Legal costs in Ireland are high, yet the Minister for Justice could, overnight, activate an existing change to the law which could have a significant impact on such costs.
The legal professions are saddled with most of the blame for the high level of costs, but some of the problem is structural: as a rule of thumb, higher courts involve more work and higher costs. This is particularly the case for cases taken in the High Court. So: why not take a case in a lower court?
Dublin’s Four Courts, nicknamed the Four Goldmines by the Phoenix Magazine, gets its name from the four types of court that historically sit* there. Each court has different jurisdiction: its territory, so to speak. [* TJ McIntyre reminds me that the Four Courts gets its name, of course, from the courts that used to sit there (Chancery, King's Bench, Exchequer and Commons Pleas) rather than the current varities]. The four courts of the Irish justice system are:
- The District Court is the lowest court, with jurisdiction to deal with relatively minor, non-jury, criminal trials and civil cases up to a value of €6,349. There are 23 districts in the State (West Limerick is in District 13). The Small Claims Court is part of the District Court.
- The Circuit Court deals with appeals from the District Court, more serious criminal cases and civil cases up to a value of €38,092. There are eight circuits in the State (Limerick is in the South Western Circuit).
- The High Court is one of the two constitutional courts (see article 34 here) and has jurisdiction to hear all civil cases of whatever value. The Central Criminal Court is, in fact, the High Court when hearing criminal cases and it deals with the most serious criminal offences (there are a number of other special purpose courts). It may sit as a divisional court with three judges, as it recently did in Dellway Investment Limited & Ors v. NAMA & Ors (a.k.a. McKillen v. NAMA).
- The Supreme Court is the second constitutional court and is the court of final appeal. Cases generally cannot be started in the Supreme Court and can arrive there only on appeal.
Anyone who has been involved in High Court litigation will know that it is generally an intensive and expensive undertaking. Yet, if you have a civil case seeking damages over €38,092, you have no option but to start your case there (except in the rare circumstances where both sides agree to the case being heard in the District Court with unlimited jurisdiction). The hierarchy of courts involves a hierarchy of fees, and some parties may find that their potential claim falls into the jurisdiction of the Circuit Court which may carry a risk of unsustainable fees. It is not uncommon to find claims of €10,000 or more taken in the District Court in the knowledge that only €6,349 can be recovered.
Given the very low thresholds at which cases must be initiated in the Circuit and High Courts, why not just increase the jurisdiction of the District and Circuit Courts? In fact, the Government did this in the Courts and Court Officers Act 2002, 8 years ago. Unfortunately, it is not unknown for recent governments to enact legislation but never commence it (meaning it is not operative) and sections 13 and 14 of the 2002 Act are a case in point. They provide that:
- The jurisdiction of the District Court be increased to €20,000.
- The jurisdiction of the Circuit Court be increased to €100,000.
Why have these provisions been left to wither on the vine? According to Murdoch’s Dictionary of Irish Law:
As of 1st September 2004, the Minister had decided to await the experience of the recently established Personal Injuries Assessment Board and to assess the proposed increase in the light of that experience. The final report of the Motor Insurance Advisory Board recommended that the current limit not be increased, other than to express the figure in a convenient euro amount.
The MIAB’s position is that increasing the jurisdiction of the lower courts leads to inflation of personal injuries awards. Given the existence of the now well-established Injuries Board, however, why should jurisdictional increases be held up because of insurance industry concerns about a single type of case?
Making the change would have inevitable consequences for all three lower courts, and while the High Court might have its workload reduced the Circuit and District Courts would certainly require additional resources. However, it would appear to be a change that is long overdue and, given the IMF’s interest in legal costs (see p.14 of the EU/IMF Programme of Financial Support for Ireland),* one which that organisation could easily direct the Minister to make.
* Eoin O’Dell‘s article in yesterday’s Sunday Business Post outlines reforms of the Irish legal professions proposed some years ago and which are now “required” to be implemented by the IMF/EU programme. If these are implemented in the relatively short timeframe of the programme, they would represent something of a Big Bang for the professions.