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Important Information for Legal Practitioners

High Court Costs

http://www.irishstatutebook.ie/

 

Practitioner’s attention is brought to the recent High Court Practice Direction HC 71 “Payment on account of costs pending taxation” see full text below, The Practice Direction to be commenced on the 24th April 2017.

 

Review of New Practice Direction

This is most welcome news for Practitioners of High Court cases, as we all know that Taxation of Legal Costs is time consuming and in many cases it can take up to a year or even longer to recover legal costs that are in dispute by the paying party whether that be by way of negotiation and or proceeding to Taxation.

 

One of the difficulties that may arise in an application to the High Court for an Order of “Payment on account of costs pending Taxation” is that the parties and indeed the Court may not know the value of a particular case in order to allow for a reasonable sum on account of costs in favour of the successful party.

 

In recent cases were the Court has opted to measure costs the Court has directed the successful Plaintiff /Defendant Solicitors to procure a Legal Costs Accountants report be furnished to the Court in order that a value can be put on the case for the nature and the extent of the work done in accordance with Section 27 of Courts and Courts offers Act, 1995.

 

It may be of benefit for Practitioners to obtain a valuation/report from a their Legal Costs Accountant prior to making an application under the new practice direction as Solicitors are required to give an undertaken “in the event of taxation realising a smaller sum than that directed to be paid on account, such overpayment will be repaid”

 

Update on Sheehan v Corr Court of Appeal Judgement 10 July 2016.

As many practitioners are aware that the case of Sheehan v Corr was appealed to the Supreme Court and leave to Appeal was granted on the 26th September 2016 The Court is satisfied that the applicant has raised issues of general public importance and granted leave to appeal.

 

The Appeal was heard on the 21st February 2017. Wherein the Supreme Court was pleased to reserved Judgement on a number of issues that were canvassed  in the course of the Appeal.

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it would appear from the Legal Diary  that a decision is expected from the Supreme Court on the 15th June 2017.

 

Further information is available on the Court Services website as per the “Direction Hearing”judgement- courts.ie/Judgments.nsf/0/08CBE804A468039F8025803B00422A07

 

HC71 - Payment on account of costs pending taxation

Notice and practice direction

 

In view of long delays in the taxation of costs, the attention of practitioners is drawn to the provisions of Order 99, rule 1B (5).

 

I direct that in all cases where there is no dispute as to the liability for the payment of costs and in any other case which a judge thinks appropriate, an order may be made directing payment of a reasonable sum on account of costs within such period as may be specified by the judge pending the taxation of such costs. Such orders may be made on an undertaking being given by the solicitor for the successful party that, in the event of taxation realising a smaller sum than that directed to be paid on account, such overpayment will be repaid.

 

This practice direction shall come into effect on Monday, 24th April, 2017.

 

Dated 28th March, 2017

Peter Kelly,
President of the High Court

 

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LEGAL SERVICES REGULATION ACT 2015

 

 

The Legal Services Regulation Act 2015 was published on the 30th December 2015 we have set out below some of the changes that will come into effect once the Act is commenced by the Minister for Justice and Law Reform  by way of  Commencement Order.

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By way of S.I.  No. 383 of 2016  on The 19th day of July 2016 is fixed as the day on which the following provisions of the Legal Services Regulation Act 2015 (No. 65 of 2015) shall come into operation: (a) Part 1, other than section 5; (b) Part 2, other than— (i) paragraphs (c) to (f) of section 13(2), (ii) section 31, (iii) section 33, and (iv) sections 35 and 36.

 

A number of significant changes in relation to Legal Costs and the adjudication thereof will be implemented.

The Taxiing Masters office will be renamed the “Office of the Legal Costs Adjudicator”

 

There will be a Establishment of “Legal Services Regulatory Authority” that will consist of 11 members from various state and non-state agencies such as the Citizens Information Board, Institute of Legal Costs Accountants, Honorable Society of King’s Inns and Law Society etc. The main functions of the Legal Services Regulatory Authority are set out in Section 13 of the Act.

 

It would appear on the face of the Act that a number of additional powers have been extended to the office of the Legal Costs Adjudicator under Section 151.

 

• A Legal Costs Adjudicator may invite the parties to an adjudication to refer their dispute to mediation or another informal resolution process if he or she considers that to do so would be appropriate in all the circumstances, whether or not any of the parties have requested that the Legal Costs Adjudicator do so.

 

It is not clear from the Act what forum the meditation process will consist off or whom it will be carried out by? Save to say that in time Legal Services Regulatory Authority may issue guide lines in due course or indeed the office of the of the Legal Costs Adjudicator.

 

Powers of Legal Costs Adjudicator

S.156.

 

Another notable change is that, if the Adjudicator with the consent of the parties can conduct adjudication without an oral hearing.  

 

• The Legal Costs Adjudicator may, with the consent of the parties, conduct an adjudication without an oral hearing where he or she is of the opinion that it is expedient and in the interests of justice to do so.

 

15 Percent Rule

 

One of the main changes in the new Act is contained in Section 158 (2) & (3) wherein the act replaces the One-Sixth Rule and is replaced by what will be known as the 15% Rule.

 

What this means is that is that if a legal practitioners bill of costs on a Solicitor Client basis is reduced by more than 15% then the legal practitioner will have to bear the costs of the costs of the adjudication. Currently the cost of Taxation is 8% of the total amount that the Taxing Master deems appropriate on foot of the bill of costs presented and taxed.

In reality this equates to 15% rather than the old system of 16.66% a reduction of 1.66%

 

Example:

 

A Bill under the old rule taxed at €21,400.00 and allowing for reduction of 16.66% = €3,565.26

A Bill under the new 15 percent Rule tax at 21,400.00 and allowing for the 15% =   €3,210.00

As you can see that €355.24 is the difference in the new rule on a bill of €21,400.00

 

Reference to High Court

 

Another notable change is that of a reference to the High Court as contained in Section 151 (1) A Legal Costs Adjudicator may, whether or not at the request of a party to an application for adjudication of legal costs, refer a question of law arising in the application to the High Court for the opinion of that Court.

 

LEGAL COSTS IN CIVIL PROCEEDINGS

Costs to Follow Event

 

The power to award legal costs is contained in Section 168 (1) and Section 169 has put the term “Costs to follow event” on a statutory footing in primary legislation as it was previously contained in Order 99 Rule 5 of the Superior Courts 1986 it would appear that a number of additions have been made to the previous rule Order 99 when the Court is considering making an Order for Costs. See subsection below:

 

(a) Conduct before and during the proceedings,

(b) Whether it was reasonable for a party to raise, pursue or contest one or more issues in the proceedings,

(c) The manner in which the parties conducted all or any part of their cases,

(d) Whether a successful party exaggerated his or her claim,

(e) Whether a party made a payment into court and the date of that payment,

(f) Whether a party made an offer to settle the matter the subject of the proceedings, and if so, the date, terms and cumstances of that offer, and

(g) where the parties were invited by the court to settle the claim (whether by mediation or otherwise) and the court considers that one or more than one of the parties was or were unreasonable in refusing to engage in the settlement discussions or in mediation.