform of the provision of professional indemnity insurance
Background 1. Legislation Section 26 of the Solicitors (Amendment) Act 1994 (“the 1994 Act”) provided inter alia that the Law Society may make regulations in relation to Professional Indemnity Insurance. The legislation authorised the Law Society to provide that members obtained Insurance themselves and it should be borne in mind that, at that time, the Solicitors Mutual Defence Fund was in place and was specifically mentioned in the legislation as being available. The Solicitors Mutual Defence Fund ultimately found itself in difficulties and was eventually wound up and the shortfall in its indebtedness was covered by the Solicitors profession following a vote of members and its affairs had been successfully wound up. The loss of the Solicitors Mutual Defence Fund left solicitors entirely dependent upon the market – that is to say, solicitors became entirely dependent on Insurers being willing to offer Professional Indemnity Insurance on a commercial basis going forward. 32 the Parchment
The 1994 Act was amended by Section 201 of the 2015 Legal Services Regulation Act (“the 2015 Act”) by providing that the Law Society may, with the consent of the LSRA, make regulations and the 2015 Act also made provision for the LSRA to make its own regulations in relation to inter alia Barristers, Legal Partnerships and Limited Liability Partnerships. Section 46 of the 2015 Act provides that a legal practitioner shall not provide legal services unless, at the time of the provision of the said services, there is a policy of professional indemnity insurance in place that complies with, inter alia, section 26 of the 1994 Act. 2. Unrated Insurers Historically, and in particular during the recession between 2008 and 2012, there were a number of unrated Insurers in the market and many Solicitors Firms availed of Insurance that they provided – especially after the collapse of the Solicitors Mutual Defence Fund. One of those Insurers got into difficulties and another one decided to exit the Professional
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Indemnity Insurance market in Ireland but they were not in difficulties and their decision to do so was a commercial one. The Law Society followed up on this by excluding unrated Insurers from the market in circumstances where, in fact, at that time there were no unrated Insurers in the market. But the effect of this was to reduce the availability of Insurance Companies operating in Ireland and their ability to come into Ireland. There is no guarantee that an A Rated Insurer will stay in the market nor is there a guarantee that an A Rated Insurer will not fail or get itself into difficulties. 3. The Assigned Risks Pool The Assigned Risks Pool is currently operated through the Law Society as a final resort for firms that cannot otherwise obtain Professional Indemnity Insurance. It is noted that in past years a substantial number of firms have been forced to avail of the Assigned Risks Pool. There are a number of issues with the Assigned Risks Pool as it is currently constituted and they are: 1. As a general proposition the Assigned Risks Pool
is only available to you if you pay a substantially increased premium beyond the last premium you got. The logic that was put forward for this is that it is a pool of last resort and is not supposed to be used as a pool of first resort. In other words, you only go there when you have no choice as you are penalised heavily. 2. The second issue relates to the limitations of the Assigned Risks Pool. It is only available for firms who go into it for one year. If by the end of that year you cannot exit the assigned risks pool by obtaining Professional Indemnity Insurance in the market then you cannot continue to practice. If a firm is in difficulty in terms of poor claims history, for example, and is trying to trade its way out of those difficulties, then one year is far too short to enable that firm’s record to improve sufficiently to obtain Professional Indemnity Insurance in the market as it currently operates. 3. At the end of the 2019 renewal period, over 54 Solicitors firms had been forced to rely on the assigned risks pool. At the end of 2020 a substantial the Parchment 33
The number of insurers in the Professional Indemnity market contracted to a point where in 2020 there were only six Insurance Companies offering Insurance in the Professional Indemnity market and by November 2020 only two of those were prepared to offer Insurance to sole practitioners
amount of firms found themselves in difficulty and unable to obtain insurance. There are six firms currently in the assigned risks pool with six further applications and 2 other firms that are likely to have to apply. Furthermore, there have been 21 applications to the run-off fund (the run-off cover relates to firms that ceased or will cease to practise prior to 30 November 2020 whereby they are already insured for PII for any claims that have yet to come to light) though it is not clear as to how many would have so applied. 4. Insurance Companies in the Market As time went by, the number of insurers in the Professional Indemnity market contracted to a point where in 2020 there were only six insurance companies offering Insurance in the Professional Indemnity market and by November 2020 only two of those were prepared to offer insurance to sole practitioners, that number having dropped from three when one of the insurers elected only to cover sole practitioners whose turnover exceeded €500,000. The remaining insurers were therefore restricted to partnerships. Furthermore, some insurers restricted the cover they would offer depending on the type of business conducted by the firm and many have a bias against firms in the property area of practice. Notwithstanding the difficulties in 2020, the writing had been on the wall for some time as it can be seen that the market had been contracting. 5. The Standard PII Policy Professional Indemnity Insurance as offered to members of the solicitors profession is a standard Policy which has been regulated by the Law Society and agreed with the insurance industry. The Law Society has over the years created variations in that policy which have enhanced the level of cover available to solicitors but this has had a knock-on effect whereby a number of insurers have found the provision of Professional Indemnity Insurance into the Irish Market increasingly unattractive due to, as they see it, the increasingly onerous nature of the cover that must be provided. Indeed the Law Society felt compelled at the end of 2020 to amend the basic level of cover to endeavour to entice further insurance companies into the market. 6. Available Options for PII In essence there are two options available for the profession going forward in relation to the provision of Professional Indemnity Insurance and they are: a. The Current Market Lead System The current market lead system has resulted in a rapid increase in premia for many solicitors who have found themselves being left at a very late stage in the renewal process in an invidious position whereby a very small number of insurers are dictating premia not based on the conduct or performance of those firms of solicitors or those individual solicitors but based entirely on what they can charge and what they say are the market forces operating.
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b. The Master Policy As mentioned above Section 46 of the 2015 Act provides that a Legal Practitioner shall not provide legal services unless there is in force in respect of such practitioner at the time of the provision of such services a policy of Professional Indemnity Insurance pursuant to Section 26 of the 1994 Act . Under the provisions of Section 26(2) of the 1994 Act, it is open to the Law Society with the approval of the LSRA to maintain what has become known as a Master Policy. This Policy is intended to provide Indemnity against claims classed as Professional Indemnity as are directed but in essence it is intended to provide Professional Indemnity Insurance for the profession as a whole where individual solicitors and/or individual firms depending on how same is operated would pay a set amount which would be regulated by the Professional Body on an annual basis.
Advantages There are clear advantages to the profession of having such a system in place and they are: 1. Certainty. Solicitors can be guaranteed that they would get Professional Indemnity Insurance. The cost of same would vary depending on whether individual solicitors had a poor claims history but nonetheless, it would take out the uncertainty factor. 2. Elimination of the Assigned Risks Pool. There would no need for an Assigned Risks Pool and all the problems that entails. 3. Greater Efficiency. Obtaining the Professional Indemnity Insurance would fall on the Law Society and not on individual firms thereby saving a great deal of time and difficulty on an annual basis to solicitors practices and individual solicitors who are forced to engage in the current system. 4. Increased Bargaining Position. As the Society would represent the entire profession substantial economies of scale would be available.
Disadvantages The obvious disadvantage is that many firms might feel that they can obtain a lower premium per solicitor in the market as it currently operates unless it is possible to operate a Master Policy with an opt out for firms above a certain size. Examples of Other Jurisdictions The nearest two jurisdictions to the Republic of Ireland who operate Master Policies are the Northern Ireland Law Society who have been operating a Master Policy for many years and the Law Society of Scotland who have similarly been operating a Master Policy for many years.
Recommendations 1. That the Law Society in conjunction with the LSRA complete an open and transparent review of the feasibility of a Master Policy to protect all solicitors in the jurisdiction to enable those firms to have Professional Indemnity Insurance at the best available rate using the bulk buying power of the entire jurisdiction with the final decision on its implementation to rest with the entire solicitors’ profession.
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2. We secondly recommend that the Master Policy – if approved – be operated on an individual solicitor basis. That is to say that individual solicitors would pay a flat premium per solicitor and if an individual solicitor has a poor claims history then the premium to be added to that would be only in respect of that solicitor. 3. Urgent attention in the interim needs to be given to the current system of insurance and we recommend: a. That the Law Society with the LSRA urgently consider a bare bones level of Professional Indemnity Insurance that can be obtained by the profession with extra levels of cover being available to solicitors’ firms at a cost to be indicated where it is clear that the mandatory level of cover is the base cost. b. That the Assigned Risks Pool be reformed by providing that the premium be at a reasonable level subject to the Regulator being satisfied that the solicitor’s firm has taken all reasonable steps
to avoid the availing of the pool. c. That the Assigned Risks Pool be reformed by providing that the solicitor’s firm can stay in same for multiple years if there is a need in the reasonable opinion of the Regulator for the solicitor or firm to remain in the pool for a longer period of time. d. That consideration be given to exploring with the insurance industry the feasibility of multi year levels of cover. e. That the Regulators consider moving the renewal date to the middle of the year to avoid a clear conflict that many insurers in the UK appear to have whereby they do not consider the Irish Market until after they have dealt with the UK Market in October. f. That unrated insurers who have been excluded from the Irish market be allowed to return to same so as to enable practices to have a greater range of providers. P the Parchment 35
Eoin Martin BL practices commercial, chancery and insolvency law. He was called to the Bar in 2011. This article is based on – and updates – Eoin's presentation at the DSBA Commercial Law Committee seminar of 15th April 2021
Cross-border Insolvency after Brexit There is no longer any international agreement governing crossborder insolvencies between European Union member states and the United Kingdom. Eoin Martin BL opines that it has complicated how and when Irish and UK courts will recognise, or exercise jurisdiction over, cross-border insolvency matters
or insolvency proceedings opened since the 1 January 2021, the United Kingdom is now outside the scope of the EU’s Recast Insolvency Regulation (Regulation (EU) 848 / 2015) and the Recast Brussels Regulation (Regulation (EU) 1215 / 2012 on the recognition and enforcement of judgments). The recent case of Re Arctic Aviation Assets DAC  IEHC 664 (16 December 2020) gives some indication of how an Irish Court will approach insolvency proceedings (in that case, an examinership) involving a non-EU company. The case was part of the restructuring of the troubled Norwegian Air group and concerned six related companies within that group. Five were Irish registered and were petitioning for the appointment of an examiner. Those companies further petitioned for an examiner to be appointed over a related company, Norwegian Air Shuttle ASA (“NAS”), the ultimate shareholder of the Norwegian group, which was itself incorporated and headquartered in Norway. Quinn J. was satisfied that NAS had its centre of main interests in Norway (not a member of the EU) meaning the Insolvency Regulation did not apply. Section 517 of the Companies Act 2014 provides that where the Court appoints an examiner over a company, it may also appoint an examiner over a related company. Under section 2(11) of the 2014 Act, whether a company was a related company depended in part on whether it was a company that was capable of being
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wound up under the 2014 Act. Section 1328 of the 2014 Act provides for the winding up of unregistered companies. Quinn J. referred to the earlier judgment of Laffoy J. in Re Harley Medical Group Ireland Ltd.  2 IR 596 (HC). That case identified three requirements before a court will exercise its discretion to order the winding -up of an unregistered company: (1) There must be a sufficient connection with the jurisdiction which may, but does not necessarily have to, consist of assets within the jurisdiction. (2) There must be a reasonable possibility, if a windingup order is made, of benefit to those applying for the winding-up order. (3) One or more persons interested in the distribution of assets of the company must be persons over whom the court can exercise a jurisdiction. Quinn J. said that even though he was not dealing with a winding-up, this “sufficient connection” to the jurisdiction test nonetheless provided the starting point in an examinership context. Quinn J. then referred to the judgment of Megarry J. in Re Compania Merabello San Nicholas SA  Ch 75 (a winding up petition), in which he provided the following summary: “(1) There is no need to establish that the company ever had a place of business here. (2) There is no need to establish that the company ever carried on business here, unless perhaps the petition is based on the company carrying on or having carried on business.
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(3) A proper connection with the jurisdiction must be established by sufficient evidence to show (a) that the company has some asset or assets within the jurisdiction, and (b) that there are one or more persons concerned in the proper distribution of the assets over whom the jurisdiction is exercisable. (4) It suffices if the assets of the company within the jurisdiction are of any nature; they need not be 'commercial' assets, or assets which indicate that the company formerly carried on business here. (5) The assets need not be assets which will be distributable to creditors by the liquidator in the winding-up: it suffices if by the making of the winding-up order they will be of benefit to a creditor or creditors in some other way. (6) If it is shown that there is no reasonable possibility of benefit accruing to creditors from making the windingup order, the jurisdiction is excluded.” Quinn J. found that NAS did have a significant connection with Ireland for a number of reasons. It was the holding company of subsidiaries that operated from Ireland and conducted much of their aircraft leasing and airline operation business from Ireland. He concluded that: “The commercial operations of the Group taken together with the range of legal transactions entered into by both NAS and its subsidiaries are so closely linked and interdependent that NAS has a real and deep connection to
the State, and meets the test of a sufficient connection.” Quinn J. then turned to the practical consideration of whether, if he appointed an examiner in Ireland over NAS, that order would be recognised in Norway. The petitioners adduced expert evidence from a Norwegian lawyer opining that the arrangement would be recognised in Norway (an Oslo court did indeed approve the arrangement in April 2021). Interestingly, the petitioners also contended that they were confident that the arrangement would be approved in Norway, because the examinership would be recognised by an English Court, either at common law or under section 426 of the Insolvency Act 1986. Section 426 provides for co-operation between courts exercising jurisdiction in relation to insolvency. Uniquely among EU members, Ireland is defined as a relevant country for the purpose of section 426. Relief is discretionary and a request for assistance would have to be made by an Irish Court. The UK has adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on cross border insolvency. The Model Law is not a complete substitute for the Insolvency Regulation. In particular, it is not based on reciprocity and recognition is not automatic but rather requires an application to the UK courts. However, it does at least provide a basis for recognition of foreign insolvency proceedings based on an assessment of the debtor’s centre of main interests (COMI).
Uniquely among EU members, Ireland is defined as a relevant country for the purpose of section 426
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In Gategroup, Zacaroli J. found that the Lugano convention was incompatible with the principle of universalism enshrined in English law by the UNCITRAL Model Law
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Ireland has not to date adopted the UNCITRAL Model Law. Irish courts have, however, previously endorsed the principle of “universalism” which underlies the Model Law, whereby bankruptcy or insolvency proceedings should, insofar as possible, have universal application (see Dunne J. in Re Drumm (a bankrupt)  IEHC 546 (13 December 2010). The Model Law is incorporated into English domestic law by means of the Cross-Border Insolvency Regulations. The application of these regulations was considered by the English Court of Appeal in Re OJSC International Bank of Azerbaijan  EWCA Civ 2802. In that case, an Azerbaijani company got into financial difficulties and was the subject of a restructuring under Azerbaijani law. A creditors’ meeting was held at which a majority of the company’s creditors approved an arrangement which modified the rights of creditors. It was subsequently approved by an Azerbaijani court whereupon it became binding on all affected creditors. A small minority of creditors concerned had contracts with the subject company which were governed by English law. The creditors in question did not participate in the Azerbaijani meeting. The Azerbaijani insolvency practitioner applied to the English courts for an order imposing a permanent moratorium on the rights of the creditors concerned for the purpose of giving effect to the scheme of arrangement that had been approved. This was opposed by the minority creditors in question, who relied on the old case of Antony Gibbs & Sons v. La Société Industrielle et Commerciale des Métaux (1890) LR 25 QBD 399 for the proposition that only an English law process could compromise contractual rights governed by English law. Ultimately, the Court of Appeal agreed with the respondent creditors and upheld the rule in Gibbs. To some extent, the case turned on its own facts. The Azerbaijani proceedings were over – the company was trading again and the evidence was that the outcome for the minority creditors would not affect the
restructuring as a whole. However, it does appear that the case is a blow for the advocates of the principle of universalism. The only way the Azerbaijani insolvency practitioner could bind those creditors, whose rights were governed by English law, to the process, would have been to have instigated separate restructuring proceedings in the UK. Following the UK’s departure from the EU, there were some hopes the effects on cross-border litigation might be mitigated by the UK’s accession to the Lugano Convention, which to a large extent mirrors the Brussels Regulation. The UK applied to join Lugano, but in April 2021, the EU indicated that it was opposing UK’s accession, ostensibly on the grounds that unlike the other members, the UK is not a member of the European Free Trade Association (EFTA). In Nordic Aviation Capital DAC  IEHC 445, Barniville J. was asked to approve a scheme of arrangement under Part 9 of the Companies Act 2014, which had implications for creditors whose rights were governed by the laws of various other countries both inside and outside the EU. Barniville J. adopted the approach taken in the English cases of Re Magyar Telecom BV  BCC 448 and in Re Lecta Paper UK Ltd.  EWHC 3778 (Ch) where it was observed that the court will not generally make an order which has no “substantial effect” and that “before the court will sanction a scheme it will need to be satisfied that the scheme will achieve its purpose”. The Court had to consider whether the scheme fell within the Recast Brussels Regulation, in circumstances where schemes of arrangement (unlike examinerships) are not on the list of insolvency proceedings in Annex A of the Insolvency Regulation. He noted that “In order to ensure that an application to sanction a scheme of arrangement does not fall within the gap between these two regulations, they are considered to dovetail with each other.” The recent English decision in Re Gategroup Guarantee Ltd.  EWHC 304 (Ch) suggests that even if the UK is ultimately admitted to the Lugano Convention, it will not plug the gap left by the Insolvency Regulation and the Recast Brussels Regulation as far as this “dovetailing” principle is concerned. In Gategroup, Zacaroli J. found that the Lugano convention was incompatible with the principle of universalism enshrined in English law by the UNCITRAL Model Law. The Lugano Convention, unlike the Recast Brussels Regulation, is not paired with any insolvency regulation, so there is nothing with which to “dovetail”. The departure of the UK from the convenience and certainty of the Recast Insolvency Regulation is regrettable. However, recent Irish decisions such as that in Re Arctic Aviation Assets provide a guide for navigating cross-border insolvencies with a non-EU dimension. Meanwhile across the water, the adherence of UK Courts to the UNCITRAL model law ensures a degree of certainty as to how recognition of foreign insolvency proceedings (including restructurings) will be approached, even if the process is less streamlined than before. P
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– THE ROLE OF THE SOLICITOR The pace of global legislation in the area of assisted death is accelerating. It is already well established in the Netherlands, Switzerland, Oregon and Canada. In New Zealand it is being introduced following a referendum. In Australia all the State legislatures are in the process of introducing it. Tory MPs anticipate that the UK will have it within the lifetime of the current administration. Justin McKenna assesses the Irish position
n Ireland, the Oireachtas is debating the Dying with Dignity (DwD) Bill and it remains to be seen how the concept will be adopted here. It is clear that the Bill, in its present form, is just a starting block. Much needs to be assembled in the shape of regulation and oversight. The Fleming case in 2013 established that the law on voluntary assisted dying does not require a change in the constitution. Instead, it falls within the remit of our legislators to enact a set of rules that will put in place the safeguards necessary to protect terminally ill patients when they eventually are allowed to have a say in how they wish to die. The DwD Bill sets out the groundwork for these rules. A Dying with Dignity Act may not be the appropriate place to house the safeguards. Until we have a Voluntary Assisted Dying Act the nearest thing a legal practitioner will have to work with is the Assisted Decision Making (Capacity) Act 2015 (ADM Act), as it will be when it is amended. Let us examine the DwD Bill in its present form. It is brief, 15 sections, and provides for the setting up of a Review Committee and ministerial regulation on the terms of implementation. The roles of an attending medical practitioner and an assistant healthcare professional are critical to the authorisation. The person qualifying under Bill is defined as someone who is terminally ill, over 18 and lives on the island of Ireland. There must be a clear and settled intention as expressed in a declaration. ‘Terminally ill’ means incurable and progressive.
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It cannot be reversed by treatment. The doctor is not required to make a prediction as to when death will occur. The declaration, from the point of view of an advising solicitor, is the pivotal document. It must be witnessed independently and then countersigned by two doctors who will state that the patient is terminally ill; has capacity; and has formed a clear and settled intention, reached voluntarily and on an informed basis. The endorsement will also state that the patient was made aware of the availability of palliative, hospice or other care. The two sections of the Bill that most affect medical practitioners refer to assessment of capacity and assistance in dying. What constitutes capacity is best summarised in the ADM Act. The parameters of administration of substances will be a matter of regulation. However, a cooling off period of 14 days may be reduced to six if medical opinion suggests death within a month. There is provision for conscientious objection, provided the objecting doctor makes arrangements for the transfer of care to enable voluntary assisted dying to take place. Solicitors have been a part of conversations within families, when clients sit down to discuss their personal intentions, on all things over which they have power at the end of their lives. Many of them realise for the first time that they are worth, in financial terms, more dead than alive. Then, in order to keep that wealth in the family, the solicitor may influence their decisions on how to distribute that wealth when they are gone.
Summer 2021 dsba.ie Justin McKenna is a partner at Partners at Law, Dun Laoghaire. He is a former President of the DSBA and founding editor of the Parchment. Justin is a member of a volunteer advocacy group called End of Life Ireland – endoflifeireland.ie
The conversation on wills presents the solicitor with an opportunity to instigate the next one: on what should happen prior to death in the event that they might lose their mental capacity. Who makes decisions then? The clients will understand that there are two types of decision: one, on the subject of finances and personal affairs; and the other, on care. It is only since 1996 that we have been allowed to delegate that power to other people. Prior to that, the situation was governed by the Lunacy Regulations of 1871 and, strangely, this piece of Victorian legislation is still with us today but, hopefully, not for long more. The enduring power of attorney may be the solution to the pre-death dilemma but, for some, who wish to continue the conversation to the next level, it is not. For those who have not had this conversation, who have not sought legal advice or asked the questions the only option presently is wardship. In this case proceedings are instituted, usually by next of kin, to have ‘the person of unsound mind’ committed as a ward of court where the PUM (Person of Unsound Mind) is placed into the care of the State and all assets surrendered to the care of the President of the High Court. Our legislators have not come to terms with this antediluvian law but they are working on it. The ADM Act, when commenced, will abolish the Office of Wards of Court. Perhaps, in 2015, it was a pill that was too big to swallow or a needle that was designed for a horse, in any case, while the Office of the Director of Decision Support Services has been established, we have yet to see it work.
However, to get back to that conversation, let us take it to the next level. Who decides how we die? At present, as solicitors, we can advise no further. Unless death is accidental or homicidal our clients will enjoy or endure a ‘natural’ death probably in the hands of the medical profession. If a decision is to be made it is the doctor’s. If the individual receives assistance in the process the assistor may be committing a crime punishable by 14 years’ imprisonment. The third level of the conversation becomes meaningful in the context of a law that allows assistance. The ADM Act provides for advanced healthcare directives (AHDs). The Irish Hospice Foundation, on its website thinkahead.ie, provides an elaborate specimen. It is over 40 pages long. A shorter model may be found on endoflifeireland.ie. If the AHD is to incorporate the ultimate decision it will have to annex an assisted death declaration as envisaged by the proposed legislation. This falls into the remit of the solicitor who will draft it, advise on it and witness the execution of it. In the absence of some form of registration, the solicitor will also be the keeper of it. Since the DwD Bill allows the doctor to withhold certification due to conscientious objection, one supposes the solicitor would also have the right to disengage on the same grounds. Conversations with clients have become more sophisticated in the information age in which we now live. Practitioners must stay in touch with their demands; stay ahead of the law; and lead by initiative. P
Since the DwD Bill allows the doctor to withhold certification due to conscientious objection, one supposes the solicitor would also have the right to disengage on the same grounds
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Multi-Party (Class Action) Litigation Taking the high number of litigation actions against Volkswagen as an example, Marcus Hanahoe assesses how such multi-party litigation cases fare in other legal jurisdictions as compared to here in Ireland
ur company was dishonest with the EPA, and the California air resources board and with all of you, and in my German words: we have totally screwed up”. Lenny Kravitz and his band were backstage waiting to come on as Michael Horn, CEO and President of Volkswagen Group of America, stood in front of a giant digital screen emblazoned with the Volkswagen logo and humbly delivered his company’s confession to a subdued crowd standing in the Brooklyn Naval Yards in New York on Monday 21st September 2015. The event had been intended to celebrate the launch of the 2016 Volkswagen Passat and Kravitz was hired to headline the gathering. Instead, Horn, tasked with delivering the now infamous ‘we have totally screwed up’ speech on behalf of the German brand was the star of the show and his words would carry the next day’s headlines. Three days earlier the US Environmental Protection Agency had served a Notice of Violation on Volkswagen Group alleging that approximately half a million Volkswagen cars sold in the US between 2009 and 2015 equipped with diesel engines had emissionscompliance “defeat devices” installed that bypassed vehicles’ emissions controls to provide falsified test results. Earlier that day, as Horn was no doubt rehearsing his speech, the value of Volkswagen shares was plummeting over 20 percent. A US federal judge sitting in Detroit would later order Volkswagen to pay a $2.8 billion criminal fine for "rigging diesel-powered vehicles to cheat on government emissions tests". When added to a separate $1.5 billion civil penalty, Volkswagen had agreed to pay a total of $4.3 billion to settle the US Justice Department probe.
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This sum was dwarfed by the liability resulting from so-called ‘class action’ lawsuits that followed from the scandal. In the United States alone over 500 individual and class-action lawsuits were filed in almost 70 jurisdictions in the aftermath of the announcement. Within less than three months of the Notice, on 8th of December 2015, the Judicial Panel on Multidistrict Litigation, a special body within the United States federal court system, announced that these multiple claims would be consolidated and heard by a judge in the Northern District of California in San Francisco (where the first US suit was filed) under the title In Re: Volkswagen ‘Clean Diesel’ Marketing, Sales Practices, and Products Liability Litigation 15-MD-2672-CRB (JSC). Settlement talks began early and went quickly guided by the court-appointed settlement master, Robert Mueller (of Trump Mueller-probe fame), and agreement in principle was reached in April 2016. On the 25th of October 2016 Judge Charles Breyer, Senior United States District Judge for the Northern District of California, signed an order approving a €15 billion court settlement between Volkswagen and the owners of approximately 475,000 polluting vehicles. By June 2019, the United States Court of Appeals for the Ninth Circuit upheld the settlement under which Volkswagen agreed to offer the class members between $5,100 and $10,000 in compensation, in addition to the estimated value of the vehicle. By contrast to the experience of American owners where settlement for 475,000 vehicles was reached within 17 months of the scandal breaking, the majority of Europeans have not yet received any compensation despite owning approximately 8.5 million of the affected vehicles. This discrepancy in outcome has mainly been attributed to the fact that until now, European plaintiffs did not have a workable class-action type mechanism for redress.
Summer 2021 dsba.ie Marcus Hanahoe is a solicitor at M.E. Hanahoe Solicitors where he specialises in civil litigation. He is a member of the DSBA Litigation Committee
Individual actions have been taken in various European states but their progress has been noticeably slow, especially when compared to the American proceedings. Examples of such smallerscale multi-party actions exist and have resulted in some compensation being paid out by Volkswagen to European drivers but they are limited, disparate, and inefficient. The largest to date has been an action brought by the ‘Verbraucherzentrale Bundesverband’ (Federation of German Consumer Organisations) which reached a settlement with Volkswagen in February 2020. Under the terms of the deal, consumers will be eligible to receive a compensation package that ranges from €1,350 to €6,257 per vehicle. This settlement will only benefit approximately 260,000 predominantly German owners. In January of this year, a Madrid court ruled in favour of a similar Spanish consumer association, the ‘Organización de Consumidores y Usuarios’, representing approximately 5,400 affiliated consumers and awarded damages totalling €16.3 million amounting to an average of €3,000 per consumer. A Dutch group called ‘the Diesel Emissions Justice Foundation (DEJF)’ is looking to exploit a newly enacted piece of Dutch legislation which enables representative entities to bring claims for damages on behalf of international parties by way of a class-action suit before any District Court in the Netherlands. The group conducted their first Case Management Hearing before the Amsterdam District Court in January and stated their intention to seek redress for other parties in other EU jurisdictions through this forum. The contrast in the 'Dieselgate' outcomes on either side of the Atlantic was noted at the highest levels and sparked concern in Europe that consumer trust in the Single Market was in danger of being undermined.
It also amplified long-running concerns that existing mechanisms to provide redress to harmed consumers were unfit for purpose. In response, the Commission commissioned a report which concluded that previous legislative efforts undertaken at an EU level to implement a consistent and coherent framework for collective redress had failed. Acknowledging this failure, the Commission injected new impetus into finalising new measures for supporting collective redress for consumers, a project that had been languishing in debate chambers in Brussels for decades. The Commission finally presented these new measures as part of a package of legislation in April 2018 under the title ‘New deal for consumers’. These measures included a new Directive intended to maximise the potential of lawsuits to facilitate redress in mass harm situations. Press statements accompanying the publication of the Directive acknowledged that the initiative had largely been prompted by the fallout from “Dieselgate” and was specifically tailored to enable litigants to obtain remedies collectively through a representative action in a manner not previously possible under Union law. ‘Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC’ entered into force on the 24th of December 2020. The 27 EU member states have two years from that date to transpose the Directive into their respective national law (by 25 December 2022). Until the transposition is finalised, as is the case in many European jurisdictions, Irish law does not provide a dedicated compensatory collective redress procedure. Instead, a litigant must choose between several imperfect procedural options which include: (i) joining additional parties to an individual claim, (ii) representative actions,
By contrast to the experience of Americans, whose settlement for 475,000 vehicles was reached within 17 months of the scandal breaking, the majority of Europeans, who own 8.5 million of the affected vehicles, have not yet received any compensation
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It may be the case that to provide the Directive with meaningful teeth and to attract the prosecution of such actions to the Irish Jurisdiction the Irish government may need to reassess the law regarding litigation funding which could have profound implications for the conduct of litigation in this jurisdiction
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(iii) consolidation and co-ordinated hearings of separate actions and (iv) test cases. The Irish government has long been aware of this gap in consumer protection. In 2017 the government convened the ‘Review of the Administration of Civil Justice: Review Group’ chaired by the then President of the High Court, Mr. Justice Peter Kelly. The group’s report, published in October 2020, dedicated an entire chapter to Multi-party Litigation and its perceived failings in this jurisdiction. The report even directly mentioned an incident in 2003 during the launch of the Consultation Paper on Multi-Party Actions where the then serving Minister for Justice, Equality, and Law Reform indicated that the Government would be slow to agree to the idea of a class action procedure because the State was likely to be the main object of claimants. The Minister in question justified this position on the basis that Ireland “did not have the ‘vastly wealthy multinationals’ who were trading in a way that exposed themselves to the Irish consumer”. Circumstances have changed dramatically in the intervening years, particularly in the area of Data Protection, and the Review Group appears to have recognised this need for change in recommending that the status quo alluded to by the Minister be departed from and advocated for the introduction of a new and more comprehensive multiparty action procedure to accommodate mass claims. The Directive will inevitably achieve the review group's recommendations but the procedure has yet to be finalised. Although the Directive seeks to harmonise procedures across the EU it still permits each Member State significant discretion in determining how the Directive’s aims are to be achieved. On the 15th March this year, the Department of Enterprise, Trade, and Employment announced that it was seeking submissions from interested parties regarding the transposition of the Directive into Irish Law. The deadline for submissions closed on Friday, 7th May 2021. The DSBA was one of the parties that advanced a submission to the Department alongside other entities including The Law Society and Bar Council. The Directive will require each Member State to designate at least one “qualified entity” to bring actions on behalf of consumers to litigate situations of ‘mass harm’. To qualify, the entity must i) Be a non-profit organisation in the area of consumer protection ii)
Be independent, and iii) Have a legitimate interest in ensuring the provisions of the Directive are complied with. This procedure was tailored to ensure that nuisance-value settlements (where litigants pursue a meritless claim knowing that settlement would cost less than defending the matter) commonly complained of as an abuse of process and a burden on industry in the United States do not take root in Europe. As a result, consumers are prevented from seeking collective redress through entities such as private law firms and for-profit third-party groups. If consumer organisations such as the aforementioned ‘Diesel Emissions Justice Foundation’, ‘Organización de Consumidores y Usuarios’ or ‘Verbraucherzentrale Bundesverband’ meet the criteria they may seek designation as qualified entities and be empowered to bring collective action cases on behalf of all affected consumers and seek appropriate redress. The question as to how these qualified entities are to fund these actions remains to be resolved. Largescale mass harm actions are inherently risky ventures and require significant investment to commence and maintain. In Ireland, third-party litigation funding is currently prohibited under the torts of maintenance and champerty. In a 2021 paper titled ‘Responsible Private Funding of Litigation’ the European Parliamentary Research Service noted that third-party litigation funding (TPLF) represented a useful tool to support private citizens and businesses in accessing justice and constituted a mechanism for transferring the risk of the uncertain outcome of the dispute to the litigation funder. It may be the case that to provide the Directive with meaningful teeth and to attract the prosecution of such actions to the Irish Jurisdiction the Irish government may need to reassess the law regarding litigation funding which could have profound implications for the conduct of litigation in this jurisdiction. For the consumer, the ramifications of the introduction of these new mechanisms cannot be understated. Aside from compensating class members for past transgressions, the legitimate threat of meaningful, efficient, large-scale litigation acts as a powerful motivator to companies to not only consider their social, environmental, and safety obligations but to adapt their strategies accordingly which benefits society as a whole. Volkswagen provides a notable example. In October 2015, less than a month after Michael Horn’s speech in the Brooklyn Naval Yards, senior Volkswagen executives were attending a three-day crisis meeting at the Rothehof guesthouse in Wolfsburg. Recognising that the company’s future in diesel engines now potentially lay in ruins they agreed on a radical and risky strategy. Emerging from the meeting, Volkswagen pledged €80 billion to develop electric vehicles and buy batteries which the Economist magazine noted at the time as "the biggest commitment to battery power by any car company." The ID3, the electric vehicle intended to replace the diesel (and petrol) powered Golf was officially presented at the International Motor Show in Germany in September 2019. It has been multiplying on Irish streets with zero tailpipe emissions since November 2019. Given that it has been developed by the world’s now largest automotive brand, it has undoubtedly accelerated the race towards an electric, non-diesel, future. P
Summer 2021 dsba.ie John Darby is a consultant at Flynn O’Driscoll Business Lawyers and is a member of the DSBA Commercial Law Committee
Examinership-Lite John Darby provides an overview of the Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill, 2021, which will be an important piece of legislation for SMEs once the pandemic assistance payments are phased out and withdrawn Small Company Administrative Rescue Process 1. Introduction The Government has published a general scheme for the Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 (the “Bill”). This will provide for a dedicated administrative rescue process for small and micro businesses. It is intended to address the need for a simplified restructuring process for viable small companies that is both timely and cost effective. The process will mirror key elements of the existing examinership framework but without the need for Court approval. 2. Who can avail of the Small Company Administrative Rescue Process? The Small Company Administrative Rescue Process is designed for small companies as defined under section 280A of the Companies Act 2014 (the “Act”). Approximately 98% of all companies in Ireland are small companies. Section 280A(3) of the Act provides that the qualifying conditions for a small company are satisfied by a company, if in relation to a financial year, it fulfils two or more of the following requirements: • The amount of turnover of the company does not exceed €12 million; • The balance sheet total of the company does not exceed €6 million; • The average number of employees does not exceed 50. 3. What are the main provisions of the Small Company Administrative Rescue Process? • The process will be commenced by a resolution of the directors of the company rather than by an application to the Court. • The process will be concluded within a shorter time period than an examinership and will seek to arrive at a conclusion within 70 days, subject to extension where necessary for Court applications. • The process will be overseen and assisted by insolvency practitioners called “Process Advisors”, who are appointed by the company to begin engagement with the company’s creditors and to prepare a rescue plan. • There is no automatic stay on proceedings taken against the Company. • The creditors are invited to vote on a rescue plan by Day 42 of the insolvency practitioner’s
appointment. The proceedings in relation to the required meetings of creditors are in keeping with the existing provisions of the Act. A rescue plan may be passed by a simple majority (50.1%) in value of the creditors of the Company. The process will provide for a format of crossclass cram down of debts designed to reduce costs. This means that where one class of impaired creditor votes in favour of the rescue plan, it can be imposed on all classes of creditors. The process does not require an application to the Court for approval of the rescue plan, provided that no creditor objects to the rescue plan within a 21 day cooling off period following the vote. Where an objection to the rescue plan is raised, there is an automatic obligation on the company to seek Court approval. This acts as a safeguard for the creditors of the company. The process will permit the repudiation of contracts by the company with Court approval. The process will have safeguards against irresponsible and dishonest director behaviour. Company directors will be subject to the existing restriction and disqualification regime provided under the Act. The process will provide that State creditors, the Department of Social Protection and the Revenue Commissioners may be excludable from the process. This means that they may determine to opt out of the process on the basis of statutory grounds, for example, if the company has a poor history of tax compliance.
4. What are the requirements for the Rescue Plan? The Rescue Plan must satisfy the “best interests of creditors” test and provide each creditor with a better outcome than a liquidation. P
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Top of his Game In a previous life Brendan Dillon ran a football club that won the FAI Cup and then went head-to-head with the FAI’s John Delaney, while at the same time setting up his highly successful legal practice. Kevin O’Higgins met up with Brendan and talked football, practice set-up, his take on the legal environment for small to medium practices and some tips for younger colleagues thinking of setting up
rendan Dillon is principal of Dillon Solicitors, a mid-size practice in the south Dublin suburb of Rathfarnham. Established in 1993 by Brendan he now has 5 solicitors and 4 legal executives. Nothing extraordinary you might think. But what makes Brendan Dillon’s practice stand out is its trajectory and cultivation of a stellar reputation for excellence, nurtured over a relatively short life span. The Parchment reckoned that Brendan’s story will chime with many colleagues- with those at the start of their career and perhaps contemplating establishing their own practice, and with those some way along that journey. His story is one of chance, some good fortune, unexpected outcomes, availing of sound and sage counsel, but with many bumps along the way. As a lawyer, Brendan has always stood out. As a lover of sports, and football, in particular, Brendan found himself as a football administrator with the League of Ireland and subsequently the FAI. This brought him into contact and conflict with John Delaney. If you have read Champagne Football - John Delaney and the betrayal of Irish football – the inside story you will be aware of Brendan Dillon’s forthright calling-out of Delaney’s failings as played out over many years in the FAI boardroom and ultimately leading to Delaney’s ignominious departure. But throughout all this
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boardroom turmoil Brendan Dillon was running his burgeoning practice. We thought his story would be well worth telling. Brendan, while flattered at the attention, has no interest in a hagiographical rendition of the attributes of Dillon Solicitors. But when pressed, he was prepared to concede that, if his experience could be an inspiration or motivation to other colleagues then he is happy to recount his story – while stressing that there are many other excellent colleagues out there as deserving of such interest. And he is right, and The Parchment intends to seek out those colleagues too but to use the football parlance we are kicking off with Brendan, his story, how he got there and where he is going! Brendan set up on Main Street Dundrum in 1993, before the arrival of the monolithic Shopping Centre which now dominates the area. He had worked for a few years with Murray Sweeney before taking the plunge. The Limerick firm had just established in Dublin. Brendan was still in Blackhall and was surprised to be offered a position with them particularly as the job spec was looking for two years’ post qualification experience! He found it an exhilarating place to work and learnt a huge amount from Joseph Sweeney, Fintan Wallis and others. But he had always contemplated setting up. A school pal had mentioned an office available on Main Street
Summer 2021 dsba.ie Kevin O’Higgins is principal of Kevin O’Higgins Solicitors. He is a former President of both the Law Society and the DSBA. He is a former editor of the Parchment
Dundrum. So Brendan established himself there initially in the private client areas of property, wills, and litigation-but soon branched out into business areas. “The fact that my wife, Ruth, (also a solicitor) then in Hayes, was bringing home a good salary meant that I could take more risks than I might otherwise have done.” This enabled Brendan to dabble in commercial work – with some outstanding successes. “I enjoyed the business side of law and felt an aptitude for it.” He acknowledges the collegiality of colleagues that he knew well enough in some of the larger offices to give him a steer. People such as Eileen Grace in Eugene F Collins and Fintan Wallis then in Murray Sweeney and an old pal Brian Sherry could not have been more helpful – but there were many others. Brendan’s practice was beginning to take off and he agrees with the old adage that you don’t tend to get work from where you might have assumed you might, but you do get work from where you least might have expected it! By this stage he had been maintaining his interest in football, mainly through his long association with UCD where he had served as a player, and then an officer and had proudly seen them beat Rovers in
an FAI Cup final in 1984 in front of 10,000 fans. His football mentor was the brilliant Dr Tony O’Neill and when he became ill, he asked Brendan to succeed him in some of his roles and ultimately Brendan became chairman of the League of Ireland and subsequently one of five FAI officers. In his practice Brendan never chased after football work. Yet through those contacts he found himself acting for UMBRO which led him through another contact to acting in the purchase of Carlisle United FC then in the lowly divisions, and still there! The club owner was a Michael Knighton who had great ambitions and even made a bid to buy Manchester United. Ultimately after a much-protracted deal, and having fired manager Roddy Collins over comments made about the deal, the club went into administration. At that stage, Brendan’s client, John Courtenay stepped in and bought the club and reinstated Collins. Another great success was when he got involved on behalf of a young promising 17-year-old footballer from Cherry Orchard who was snapped up by Coventry FC. The English club offered a derisory £3,000 in compensation. Brendan advised that this was an insult and went all the way to Geneva where the UEFA’s arbitration mechanism ruled in his favour with the Dublin football nursery being awarded £156,000. the Parchment 47
Clients like to do business with people – the trusted advisor who knows and understands their business. But legal services are becoming more niche where it’s just no longer possible for any of us to remain generalists
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As an officer of the FAI Brendan was perturbed at some of the practices he witnessed. He felt it incumbent to call them out and inevitably found himself the bete noir as far as the up-and-coming John Delaney and his then acolyte, the CEO, Fran Rooney were concerned. Their game plan was to implement a merger between both the League and the FAI which many felt was no more than a naked power grab. So, Brendan upped sticks and left it to them. On the plus side was the fact that he now had so much more time on his hand to put into the practice. When another longstanding local colleague Ann Colley suggested that they merge he had the time to think the matter through and has reaped the benefits. This would not have been something that he would have planned for. Likewise, when some years later another local colleague, Sean O’Connell (Gandon Law), made similar overtures Brendan was delighted to merge their practices. Pauline Horkan had been a trainee with Brendan and was happy to remain on when qualified and is now a partner. “Pauline has since become an excellent solicitor with huge experience over a period of 14 years but more importantly understood the ethos and culture of the firm. She had also progressed to a point where she had developed her own client following.” Brendan embraced technology in his practice – but would not describe himself as a techno whizz kid. They operate advanced legal case management and he is a big fan. On the matter of the small practices or sole practitioner he agrees that there will always be a space for the small practice. “Clients like to do business with people – the trusted advisor who knows and understands their business. But legal services are becoming more niche where it’s just no longer possible for any of us to remain generalists.” So, some degree of specialisation seems to be the message gleaned.
Brendan has many more years to give to the law – if that is what he wants. He was 27 years old when he set up and I ask him how that 27-year-old self might look at things now. “In many ways setting up back in 1993 seemed so straightforward compared to nowadays but there are many advantages now that didn’t exist then. For instance, the internet was only in its infancy and certainly was not embraced as a marketing tool back then. Nowadays, firms can announce themselves to the world by clever online marketing plans, useful blogs or articles or google ad campaigns and reach out to a potential audience much easier than was possible 30 years ago. In my view having a niche speciality is a big advantage as clients are much more likely to seek out an acknowledged expert in an area of law that is not regarded as a commodity type service. In my experience areas such as Family Law, Employment, Commercial, Franchising and Tax attract clients whose motivation to hire you is because of your expertise more so than price. Having said that starting up practice can be a lonely existence so consider doing it with someone else with different skill sets. Spreading yourself across the many areas of law is more difficult now than it was years ago. The other piece of advice I would give to anybody considering setting up practice is to constantly look for help from colleagues. My experience has always been that colleagues are only too willing to help where they have expertise in an area where you might not. Look also to your Bar Association, and in my case the DSBA was always a resource for excellent precedents and good colleagues to bounce something off.” Many of us, too, are of an age in practice where the spectre of retirement from law, either getting out of it entirely or moving onto something else, flickers on the horizon. I ask him how he has dealt with that issue and what advice he might give to those of us who have not. “In my case there was no great plan in place from the outset. When you are setting up practice at a young age you tend not to think about a plan that won’t be needed for a long time. It is often the case that the right opportunity presents itself at the right time. In my view mergers may offer that opportunity when it involves an agreement with another practice with a younger profile. Pauline had trained with me. She probably didn’t believe that partnership was an option for a long time which was primarily down to the fact that I probably didn’t give the impression that it was an option. It is something to bear in mind for sole practitioners i.e. if you want to bring people through you have to let them know that the opportunities exist. I think it is fair to say that when you run a practice for a long time “letting go” can be a bar to growing your practice. There is a great quote from Daphne Rose Kingma which I think is very apt “holding on is believing that there is only a past, letting go is knowing that there is a future”. My advice to anyone looking at a succession plan is to hire the right people as there is more likelihood that the succession plan will come from within i.e. from people that you know and can trust having worked with them for many years.” He has some suggestions for younger solicitors in practice. Tips which have worked for him. “Write out the reference you would like your employer to give and live it every day. Be an advisor not a cheerleader. Do the right thing when no one is watching.
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Photography: Bryan Meade
Ask, ask, ask for help. Look out for others. Treat clients and colleagues fairly. Network – you never know where work comes from.” And for proprietors of practices in general, I press him for some sage advice to which he reverts to me after our meeting with the following tidbits. “If you cannot achieve a client’s requirements tell them what you can do for them. Communication is key as is listening to the client and understanding what they need and explaining what is realistic. Manage the client’s expectations from the outset - Ask the client what a good outcome looks like for them. If possible, work in teams – good backup is essential. Try and make sure the workplace is an enjoyable environment – enjoy your successes. Invest in IT and good people. Back your ideas.” And in conclusion I asked Brendan of his big influencers. He cites his parents – but particularly his mother Angela who valued education. His father, Sean, had a furniture showroom – but even from that business, in which young Brendan worked in his student days, he learnt the importance of listening – particularly to the lady – as they frequently make the decisions. He also cites Dr Tony O’Neill who
was almost certainly the outstanding Irish sports administrator of his generation. But I will leave the last word to Brendan on perhaps his biggest influence – namely his wife Ruth. “She encouraged me to set up practice at a time when she had (and still has!) a very well-paid job. She has supported me enormously and has often acted as advisor/counsellor in the many challenges I have had to contend with over the years. She has also allowed me to indulge in my “off-field” passions and in particular my involvement in soccer in various guises. I can only remember one serious rebuke in all our time together. At the time I was running the UCD Super League which is an interfaculty soccer league in UCD consisting of about 60 teams. I arrived home late one evening during which the phone line in the Dillon house had been particularly busy and I was greeted by a note from Ruth with the names and numbers of the 13 team captains who had disturbed her evening. At the bottom of the note was a P.S. “UCD Soccer Club gets a new Super League Secretary, or you might have to get yourself a new Wife!” Of course, I knew she was only joking but just in case, we installed a new phone line with an answering machine a week later. Problem solved and marriage saved! On a serious note, she has been a rock of sense and positive encouragement to me for all the happy years we have been together as indeed have our three wonderful children, Emma, Rachel and Mark.” P the Parchment 49
Practice and Procedure
Gearoid Carey is a senior associate at Mason Hayes & Curran LLP solicitors and a member of the DSBA Commercial Law Committee
Remote Witnessing of Affidavits The remote witnessing of affidavits is now permissible in the Superior Courts by virtue of SI 127 of 2021 (Rules of the Superior Courts (Affidavits) 2021), which came into effect on 31 March 2021. Gearoid Carey analyses the much-welcomed new procedure
It remains the case that all other practical and procedural requirements for the valid swearing of affidavits should be complied with to ensure they are accepted by the Central Office and can be relied upon at hearing
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I 127 of 2021 amended Order 40 of the Rules of the Superior Courts – this development is to be welcomed as modernising and bringing Irish procedure into greater consistency with developments in other common-law jurisdictions. The principal (but not the only) changes are wrought by the revision of Rules 9(2) and (3) of Order 40 and they provide that, in addition to the swearing of an affidavit in the physical presence of the appropriate person before whom it is sworn (defined now as an “officer”), it may also be sworn remotely. In particular, where it is not practicable for the deponent to attend in the physical presence of the officer, the affidavit may now be sworn by “video-conference”, subject to, and in accordance with, the requirements of sub-rule (3) (addressed below), which are designed to preserve the integrity of the remote swearing. “Video conference” for such purposes is broadly defined by sub-rule (4) as “any connection of two or more persons at different locations by means of information and communications technology or combination of such technologies which enables persons remote from one another both to see and hear and to be seen and be heard by one another in real time.” For the purposes of such remote swearing, sub-rule (3) identifies the conditions which much be complied with, which include requirements that the officer shall: • be provided in advance or at the video conference
with a copy of the affidavit and exhibits; • be satisfied as to the deponent’s identity and, if the deponent has to establish their identity by way of a relevant document, the officer must be provided with a certified copy of same in advance or at the video conference; • be satisfied that the video conferencing facility allows the deponent to see and hear the officer (and vice versa); and • satisfy themselves that the appropriate sacred text for taking the oath is be available to the deponent. In addition: • during the video conference and within the sight and hearing of the officer, the deponent must identify each page of the affidavit and exhibits, and sign and swear the affidavit and sign each exhibit; • immediately following the video conference, the signed affidavit and exhibits are to be sent to the officer for attestation; • before attesting the affidavit and signing each exhibit, the officer should be satisfied that the document (and each exhibit) is the same as had been identified to them during the video conference; • if the deponent had to rely on a document to establish their identify, the officer should sign and appendw the certified copy to the affidavit; and • for completion of the jurat, it should indicate the date on which the affidavit was made by the deponent, the place at which the officer was when taking the affidavit and the fact that the affidavit was sworn using a video conference. The above does not purport to be an exhaustive statement of the changes to Order 40 RSC and practitioners should review the relevant provisions and familiarise themselves accordingly. However, it remains the case that all other practical and procedural requirements for the valid swearing of affidavits should be complied with to ensure they are accepted by the Central Office and can be relied upon at hearing. P
Summer 2021 dsba.ie Jessica Hickey is the principal solicitor of Hibernian Law Solicitors. She is chair of the DSBA Probate & Taxation Committee
Credit Union Nominations Jessica Hickey provides an update on the position of Credit Union accounts on death and the advantage of setting up a nomination
recent discussion took place among members of the DSBA Probate and Taxation Committee regarding Credit Union nominations. The Committee had received queries regarding nominations and as a result we thought it would be helpful to set out some information about Credit Union Account nominations. As Credit Unions across the country are offering a wider range of products, they are increasing their market share in the financial sector. The profile of Credit Union members has also changed in recent times and it is therefore very important – when taking instructions on a Will – that a solicitor confirms with a client whether they are a member of the Credit Union and if so, if they have made a nomination of their account. All Credit Union members over the age of 16 years can nominate someone to receive a sum of money upon the Credit Union member’s death. This is provided for under Sections 21 and 22 of the Credit Union Act 1977 (the “1977 Act”). The nominated property does not form part of the deceased member’s estate. There are a number of limitations to nominations. The most important one is the cap. The nominee can receive the balance of the account up to a maximum value of €23,000. In Northern Ireland, this is capped at Stg£10,000. If there is more than one named nominee this amount will be shared equally among
the nominees. Any sum above the cap will form part of the deceased Credit Union member’s Estate. As a nomination is not revokable or variable by the Will of the nominator, it is important to explain to clients that they should regularly review any nominations made. This is particularly the case where there has been a change in circumstances e.g., marriage, divorce or separation. It should be noted that any subsequent marriage of a Credit Union member automatically revokes any nomination made prior to marriage. A nomination is also revoked or fails where the nominee pre-deceases the nominator. A nomination is not revoked by divorce or separation. A nominee can disclaim a nomination and in such circumstances the balance of the deceased Credit Union member’s account falls within the Estate of the deceased. When dealing with the administration of an Estate where there is a Credit Union nomination, Section 22 of the 1997 Act provides that, where the Board of Directors of a Credit Union receive satisfactory proof of the death of the member – and where the nomination is valid – must, in the case of each person entitled under the nomination, either transfer to them or pay them the full value of the property to which they are so entitled. In general, Credit Unions tend to discharge funds to a nominee quite quickly. It can be helpful for family members to have access to such money on the death of a loved one, particularly where funds may be tied up until a Grant of Probate/Letters of Administration issue. P the Parchment 51
Business Interruption Insurance – LESSONS LEARNED SO FAR Litigation surrounding business interruption insurance arising from the closure, either absolute or partial, of premises both here and in the UK have been at the forefront of Covid-19 disputes. Martin Scanlon BL warns that the judgments to date disclose a number of important principles which must be borne in mind by all parties when a business interruption insurance dispute arises Background We now have the benefit of lengthy decisions of the English High Court and the UK Supreme Court in litigation between the Financial Conduct Authority (“FCA”) and multiple insurers under what is known as the Financial Markets Test Case Scheme. The FCA brought the proceedings for the benefit of policyholders, many of whom are small and medium enterprises. The approach taken was to consider a representative sample of standard form business interruption policies in the light of agreed and assumed facts. It was estimated that, in addition to the 21 lead policies chosen for the test case, some 700 types of policies across over 60 different insurers and 370,000 policyholders could potentially be affected by the outcome of this litigation. The Irish judgments to date followed a more traditional litigation path. First, a number of proceedings were brought by a group of publicans against FBD, the insurer. Four similar, but not all identical, claims were chosen to act in effect as test cases in the Commercial Court in an attempt to provide clarity for all of the publicans potentially affected (the “FBD cases”). One of the plaintiffs (the Lemon and Duke Plaintiff) was also able to rely on 52 the Parchment
representations made to it in the inception of its cover just as the pandemic was starting to manifest itself in Ireland. We now have the benefit of two comprehensive judgments from Mr Justice McDonald in these proceedings. A further, detailed judgment has also been delivered by Mr Justice McDonald in litigation between owners of the Clarence Hotel and Axa Insurance.
The Lessons Learned so Far 1. The policy wording itself and the specific factual circumstances are fundamentally important While the above judgments establish some very important and useful principles, they must be read in the context of their own factual circumstances. Needless to say, each policy and clause needs to be considered in its own right. It appears that if the wording of the policy in the FBD cases had been tweaked in a number of ways to a relatively minor extent, the result may have been fundamentally different for the publicans. That has become even more apparent now that we can compare that FBD policy to terms of the AXA policy in the second set of proceedings.
Summer 2021 dsba.ie Martin Scanlon BL is a practising barrister. He was called to the Bar in 2012. This article is based on – and updates – Martin's presentation at the DSBA Commercial Law Committee seminar of 15th April 2021
At issue in the FBD cases was a policy which covered business interruption losses from “imposed closures” arising from “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same”. No definition of “contagious or infectious disease” was set out in the policy. In contrast, the Axa policy provided cover in respect to business interruption losses arising from specified illnesses manifested by a person “whilst at the premises or within 25 miles or within a 25-mile radius of same”. Therefore, there was no need for an imposed closure under this policy but there was a need for an illness specified in the policy. Covid-19 was not specified and ultimately this was fatal to the claim made against the insurer (despite attempts made to link Covid-19 to acute encephalitis, a specified disease). It also appears that many of the policies available only provided cover within a much tighter geographical radius or in respect to an outbreak or an occurrence at the premises. Where that is the case, a policyholder will have much greater difficulty in establishing that the policy conditions were in fact met, especially where the premises may have been closed so soon after the arrival of Covid-19. Various
recent decisions of the Financial Services and Pensions Ombudsman have confirmed that the policyholders who are unable to provide evidence of an occurrence on or within the specified radius can legitimately be denied cover. 2. When attempting to interpret a policy, should you read the terms of the policy first and then consider the surrounding facts or vice versa? While there was no dispute between the parties in the FBD cases as to the relevance of both the policy and the factual background, a dispute arose as to which should be considered first by a court. In particular, FBD appears to have urged the court to consider the context first before considering the terms of the policy. However, McDonald J pragmatically held that it did not ultimately matter which was considered first. Rather, what mattered was that appropriate consideration be given to both the text and the context. The level of weight to be attached to any particular factor will have to be decided in the particular circumstances of the matter at hand. When considering both the terms of the agreement and its
Many of the policies available only provided cover within a much tighter geographical radius or in respect to an outbreak or an occurrence at the premises the Parchment 53
background, a lawyer should also do so from the perspective of a reasonable person at the time the agreement was made and not once a dispute has arisen.
One of the key strands of the insurers’ arguments was that a significant proportion of the losses incurred would have been incurred even if the premises would have been allowed to stay open because of the increased societal reluctance to attend at the premises for fear of catching the virus
3. The regulatory context and the other documents provided along with the policy can sometimes have fundamental consequences for the interpretation of the policy Regulation 34 of European Union (Insurance Distribution) Regulations 2018 (S.I. No. 229 of 2018) requires insurance “distributors” to provide a consumer with an Insurance Product Information Document (IPID) which sets out objective information about the proposed policy in a short and easy-to-understand document. In the FBD cases, FBD provided both a standard-form Features and Benefit Document and an IPID in accordance with Regulation 34. McDonald J held that these documents do form part of the factual matrix when considering the meaning of the policy itself. Given the requirement for these documents to be short though, their relevance shouldn’t be overstated and generally a policyholder will remain under an obligation to satisfy itself as to the scope of the cover by reference to the actual policy itself. However, McDonald J did suggest there could not be material departure in the IPID from what is stated in the policy. Therefore, lawyers faced with either drafting or interpreting the clause of a policy need to be aware at a minimum of the fact that the policy wording itself is unlikely to always be the sole determinant. Rather, other documents provided in addition to the policy itself will be relevant to varying degrees, particularly where those documents must be provided in accordance with Regulation 34 of the 2018 Regulations.
4. It is important to understand the differences between similar phrases denoting causation Significant amounts of time were spent in the FBD cases in attempting to divine the correct legal effect of using what often tend to be little-considered words and phrases such as “as a result of ”, “resulting from”, “following”, “in consequence of ” and “arising directly from”. It was ultimately held by McDonald J that the use of “following” in the relevant clause did not simply relate to a temporal issue. In other words, “following” in this context did not simply require the second event (the closure) to happen after the first event (the outbreak). “Following” also had some causative element although not a requirement to be a proximate cause in the same manner as “in consequence of ”, “as a result of ” or “resulting from” would do. One of the supporting circumstances for the conclusion was the fact that “as a result of ” and “following” were used in fairly close proximity to one another in the relevant clause, suggesting that the drafters intended them to have different meanings. It is again clear though that “following” will not necessarily have the same meaning in the context of a different policy. 5. There can be more than one proximate cause of an insured peril and the existence of two (or more) proximate causes won’t necessarily deprive an insured of cover A fundamental issue in both jurisdictions related to how a court should treat a situation where there are overlapping proximate causes. At simple level, one could be faced with a situation where a man is shot by two persons and either bullet would on its own have led to his death. The question arises as to who is then responsible for his death. In a pandemic, this principle is multiplied as it can be impossible to identify which individual case or cases of Covid-19 resulted ultimately in a closure, particularly where the closures are imposed on a nationwide basis. Where there are multiple proximate causes, like this scenario, would this deprive an insured of the benefit of its business interruption indemnity? The UK Supreme Court and McDonald J were in agreement that it didn’t necessarily have to deprive an insured of the benefit of his business interruption policy. Again though, the result would have been different if the insurer had a sufficient exclusion in the policy terms. 6. A pure application of the but for test is not appropriate in these particular circumstances The usual rule is that an insured is entitled to be indemnified by the insurer in respect of those losses which the insured can prove would not have arisen but for the happening of the insured peril. However, one of the key strands of the insurers’ arguments in both jurisdictions was that a significant proportion of the losses incurred would have been
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incurred even if the premises would have been allowed to stay open because of the increased societal reluctance to attend the premises for fear of catching the virus. As a result, it was argued that an insured should only be entitled to recover the difference between what it would have recovered if it had been allowed to remain open as this was the appropriate counterfactual. Both the Irish and the UK courts held that a rigid application of the “but for” case was not merited in circumstances like the present where the outbreaks where causative both of change in societal behaviour and the eventual imposed closure. As a consequence, it was not appropriate to apply the counterfactual suggested by the insurers. As it had been held to be improper to separate the cause of the societal changes from the cause of the closures, business affected were held to be entitled to cover from losses in respect of outbreaks outside of the 25-mile radius even though that wasn’t a component of the insured peril.
7. The partial opening of the business will not necessarily result in a denial of cover The Irish and UK courts are also in tentative agreement (in respect of the various clauses considered) that a limited opening of premises, such as the opening of pubs for takeaway service only or a limited area of the premises for the purpose of serving a substantial meal, will not definitively mean that the other parts of the premises are not “closed” and, therefore, covered under the policy. Again though, the inclusion of a comprehensive clause which specified that only a complete closure of the premises was covered under the policy would have defeated this point. The issue as to whether a pub serving a substantial meal throughout the premises is “closed” has been left over to the quantum hearing in the FBD cases as has the issue of whether a premises which voluntarily closes or chooses to remain closed due to its inability to function as normal is covered. P the Parchment 55
Covid Pandemic – IMPLICATIONS FOR
COMMERCIAL LEASES Paul Binchy BL addresses some of the legal issues that arise in connection with commercial leases as a consequence of the Covid pandemic
Introduction The first point to note is that the Irish legislature has chosen not to interfere in the relationship between commercial landlords and tenants as part of its Covid emergency measures. This is in contrast to the position in relation to residential tenancies where the legislature has, amongst other things, imposed a ban on terminating such tenancies during the current Covid restrictions. Accordingly, the relationship between the parties to a commercial lease remains governed by the terms of the relevant lease.
Department of Business, Enterprise and Innovation Code of Conduct Although the legislature has chosen not to intervene in relation to commercial leases, in October 2020, the Department of Business, Enterprise and Innovation issued a code of conduct between Landlords and Tenants for Commercial Rents. The Code is voluntary with no statutory basis. The Code states that landlords and tenants affected by Covid should endeavour to negotiate an arrangement whereby the tenant can pay what he can. The Code says that a tenant seeking a concession should be clear why this is needed and support his request by providing financial information about his business. In turn, a landlord who refuses to make any concessions should be clear to his tenant why he is doing so and provide a reasonable 56 the Parchment
explanation of his decision which clearly takes into account the information provided by the tenant.
Doctrine of Frustration In the absence of legislative intervention, the question arises as to what effect does the Covid crisis have on the respective parties’ rights/obligations in a commercial lease. In theory, it might be open to a tenant, who has been required to close his business by Covid measures, to rely on the doctrine of frustration to claim that his lease is at end. However, under the doctrine, if a contract is frustrated, that operates to terminate all of the parties’ rights and obligations under the contract. This was made clear in the recent case of Oyster Shuckers Ltd v Architecture Manufacture Support (EU) Limited ( IEHC 527) where the High Court held that it was not open to a tenant to claim that his obligation to pay rent under a lease had been frustrated or suspended as a result of the Covid crisis whilst at the same time maintaining that he was entitled to remain in occupation of the relevant premises under the lease. Consequently, the doctrine of frustration may be of limited use to a tenant who wants his rent suspended but still wants to remain on in the premises. On the other hand, a tenant who has been forced by law to close his business could, in theory, invoke the doctrine of frustration to have the whole lease
Summer 2021 dsba.ie Paul Binchy is a practising barrister who was called to the Bar in 1995. He specialises in Commercial/Chancery law. This article is extracted from a paper the author delivered to a DSBA Seminar on 30 March 2021
terminated. However, in practical terms, the number of instances where a tenant could avail of frustration is likely to be relatively small. In this regard, the average term of a commercial lease in this jurisdiction is in excess of 10 years. A tenant, who holds his premises under such a lease which still has number of years to run, is unlikely to be able to invoke the doctrine of frustration. This is because the relatively short duration of any Covid measures requiring him to close his premises when compared to the duration of the lease is unlikely to be regarded as sufficient magnitude to frustrate the lease. The English case of National Carriers Ltd v Panalpina (Northern) Ltd ( 1 All ER 161) is instructive in this regard. In that case, a tenant held a property under a 10-year lease. Due to a road closure which commenced in the fifth year of the lease, the tenant was unable to use the premises for 18 months. The Court of Appeal in the UK held that, whilst a lease is capable of being frustrated, the period during which the tenant was, in this case, prevented from using the premises was not sufficient to frustrate the lease. However, a tenant who is operating under a short lease might be able to make a case for frustration if the period during which he is required to close his premises comprises a significant portion of the term of the lease.
Rent Reviews Commentators have suggested that the increase in home working which is likely to continue after the pandemic will reduce the demand for office space and will thereby reduce commercial property values including, presumably, commercial rents. Whether such a decrease in commercial rents is likely to be of any benefit to a tenant in the context of a rent review depends on when the relevant lease was executed. In this regard, section 132 of the Land and Conveyancing Law Reform Act 2009 (which came into force on 28 February 2010) bans upwards only rent reviews. However, section 132 does not apply where the lease or the agreement for lease pursuant to which it was executed was entered into prior to section 132 coming into force. Accordingly, if the lease (or the agreement for lease pursuant to which the lease was executed) was entered into before 28 February 2010 and it contains an upwards only rent review (which was the norm for leases executed prior to the 2009 Act), the tenant will not be able to get the benefit of any general reduction in commercial rents caused by Covid when the rent comes up for review.
Rent Reductions/Equitable Estoppel There will be many instances where a tenant, who has been legally obliged to close his business as a result of government measures or has otherwise suffered a the Parchment 57
A company which is considering examinership with a view to reducing its rental costs by means of repudiating it leases would be well advised to try and negotiate rent reductions with its landlords before applying to have an examiner appointed
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loss of business as a result of the pandemic, will seek to agree a rent reduction with his landlord. A landlord needs to be aware that, if he agrees to such a reduction, this may give rise to issues of equitable estoppel as happened in The Barge Inn Limited v Quinn Hospitality Limited  IEHC 387. In that case, a landlord, who agreed to reduce his tenant’s rent in circumstances where the tenant was suffering a fall-off in business as a result of the financial crisis, was held to be estopped from withdrawing the rent reduction for so long as the tenant’s business continued to be adversely affected by prevailing economic circumstances in the manner it was affected when the reduction was agreed. Accordingly, in order to avoid an argument that he is estopped from withdrawing it, a landlord who agrees a rent reduction with a tenant should ensure the terms on which the rent has been reduced (including, in particular, the duration of the rent reduction) are set down in a formal agreement between the parties. In turn, a tenant should seek to ensure that any agreement is under seal to avoid any subsequent argument by the landlord that it is unenforceable in the absence of consideration.
Landlord’s Remedies for Non-payment of Rent In circumstances where many tenants will not be able to pay their rent as a result of the pandemic, landlords may need to consider what remedies are available to them in respect of their tenants’ failure to pay rent. In this regard, a landlord can bring simple debt recovery proceedings seeking judgment against his tenant in respect of arrears of rent. Alternatively, a landlord may wish to consider forfeiting the lease. In order to validly effect forfeiture, the landlord must either re-enter the premises or take court proceedings seeking possession. As far as re-entering the premises is concerned, this must be done peaceably and it is not permissible for a landlord to effect reentry if this can only be done by forcibly removing the tenant or otherwise using excessive force. However, in the recent case of Hafeez v CPM Consulting Ltd  IEHC 536, it was held that minimal force such a breaking and replacing a lock is permissible. In the circumstances of the pandemic where, in many situations, tenants will not be in active occupation of the premises, effecting forfeiture by re-entry may be a more feasible option than was formerly the case. Whilst a Court facing an application for possession against a tenant who has been unable to pay his rent due to Covid is likely to be quite sympathetic to the plight of the tenant, there is no real basis on which the Court could decline to make an order for possession against the tenant in such a situation. In this regard, a tenant, whose landlord is entitled to forfeit the lease due to arrears of rent, is entitled to apply to Court relief against forfeiture. However, it is a prerequisite to such relief that the tenant pays the rent up to date. Accordingly, where a tenant cannot pay his rent (albeit through no fault of his), a court will be left with no option but to grant possession to the landlord. Consequently, there may be very little a tenant, who cannot pay his rent because of the Covid crisis, can do if faced with proceedings for possession by his landlord. One possibility might be to invoke the Code of Conduct between Landlords and Tenants
for Commercial Rent (discussed above) and argue that a landlord who has not engaged with the tenant pursuant to the Code should not be entitled to an order for possession. In the Hafeez case (referred to above) the tenant sought to impugn his landlord’s purported forfeiture of his lease for non-payment of rent and relied on, amongst other things, the Code. It is not clear from the report of the case whether the tenant was claiming that the landlord had failed to engage with the tenant under the terms of the Code and, consequently, the landlord was not entitled to forfeit the lease. In any event, in refusing to grant the tenant relief, Mr Justice Keane said it was not clear to him how the Code would add to or subtract from either party’s case. In refusing relief, the judge appears to have been influenced by the fact the tenant had a repeated history of late payment of rent prior to Covid and that there were allegations by the landlord of other breaches of covenant. Whilst it was of no avail to the tenant in the Hafeez case, if a tenant facing a proceedings for possession, who otherwise has a good history of paying rent prior to Covid, can demonstrate that the landlord has not made any attempt to engage with him under the Code, that might form a basis for the Court, at the very least, adjourning the landlord’s application for possession to allow the parties to engage under the terms of the Code.
Commercial Leases in Examinerships The economic downturn caused by the Covid crisis has already seen a number of high profile companies apply for examinership. Examinerships can have significant consequences for landlords in commercial leases and it is not uncommon for tenants who hold property under what they regard as onerous leases to try and use the examinership process as a means of getting out of those leases as is demonstrated by the recent unsuccessful attempt by the New Look Group to have an examiner appointed (In The Matter of New Look Retailers (Ireland) Ltd  IEHC 514). In this regard, the Companies Act 2014 contains provisions which allow a lease, to which a company in examinership is party, to be repudiated as part of a scheme of arrangement put forward by the examiner. Such repudiation must be sanctioned by the Court. In this context, the New Look case, referred to above, is of interest. In that case, New Look operated a clothes retail business in 27 stores throughout Ireland. The company presented a petition for the appointment of an examiner in August 2020 on the grounds that it had made significant losses as a result of the Covid crisis. It was clear from the petition that the company’s rental costs were a significant issue and that the company was claiming that these would have to be reduced if the company was to survive. The petition was opposed by a number of the company’s landlords who were presumably concerned that, if the company went into examinership, the threat of their leases being repudiated would force them to agree to a reduction in rent. There was a dispute between the parties as to whether New Look satisfied the insolvency requirements in the 2014 Act for the appointment of an examiner. Mr Justice McDonald determined that
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New Look was likely to be become insolvent in the first half of 2021 and, accordingly, concluded that the company satisfied the insolvency requirements in 2014 Act. However, he nonetheless refused to appoint an examiner in circumstances where, despite the fact that petition for examinership was presented on the basis that the company’s rental costs would have to be reduced if the company was going to survive, the company had not made any meaningful attempts to negotiate with its landlords with a view to having its rents reduced. In circumstances where the company was not yet insolvent and there was still time for it to try and negotiate with its landlords, the judge concluded that the company should be required to make serious attempts at such negotiation before seeking the appointment of an examiner. In the light of the above, a company which is considering examinership with a view to reducing its rental costs by means of repudiating its leases would be well advised to try and negotiate rent reductions with its landlords before applying to have an examiner appointed. Whilst a lease can be repudiated as part of the examinership process, if no such repudiation takes place, a scheme of arrangement put forward by the examiner cannot, without the landlord’s consent,
contain a provision reducing rent which is payable after the examinership has concluded. This is in contrast to rent accrued prior to the appointment of an examiner or rent accrued whilst a company is in examinership which can be written down as part of a scheme of arrangement proposed by the examiner. Finally, commercial leases frequently contain guarantees in favour of the landlord in respect of the tenant’s obligations. The 2014 Act contains a number of provisions which impact such guarantees which landlords should be aware of. First, a landlord who has a guarantee in respect of a tenant who has gone into examinership is precluded from enforcing the guarantee during the course the examinership. Secondly, once the examinership concludes the landlord’s entitlement to be paid under the guarantee will not be affected by the fact that amounts due to him by the tenant have been written down as part of a scheme of arrangement approved by the Court. Thirdly and probably most importantly, in order to preserve his entitlement to enforce the guarantee, the landlord must make an offer in writing to the guarantor offering to transfer to the guarantor the landlord’s right to vote at the relevant meeting convened for the purpose of considering the scheme of arrangement being put forward by the examiner. P the Parchment 59
DUBLIN CIRCUIT COURT As per the Order of the President of the Circuit Court dated 6th of April 2020, where cases are settled and require to be struck out or other consent orders need to be ruled, during the current restrictions, these will continue to be dealt with by email requests from both parties and will be ruled by the County Registrar without the necessity of parties being present in court. The following dedicated mailbox has been set up to deal with such consent applications only by the County Registrar for Dublin. Dublin Circuit Family Law: email: email@example.com
Dublin Circuit Court Civil: email: firstname.lastname@example.org To apply for a ruling/order on consent, one single email ONLY from the moving party must contain all of the following: (a) the correct details of the case and correct record number; (b) the exact terms of the order sought to be made/ruled on consent; (c) the written consent of the solicitor for the other party to the making of the consent order; (d) a copy of the relevant Notice of Motion/ Notice of Trial;
(e) where necessary the relevant exhibits ONLY; (f) the date the matter is listed before the Court or confirmation nothing is listed for hearing. (g) if a matter is urgent this must be highlighted by the Applicant in the subject line of the email. All such applications should be accompanied by a sworn affidavit. If this is not followed the email will not be acted upon and will not be replied to. Other emails sent incorrectly to the consent email address will not be replied to.
NEGATIVE INTEREST RATES AIB MESSAGE FROM THE DSBA PRACTICE MANAGEMENT COMMITTEE Attention is drawn to introduction by banks and in particular AIB’s imposition of negative interest. AIB have indicated by way of a 65-day notice that negative interest will be imposed on solicitors’ accounts on the expiry of 65 days from the date of notice. On the expiry date known as the “application date” if the Solicitors’ accounts are cumulatively in excess of €1 million, interest will be applied at a rate of .5% (one half of one percent) per annum on the balance on that date and each daily closing
balance on the solicitor’s accounts for a period of months from the application date. Practitioners should check with their bank, to make sure that any set off arrangements between overdraft on office accounts are not affected by any charge of negative interest. If the practice balance is in excess of €1 million on the application date all balances and not balances in excess of €1 million will be charged negative interest. Negative interest rates on or after the
application date will subsist for two months and will be reviewed by AIB. There is no guarantee at this stage that: a. After the two month period negative interest rates will be discontinued; b. That the €1 million may be reduced to another figure say €500,000 and the regime continues as above. Practitioners are advised to contact their own bank for clarification of the effect of the negative interest rates on their practice. Clearly, solicitors will have to pass on the negative interest rate charged by AIB. Further, there will be an extra burden on solicitors’ practices to compute: 1. How much negative interest has to be deducted from each client; 2. A fee structure together with VAT in computing such negative interest; 3. Communication of these charges i.e. interest, professional fee for calculating the negative interest to clients. It is further noted that AIB can charge negative interest on combined balances held by solicitors on behalf of clients in excess of €1 million when that balance is: a. Variable on a monthly basis; b. The interest rate currently at .5% is also variable on a monthly basis. Practitioners should communicate with their clients to: 1. Make clients aware of the existence of negative interest rates; 2. Explain how the interest rate will affect the client in relation to the rate itself and the legal fee and VAT chargeable as set out above. Ruadhan Killeen on behalf of the DSBA Practice Management Committee
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HIGH COURT ORDERS To obtain orders online the following will assist. To request a plain copy Order send email request to: HighCourtBespeaks@courts.ie For an attested copy Order, to be collected in Central Office on the day following the request, email request to: email@example.com For Bail orders, injunctions, Orders required for appeal (where there is insufficient time to apply by email) or any other Order which is urgent or time-bound can be provided at the public counter in the Central Office. The Order in this case is now perfected, for an attested copy please email: firstname.lastname@example.org, for a plain copy please email email@example.com Please note that €15 stamp duty applies to any printed order, whether attested or not, subject to the usual exemptions. Barra O Cochlain, DSBA Litigation Committee
NEW RULES ON REMOTE SWEARING OF AFFIDAVITS A new statutory instrument was published in Iris Oifigiúil on 26th of March 2021 which amends Order 40 of the Rules of the Superior Courts to provide for remote swearing of affidavits and the use of a business address by a deponent, where appropriate. The new Rules should assist solicitors in circumstances where it may not be practicable for a client to attend a solicitor’s office for legitimate reasons, such as the need to self-isolate or restrict movements due to Covid-19. Rule 9(2) allows an affidavit to be sworn by a deponent by videoconference, where it is not practicable for the deponent to attend in the physical presence of the authorised person before whom the affidavit is being sworn (“the Officer”). Rule 9(3) sets out the following conditions that must be complied with in relation to remote swearings: • the Officer shall be provided in advance or at the videoconference with a copy (which may be in electronic form) of the affidavit, copies of any exhibits referred to in it and a certified copy of the relevant document intended to be used to verify the deponent’s identity; • the Officer shall be satisfied that the videoconference facility enables the deponent to see and hear the Officer and to be seen and heard by the Officer; • the Officer shall ensure identification of the deponent has been met before the affidavit is sworn;
• the Officer shall be satisfied that the appropriate sacred text for taking the oath is available to the deponent; • during the videoconference and within sight and hearing of the Officer, the deponent shall produce the original of any relevant document intended to be used to verify the deponent’s identity; shall identify each page of the affidavit and any and every exhibit referred to in it, shall sign or mark any and every exhibit, and shall sign and swear the affidavit; • the sworn affidavit and any and every exhibit referred to in it shall immediately following the videoconference be sent to the Officer, for attestation by the Officer; • the Officer shall before attesting the
affidavit and signing or marking any and every exhibit referred to in it, be satisfied that the document (and each and any exhibit) is the same as that which had been identified to him/her during the videoconference and, where relevant, sign and append to the affidavit the certified copy of the relevant document used to verify the deponent’s identity, and • the jurat of the affidavit shall indicate the date on which the affidavit was made by the deponent, the place at which the Officer was when taking the affidavit and the fact that the affidavit was sworn using a videoconference. Joe O’Malley, DSBA President
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Reasons must be Stated The High Court has recently considered a Labour Court judgment and the reasoning provided in that decision in the case of the State of Kuwait v Nada Kanj  IEHC 395. Siobhán Lafferty outlines how the appeal of the Labour Court’s decision was allowed and that the case was remitted back for a further determination
Background In this case, the Complainant was employed at the Kuwaiti Cultural Office (the “Appellant”) in Dublin as an academic adviser from 2007 to 2017. She brought a claim to the Workplace Relations Commission (“WRC”) under the Unfair Dismissals Acts 1977-2015 against the Appellant for her dismissal from her role. The Appellant argued that the WRC did not have jurisdiction to consider the complaint as the Appellant was claiming sovereign immunity. The WRC agreed with the Appellant on that point. The WRC decision was thereafter overturned by the Labour Court whose determination found in favour of the Complainant. This was based on customary international law, and in particular the provisions of Article 11.2(a) of the United National Convention on Jurisdictional Immunities of States and their Property, 2004 (the “Convention”). The Labour Court therefore found that the Complainant was entitled to maintain her claim and that the Appellant could not invoke sovereign immunity.
Appeal Before the High Court The main issue before both the WRC and the Labour Court was whether the Complainant’s role as academic adviser could be held to have been engaging in the 62 the Parchment
exercise of governmental authority on behalf of the State of Kuwait. The Appellant appealed the determination on a number of grounds, including: • that the Labour Court failed to engage the evidence that had been before it and had failed to give reasons for the conclusion that it reached at the end of the determination; • that the Labour Court had applied the wrong test and in particular they had looked for extra factors other than those specified in Article 11.2(a). Counsel for the Complainant argued that the High Court’s role was limited on appeal on a point of law and that therefore the Court was not entitled to assess the correctness of the decision reached by the Labour Court but rather just to assessing its lawfulness. It was further argued that when the decision was considered as a whole, it was a comprehensive decision and therefore it could not be suggested that the reasons for the decision were unknown, even though the final decision was relatively short. It was also pointed out that the decision had considered Irish case law, as well as the case law from the European Court of Human Rights and the Court of Justice of the European Union.
Summer 2021 dsba.ie Siobhán Lafferty is a solicitor at Reddy Charlton and specialises in Employment and Regulatory law
Submissions on Behalf of the Parties As noted, the Appellant argued that the Labour Court had failed to provide any, or any adequate reasons, as to why it had reached the conclusion that it had. There was a clear conflict in evidence between the parties, and that additional to the oral evidence procured, there was documentary evidence showing that the Complainant had a Master’s degree and was in receipt of a salary (including expenses) of around €44,000. It was also shown that there had been an annual fund of approximately €50million disbursed among around 500 Kuwaiti students in Ireland. These factors, it was argued, showed the high level in terms of responsibility and financial importance of her role. The point here was that the Appellant sought to show that there was evidence which the Labour Court had not engaged with; and while on the one hand the Labour Court had provided a summary of the evidence and the law with a conclusion, it had not given reasons for coming to that conclusion. The Appellant also argued that the Labour Court had failed to explain its reasons for departing from certain case law on the issue of sovereign immunity, including the Supreme Court case of Government of Canada v Employment Appeals Tribunal and Burke  2 IR 484.
Finally, the Appellant argued that the Labour Court had applied the wrong test. It viewed the Labour Court’s determination to mean that it had applied a three-tier test in that the Complainant’s role did not involve either: (i) the exercise of any public powers; or (ii) governmental authority; and (iii) did not touch on the business of the State of Kuwait. It was argued that this placed the threshold too high as Article 11.2(1) of the Convention provided only that the employee had to be engaged to perform functions “in the exercise of governmental authorities.” Thus the Appellant argued that further to these two issues, the Labour Court had erred in law and the decision should be set aside. On the other hand, the Complainant argued that the High Court was not entitled to overturn the decision merely because it would have come to a different conclusion on the evidence. Further, it was submitted that in looking at the determination, the High Court must look at the entirety of the decision and not just the concluding paragraphs thereof. It was pointed out that when looking at the decision as a whole, it was clear that the Labour Court had
While on the one hand the Labour Court had provided a summary of the evidence and the law with a conclusion, it had not given reasons for coming to that conclusion
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This case acts as a strong reminder of the requirements on such bodies to provide clear reasons for their decisions, and to outline which evidence they prefer when necessary
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had regard for all of the evidence – both oral and documentary – that was before it, and had made frequent reference to the Government of Canada case. Essentially it was put forward for the Complainant that it was quite clear that the Labour Court had preferred the Complainant’s evidence and that that was a finding which was open to the Labour Court on the basis of the evidence before it. The Complainant also outlined that the Labour Court had taken the case law into consideration in some detail and thereafter come to its conclusion, making the decision unimpeachable. Finally it was also submitted that the Labour Court had not applied the wrong test with regard to Article 11.2(a) as they were essentially just different ways of saying the same thing. It was put that the essence of the provision was that the employee must exercise some degree of governmental authority, or policy, on behalf of the state by which she was employed and there was no evidence that the Complainant did that.
Judgment Barr J considered the above and highlighted that the general duty to give reasons is well established in Irish law. He referred specifically to the Court of Appeal case of Bank of Ireland Mortgage Bank v Heron  IECA 66 which “makes it clear that where there is a conflict of evidence between the parties, it is essential that the decision maker engages with the evidence and resolves the conflict one way or the other”. If directors act in good faith, honestly and responsibly, Courts will be slow to impose personal liability in light of the pandemic, but this will require pro-activity and demonstrable evidence for their actions, in line with the ODCE Guidelines and the case law examined herein. Having regard to other cases, Barr J pointed out that it was particularly important to cases where there was a dispute of evidence, and that a judge must explain why certain evidence was preferred over other evidence. He noted that while the Heron case referred to the duty of a court to give reasons, he was satisfied that such a duty applied to all decision makers. He noted that “the decision maker is entitled to reach whatever decision he or she regards as appropriate on the evidence, but it is incumbent upon them to state clearly why they are accepting certain evidence and rejecting other evidence called on behalf of the opposing party.” Further, Barr J also referred to the well-known employment case of Nano Nagle v Daly  IESC 63 and McMenamin J’s position that the statutory duty under which the Labour Court operates provides that, on request, it should set out a statement of ‘why’ it reached its determination. In considering these in light of the case before him, he outlined that the key issue was that of whether the role of academic adviser was involved in rudimentary administrative tasks or in fact whether it could be said to involve the implementation of policy or governmental authority of the State of Kuwait. Barr J considered the conflicting evidence that was before the Labour Court. He noted that the
Labour Court was entitled to come to a conclusion that it preferred one set of evidence to the other, but also that it was obliged to set out the reasons why it was rejecting some or all of the evidence led by the Appellant. The judge considered that the determination provided a detailed summary of the background facts, evidence and law in the area, but then went on to make a bald conclusion, without any explanation as to how it reached that conclusion. He did not consider that the Labour Court had engaged with the conflicting evidence or why it had decided to prefer the evidence of the Complainant. He stated that “In essence, the Labour Court had to state clearly why it came to the conclusion that the claimant did not come within Art. 11(2)(a) of the Convention. It did not do that.” On the basis that the Labour Court did not set out its findings of fact and thereafter apply the relevant legal authorities, he allowed the Appellant’s appeal on the ground that the Labour Court failed to give adequate reasons for its decision. Barr J also allowed the appeal on the ground that the Labour Court appeared to have applied the wrong test, to the extent that it appeared to have applied three factors in determining whether or not the Complainant came within the provisions of Article 11.2(a) of the Convention. He viewed that the Labour Court’s position was that the Complainant did not involve either the exercise of public powers, or governmental authority and did not apply to the business of the State of Kuwait, that this was a three part test for sovereign immunity to apply and was not the correct interpretation of Article 11.2(a); it merely required that the employee be recruited to perform particular functions in the exercise of governmental authority. As a result, the High Court was satisfied that the Labour Court committed an error of law in applying the wrong test in determining whether sovereign immunity was available in the circumstances of the case. The appeal was also allowed on this ground of appeal. Therefore the Labour Court’s determination was set aside and the case was remitted back to the Labour Court for determination.
Conclusion There is no doubt that this is a time of change for disputes in employment law. Further to the Zalewski case  IESC 24, procedural changes to the Workplace Relations Commission and the Labour Court are set to take place. This case acts as a strong reminder of the requirements on such bodies to provide clear reasons for their decisions, and to outline which evidence they prefer when necessary. Otherwise the Labour Court may well find itself subject to further appeals on this basis. Finally, it will be worth keeping an eye out for the remitted judgment of the Labour Court in this case. The substantive issue of sovereign immunity in this case is particularly interesting, especially where the employee’s position with the Kuwaiti Cultural Office appears to be so marginal in terms of whether sovereign immunity will cover the Office or not. P
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