Legal Costs/Mediation
May 2022 Caroline Fanning is an Associate Member of the Institute of Legal Costs Accountants and offers this service to clients both from a mediation perspective and drawing up bills of costs for parties.
Section 150 of the Legal Services Regulation Act 2015 (LRSA) came into force on 07/10/2019 ( dealing with legal practitioners i.e. solicitors and barristers legal costs ) replacing the previous legal costs regime under Section 68 of the Solicitors (Amendment) Act 1994 and aims to enhance transparency.
Caroline Fanning succeeded with the assistance of the impeccable advices and assistance of Connolly Lowes Legal Costs Accountants in an EU consumer package holiday case in securing a reduction of some €14,500.00 (€26,896.00 to €12,500 approx) on a PARTY PARTY BILL OF COSTS, OUTLAYS AND DISBURSEMENTS from Noble Shipping Law solicitors Arklow for travel agent and cruiseline served on an EU consumer on foot of a High Court of Ireland Costs Order made on 8th day of September 2020 and amended some 4 and a half months later by the same High Court Judge who had made the initial Order on the grounds that the initial Costs Order has been made on inaccurate submissions to the Court.
Trailfinders Ireland Limited/Royal Caribbean Cruises on the EU consumer had sought some €26,896 from an EU consumer plaintiff for a DISCONTINUED interlocutory application never given a hearing date and never listed for hearing but adjourned generally due to COVID and but for unilateral activities of Trailfinders Ireland Limited/Royal Caribbean Cruises would never have occupied one minute of Court time prior to its discontinuance. When the High Court ruled on 18/01/2021 it had been given “untrue..incorrect” submissions and never made aware of email dated 22/7/2020 from plaintiff to NSL and High Court registrar it stopped the costs at the date of the email being 22/07/2020 as per statutory legislative regime for discontinuance Trailfinders Ireland Limited/Royal Caribbean Cruises reduced their Party Party Bill of Costs from €26,896 to €18,140 and accepted €12500.00 through negotiations (€14,396 reduction from first bill).
Royal Caribbean Cruises/Trailfinders Ireland Limited despite being put on notice by the plaintiff in writing on 17/06/2020 “This motion is adjourned generally now as the Courts cannot cater currently for oral testimony.” by email turned up in the High Court of Ireland on 29/06/2020 knowing the Plaintiff would not be there in the Court and proceeded to ask the High Court of Ireland to put the adjourned plaintiffs’ motion before their nominated Judge.
Royal Caribbean Cruises/Trailfinders Ireland Limited had previously emailed directly this nominated High Court of Ireland Judge on 25/05/2020 asking him to hear the plaintiffs’ filed motion as follows “We accordingly should be grateful for the Judge’s indication as to whether he will hear this motion” using the email address of his Judicial Assistant (which the Courts Service stated in an email on 26/05/2020 “Judges do not enter into correspondence regarding matters before the Court. I consider correspondence with a Judges Judicial Assistance as correspondence with their Judge and should not happen.”)
Mr. Justice Charles Meenan acceded to this request on 29/06/2020 by Trailfinders Ireland Limited/Royal Caribbean Cruises in the absence of the plaintiff and transferred the plaintiffs’ adjourned motion to the nominated Judge of Trailfinders Ireland Limited/Royal Caribbean Cruises whom they had previously emailed on 25/05/2020.
Trailfinders Ireland Limited/Royal Caribbean Cruises knew the plaintiff had objected on 26/05/2020 to their nominated Judge hearing the plaintiffs’ motion for reasons specified in correspondence to Trailfinders Ireland Limited/Royal Caribbean Cruises .
In amending its own Costs Order the main issue revolved around the fact the notice of discontinuance served by the EU consumer on 22/7/2020 was never brought to the attention of the High Court of Ireland despite the legal team for Trailfinders Ireland Limited/Royal Caribbean Cruises and Registrar of the High Court of Ireland having acknowledged receipt of it on 22/07/2020.
S169(4) of the Legal Services Regulation Act 2015 states
“Unless the court before which civil proceedings were commenced orders otherwise, or the parties to those proceedings agree otherwise, a party who discontinues or abandons the proceedings after they are commenced (including discontinuance or abandonment of an appeal) is liable to pay the reasonable costs of every other party who has incurred costs in the defence of the civil proceedings concerned until the discontinuance or abandonment.”
IN ruling as follows
IT IS ORDERED that the said Order made by this Honourable Court on the 8th day of September 2020 be amended by deleting the costs paragraph
“IT IS ORDERED that the Plaintiff do pay to the Defendant the costs of this Motion and Order such costs to be adjudicated in default of agreement between the parties”
and replacing it with the following paragraphs
“IT IS ORDERED that the Plaintiff do pay to the Defendant the costs of re-entering the Plaintiffs (withdrawn) contempt Motion to amend (and/or set aside) the said Order made on the 8th day of September 2020 up to and including the 22nd day of July 2020 (the date of withdrawal of said Motion by the Plaintiff by way of email to the High Court Registrar) such costs to be adjudicated in default of agreement between the parties
the High Court of Ireland Mr Justice Bernard Barton now retired stated as follows:
“Even though it’s a final order to deal with a mistake or omission or to deal with an error where the judgment does not reflect properly the intention of the court.
now as I say it is absolutely clear and in fact the DAR confirms to me what in fact was my recollection when we were discussing this in court which is that I had understood that the withdrawal of the motion had been pretty well imminent that is to say up to the time literally before the hearing before the court.
correspondence was not these emails which have now been opened to the court as a ground as evidence for reviewing the court order disclose that in fact this motion was that not only did the plaintiff withdraw this motion by correspondence email to the defendant solicitor but also did it formally in the sense of notifying the registrar that this is what she wanted to do.
my intention was to give costs up to the time that the matter was withdrawn.
now as I say I understood from what was said to me and I have listened to this carefully and from the submissions that were made that the withdrawal had taken place essentially within 24 hours or either that morning or the previous afternoon.
I knew nothing about the email of the previous July.
nobody brought that to my attention.
the law that I have been referred to is absolutely unquestioning I am conscious of it I have applied it myself in other cases the court may not intervene in an order in a final order save in exceptional circumstances and it certainly may not do so on the caprice of the judge hearing the matter.
this particularly under the rule the jurisdiction of the court to intervene is limited and the boundaries of those limits have been set out in a number of cases but one of course is to correct what in fact if the order does not reflect the intention of the court the full intention of the court then the court is entitled to correct that eh to correct the order so that the order reflects what the court intended and my intention as I said myself one of the grounds for actually allowing the costs for making the order for costs and this seems to me is fundamental and one of the grounds or one of the reasons I gave that I gave the principal reason that I gave was on this application the one reason which counts and which is clear in my judgment for actually refusing the application from the plaintiff to stay or reserve the question of costs was the fact that it was just withdrawn instantly like right now just before motion came on before the court and that transpires not to be the case
now the jurisdiction may be exercised in other words it may be exercised in my view to prevent injustice between the parties in other words if it is brought to the courts attention that there was a critical error in the order and that that would do an injustice between the people between the parties well then the court was jurisdiction to intervene to correct that and the justice of the matter is that costs were undoubtedly incurred by the defendant up to and including the moment that the plaintiff decided to withdraw it and the withdrawal it seems was prompted as a result of remarks that I had actually made to the plaintiff I think within a couple of days before she decided to withdraw it I actually said a couple of things to her I don’t want to go repeating this now but it appears she acted on that she wasn’t there in court she was represented by counsel her solicitor wasn’t there either possibly that the motion had been withdrawn at such an early stage simply was not brought to my attention and I proceeded on a premise which it actually transpires is actually untrue but not untrue incorrect and that needs to be rectified so I am going to exercise my jurisdiction and the jurisdiction vested in the court to amend the order to permit the defendant to have its costs on the motion but up until the date on which it was withdrawn by email not to the defendant but to the registrar
that is the formal notification which I think in fairness is within 24 hours or even the same day.
so, as I say the defendant had undoubtedly occurred costs by up to and including that time and the jurisdiction which I have to speak to my own order does not otherwise allow me to vary my own order and the order will otherwise remain as perfected.
so, the adjudication can take place but order will recite fact and adjudicator can be so advised.
There were people in the court that knew the truth but said nothing.”
High Court of Ireland in Teva (Canada) Ltd v Panalpina World Transport (Ireland) Ltd (Approved) [2021] IEHC 304 (30 April 2021) stated senior counsels have a particular obligation to the court to ensure that the material placed before the court is clear and accurate and that counsel are properly briefed.
Simpson v Governor of Mountjoy Prison & Ors (Approved) [2020] IESC 52 (31 July 2020)
para 40 In Shelley-Morris, there had been a mixed outcome. The defendant was successful in varying the High Court order, but the plaintiff retained the award for general damages. The Court, therefore, made no order for costs in the appeal, but, significantly, held that the conduct of a plaintiff was an important factor for the Court to consider in the exercise of its discretion as to costs (pp. 266 – 267).
41. By contrast, in Grimes v. Punchestown Developments Company Limited [2002] 4 IR 515, Denham J., speaking for this Court (Denham, Hardiman and McCracken JJ.) held that costs need not necessarily follow the event (pp. 523–524). She cited with approval dicta of Hamilton C.J. in T.F. v. Ireland (cited at para. 33 above) where, in a test case involving issues of importance to parties in some 3,060 cases in which issues had been made under the Judicial Separation and Family Law Reform Act, 1985, the Court awarded the costs of the appeal to the plaintiff. The outcome of Mahon v. Keena (cited at para. 33 above) shows the very broad scope of the distinction where, even though the defendants succeeded, the Court awarded costs against them.
46. Clearly, if other cases of this type proceed in a court setting, in whatever jurisdiction, it will be necessary to engage in rigorous case management. Courts will require the parties to define at an early stage what exactly is alleged and the nature of a defendant’s defence. Parties will be made aware that such decisions may have consequences in costs – on either side. Both plaintiffs and defendants have procedural rights. Defendants have the right to make a lodgement in court, or an offer without prejudice as to costs. But plaintiffs, too, have a right to know what case a defendant will make in court.
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Thomas Cosgrove, Plaintiff v. John Ryan and Electricity Supply Board, Defendants [1999 No.
11074P]; [2008] IESC 2, [S.C. No. 358 of 2003]
Supreme Court 14th February, 2008
p538 Held by the Supreme Court (Denham, Hardiman and Geoghegan JJ.), in allowing the appeal, apportioning liability and remitting the case to the High Court for the assessment of damages, 1, that, in any action for negligence, but particularly one relating to dangerous things, it was not incumbent on a plaintiff to negative every conceivable possibility of absence of negligence provided reasonable proof was put forward.
2. That, although there was no law that required a defendant to give evidence at all, let alone any particular evidence, a plaintiff who put forward a prima facie case that had not been answered was usually entitled to succeed.
EU law requires Proportional Assessment and there is obligation on the courts to protect rights conferred by EU law – €130000+ costs have the appearance of being disproportionate.
In Pepper Finance Corp v Cannon & Anor [2020] IESC 2 (04 February 2020) cited
AIB v. Counihan [2016] IEHC 752 in which Barrett J. had held that a court considering a consumer contract must conduct such an assessment of the fairness of the terms of its own motion in accordance with the European Communities (Unfair Terms in Consumer Regulations) 1995
“78. The line of authorities on the Directive cited by the parties includes Pannon GSM v Gyorfi (C-243/08, EU:C:2009:350), where the CJEU was asked whether the consumer protection provided by the Directive required the national court to carry out a review of the fairness of contractual terms of its own motion, even where they had not been challenged in court by the consumer.
79. The Court commenced its analysis with the statement that the system of protection introduced by the Directive was based on the idea that the consumer was in a weak position vis-à-vis the seller or supplier, in relation to both bargaining power and level of knowledge, and could be led to agree to terms without being able to influence their content. The aim of compensating for that imbalance would not be achieved if it was left to the consumer to raise the unfairness of the terms, and therefore effective protection could only be attained if the national court acknowledged that it had power to evaluate the terms of its own motion and to rule that the consumer was not bound by an unfair term. Consequently, the national court’s role was not limited to a power to rule on the possible unfairness of a term, but also consisted of an obligation to examine the issue if it had available to it the legal and factual elements necessary for that task.”
Proportionality of costs must also be assessed in the context of rights under the EU Charter of Fundamental Rights and the European Convention on Human Rights esp. consumer protection and fair trial rights and a costs bill of some €135,000.00 would act as a barrier to justice and send a chilling effect and make it very difficult for all other potential aggrieved consumers to seek a remedy or vindicate their rights.
The failure of a defendant to engage meaningfully with a plaintiff and a blatant egregious lack of budgetary focus on dealing a case fairly and on the merits could be said to be unfair.
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Serious consideration should be given by a plaintiff who can opt to sue in the UK where their defendant is a UK based company as the legal costs regime in the UK protects an honest losing consumer unlike the Irish legal costs regime which heralds back to the 13th Century legal costs “punitive” genesis.
In the UK Qualified one-way costs shifting was introduced for personal injury claims from 1 April 2013. This means that defendants will generally be ordered to pay the costs of successful claimants but, subject to certain exceptions, will not recover their own costs if they successfully defend the claim.
QOCS does not apply to proceedings where the claimant has the benefit of a CFA or ATE insurance policy which was entered into before 1 April 2013 so that the success fee / premium continue to be recoverable.
Legal costs can depart from normal rule costs follow the event such as Court exercising discretion in “unusual” circumstances involving procedural or substantive unfairness.
In KRA & anor v Minister for Justice & Equality (No. 3) [2016] IEHC 421 (24 June 2016) the High Court of Ireland expressed surprise senior counsel would not concede it was inappropriate to resile from earlier legal representations to the court and refused Leave to appeal against legal costs order (KRA No. 1) in favour of losing applicant party (a Nigerian plaintiff seeking unsuccessfully to be allowed remain in Ireland with her school going children) stating ” 20. More generally, it is more or less unheard-of for a party to disclaim any liability to be bound by its representations to the court, so the conduct which influenced the making of a costs order against the respondent is unlikely to be repeated by other parties. The decision on costs therefore does not significantly transcend the individual case so as to warrant leave to appeal (see Kenny v. An Bord Pleanála (No. 2)[2001] 1 IR 704 (McKechnie J.)). “
“But it is also advocacy at its most practical. Any other course would have been unworkable for the simple reason that the earlier representation had been relied upon.
2. Just how unworkable has been demonstrated in the present case where an alternative approach was taken. When it was drawn to the attention of leading counsel for the respondent that the submissions and objections being made, at a very late stage in the day after the hearing proper had concluded, were radically inconsistent with concessions and submissions made at an earlier point by his junior counsel, the court was metaphorically afforded an insouciant shrug and was simply told that these were good points and would be persisted in – even though the earlier representations had been relied upon by the other participants in the proceedings and the court itself. The fallout from that ill-founded strategy continues in the present application. “
Caroline Fanning solicitor a Mll Approved Mediator and trainee Member of the Institute of Legal Costs Accountants (ILCA) provides parties to a dispute over Legal Costs mediation as a means of attempting to resolve the dispute. Participation in mediation shall be voluntary at all times. The fact that proceedings have been issued in relation to the dispute shall not prevent the parties engaging in mediation at any time prior to the resolution of the dispute.
Currently in Ireland the Legal Costs Adjudicators Office has the statutory remit to resolve disputes relating to Legal Costs.
This amounts to a stressful process for parties facing penalties such as 8% stamp duty and can become a protracted process adding further burdens to a party who has resolved their substantive dispute.
Any party who is dissatisfied with the allowance or disallowance by the Legal Costs Adjudicator of the whole or part of any item (including any special allowance) may, within the time permitted by section 160(1) of the 2015 Act, apply to the Legal Costs Adjudicator by notice in the Form No. 4 in Part V of Appendix W for consideration of the decision or decisions specified in the notice and for a determination under that section. The notice shall list in a concise form the matters or items, or parts thereof, to which the decision of the Legal Costs Adjudicator being objected to relates and the grounds and reasons for such objections. A copy of the notice shall be served on the other party to the adjudication not later than 14 days before the return date assigned for the hearing of the application.
An application to the Court under section 161(1) of the Legal Services Regulation Act 2015 shall be made by motion on notice to the persons specified in section 161(2) of the Legal Services Regulation Act 2015. The notice of motion shall be filed in the Central Office and a copy thereof filed in the Office of the Legal Costs Adjudicators. The motion shall be heard and determined by the Court on the evidence brought in before the Legal Costs Adjudicator, and no further evidence shall be received on the hearing thereof, unless the Court otherwise directs.
ref: S.I. No. 584/2019 – Rules of the Superior Courts (Costs) 2019 (irishstatutebook.ie)
Default two thirds rule where junior counsel would be paid 2/3 of senior counsel fee mow prohibited by s149 Legal Services Regulation Act 2015
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