So, I submitted freedom of information requests to the Department of Justice and the Department of Finance. To my surprise, the Financial Regulator is not subject to the Freedom of Information Acts 1997 and 2003 (FOIA), so no application could be made to it. The requests sought all records relating to:

1. the difficulties experienced in the market for professional indemnity insurance for solicitors in 2009;
2. the resolution of the Law Society to guarantee repayment of a loan facility to be obtained by the Solicitors Mutual Defence Fund (SMDF) from a commercial lender; and
3. all communications to and from the Law Society, the SMDF and other insurance companies, underwriters and brokers in relation to same.

The Department of Finance had nothing. Some weeks after a decision was due I received 10 documents, all falling with the third category sought (the Department does not hold any records under categories 1 and 2).

The documents primarily consist of briefing notes for internal use within the Department of Justice, most of which reproduce or paraphrase the contents of the first note. They suggest that the Law Society, which sets the rules for the professional indemnity insurance (PII) scheme, operates independently of Government. Changes to the PII regulations do not require the Minister’s agreement but he can direct the Law Society to amend the regulations. For example, one note for the Minister says that although the Council of the Law Society met to consider the issue in August 2009 “we have no information on what transpired.”

The following points are of interest:

• Ken Murphy, Director General of the Law Society, sought a meeting with the Minister for Justice in October 2009. This request is referred to in internal Department communications as relating to a briefing “on the looming ‘crisis’” in the PII scheme. The meeting took place on 15 October 2009.
• The Minister indicated that the then Minister for Enterprise, Trade and Employment should be notified of the situation. A draft letter was prepared, but it is not clear if the letter was sent. The draft letter stated:

In the event that the measures already taken by the Society, and the additional measures planned, do not sufficiently address the concerns of insurers, there may be proposals to suspend or abolish the compulsory nature of the PII scheme for solicitors. I have indicated to the Society that, in the interest of protecting clients, I would not support such a proposal.

• A later briefing note says that solicitors who have difficulty in paying their premium were told by insurance companies that they would “source the money for them (presumably involving a commission).” It also says that solicitors were being told that conveyancing should not make up more than 30% of their practice (hardly an issue for most solicitors at present).
• The last document, from February 2010, states that 18 firms had failed to notify the Law Society of their insurers by 1 February. “This is 0.8% of the 2,249 firms on record and is on a par with previous years.”

The documents are interesting in that they show the extent to which the Law Society runs the show for PII, with the Government taking a detached role. They also show that the Minister is firmly of the view that abolishing compulsory PII is not an option.

However, the most interesting aspect of the documents is the lack of any reference to the Law Society’s provision of a guarantee in favour of the SMDF. Therefore, it remains unknown what the attitude of the Department of Justice and other insurance companies is to that arrangement.

Update

• One of the measures adopted by the Law Society last year was to exclude from PII cover the giving of undertakings by solicitors to financial institutions in commercial property transactions. However, additional top-up insurance could be purchased to cover such transactions. This morning, the Law Society announced the expected ban on giving such undertakings, to come into effect on 1 December 2010 (the first day of the new insurance year).

According to Gerard Doherty, President of the Law Society:

[T]he experience of the Society’s regulatory committees, in particular the Professional Indemnity Insurance Committee, in recent years is that the banks’ ad hoc ‘system’ (with no agreed basis or consistent usage) under which solicitors gave certain types of undertakings in order to complete commercial property transactions exposed the public interest to an unacceptable level of risk. It was essentially flawed and beyond regulatory control with a range of damaging consequences for the public interest, as experience has demonstrated.

The frailties of the commercial undertakings ‘system’, which has been the subject of critical comment by members of the judiciary, has been reviewed by the Society in the light of its capacity to facilitate reckless lending and fraud – with massive losses to lenders as in the Lynn and Byrne cases. The conflict of interest in which solicitors can find themselves, acting for both the borrower and the lender in the same transaction, is at the heart of the problem.

During the boom years solicitors were pressurised, both by borrowers and by lenders, to give letters of undertaking to lenders in commercial property transactions. This frequently led to situations where the undertakings were not complied with and many substantial loans were not properly secured.

An essential part of any banking system is to ensure that proper security is in place where loans, particularly of a substantial nature, are advanced. The risk of failure in this regard is greatly reduced if lenders retain their own solicitors to take responsibility for ensuring the security is put in place.

The law surrounding these defences, as with many aspects of the criminal law, has evolved over time. The nature and scope of these defences have, in the Commission‟s view, been troubled with some inconsistencies, competing rationales and even arguments as to whether they should be abolished in certain instances. In this Report, the Commission proposes to provide a more coherent framework for the future application of the defences.

As indicated by the above statement, there is already plenty of law on the subject but, as it derives from case law it can be unpredictable and often fails the black and white certainty test called for by the media and public on certain occasions.

A reasonable defence against theft of some petrol?

Background

The Law Reform Commission suggested draft legislation to clarify the law on home defence which was not adopted by the Minister (though he might have been expected to). In reality, the new Bill has been generated as a response to the killing of John “Frog” Ward. A background to that case and the resulting prosecutions of Padraig Nally is available on Wikipedia, and the usual health warning applies.

That Mr. Nally was convicted, successfully appealed and was acquitted on re-trial evidences the lack of clarity or consistency in the law. Nevertheless, it is a strange case to act as a catalyst for new laws to strengthen the position of those who use force in self-defence. Mr. Nally was living alone at his home and appears to have been subjected to an indefensible series of incidents which led him to feel threatened in his home, but the case was not the stereotypical home defence case. It should be remembered that that:

• Mr. Nally did not encounter the trespasser at close quarters within the home, rather he saw a trespasser exiting his home;
• the incident took place at around 2 pm., in daylight;
• Mr. Nally went to an outhouse where he had stored his gun;
• he shot the trespasser, later reloaded his gun and fired another shot at the trespasser, who was now fleeing the scene; and
• he beat him a significant number of times with a stick.

Other proposals to change the law on home defence

In response to the Nally cases, Fine Gael presented two private members’ bills on this issue in the Oireachtas, both with similar content, in 2006 and 2009. Both provided that, where a trespasser is unlawfully present in a dwelling “and remains within the dwelling”, resulting in the use of force by the occupier, that force is presumed to be reasonable unless the contrary is proven. However, nothing in either bill would have provided a defence to a charge of murder.

In addition to addressing criminal liability, both bills provided that no liability in tort would accrue to the occupier “in respect of any harm, whether serious or not, caused by his or her actions in relation to a trespasser” unless the force used is found to be unreasonable.

The Law Reform Commission’s draft bill provided, in relation to dwellings, that a person could use force (including lethal force) in the dwelling or the vicinity of it by way of defence to the threat or use of unlawful force by another person. This would only apply in the case of a threat of death or serious injury, rape or aggravated sexual assault, false imprisonment by force, unlawful entry to or occupation of the dwelling and damage to or destruction of the dwelling.

The Government’s Bill

The Minister’s Bill provides that it will not be an offence to use force within a dwelling against another person or their property where

• (s)he believes the other person has entered or is entering the dwelling as a trespasser for the purpose of committing a criminal act; and
• the force used is only such as is reasonable in the circumstances as he or she believes them to be (i) to protect from injury, assault, detention or death caused by a criminal act; (ii) to protect property from appropriation, destruction or damage caused by a criminal act, or (iii) to prevent the commission of a crime or to effect or assist in effecting, a lawful arrest.

The substance of the Bill provides much scope for debate, not least because the Fine Gael proposal did not provide a defence for a murder charge: the Minister’s Bill does. The criteria for reasonableness are in need of greater scrutiny but the provision on civil liability raises new questions.

Section 5 of the Bill provides that a person who uses force as permitted by the Bill shall not be liable in tort “in respect of any injury, loss or damage arising from the use of such force.” Such a provision could block claims like those taken by Mr. Ward’s widow against Mr. Nally. It will be interesting to see how this provision will work. The criminal justice system requires proof of guilt beyond reasonable doubt; the civil requirement is a lesser threshold of satisfying the balance of probabilities. If the user of force is acquitted on the basis of a section 2 defence, does that determine the matter for a judge hearing the civil trial? Or will the judge hearing the civil trial have to consider the issue, for example where no prosecution is brought against the user of force? If that judge determines that the force used was not permissible, will a prosecution result? It would certainly seem that cases of this sort should be excluded from the operation of the Injuries Board, which will hardly be in a position to determine the issue, but the Bill is silent on this.

Fine Gael’s 2009 Bill referred to harm caused “in relation to a trespasser”; an imprecise  phrase but one assumes that it absolves the user of force from civil liability to the trespasser. The Minister’s 2010 Bill is not so limited, allowing for the potential that a lawful resident, guest or neighbour who might be injured as a result of the force directed at the trespasser will be barred from taking action against the user of force. Alternatively, a guest in the home could use lawful force against a trespasser but injure the home owner. Section 5 appears to absolve that guest from all civil liability.

Does this Bill clarify the law?

The first draft of this Bill is likely to be a source of further confusion and ambiguity. It certainly does not tie up loose ends. While it is presented as legislation that “clarifies” the law, it is more accurate to say that it merely updates or amends the law. Sections 2(3) and (4), along with other aspects of the Bill, arguably do not advance the clarity of the  law on this topic. Despite frequent complaints from the public (and lawyers) that legislation is difficult to understand, those subsections are barely comprehensible. It is baffling that a simpler way could not be found to express some aspects of this Bill.

However, given that it resembles the Fine Gael bills at the high level, it could attract a good deal of cross-party support and pass through the Oireacthas without detailed scrutiny of its wording. This happened recently with the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, Part 15 of which did not receive significant textual scrutiny despite criticisms from leading academics that the provisions on cohabitants’ rights were poorly drafted, contained anomalies and could do more harm than good.

Updates

• Sinéad Ring discusses the Bill on the Human Rights in Ireland blog.
• Vincent Browne says that the Bill “serves only nasty political ends”. As noted by the Law Reform Commission and others, reform of the law was necessary but the Bill does not resolve the issues and it is hard to disagree with Browne’s political assessment of the legislation:

Now a Bill has been introduced whose only purpose seems to be to respond to that vibe of five years ago, thereby neutralising any opportunist point-scoring in that arena by Fine Gael, while, incidentally, reminding Fianna Fáil TDs that there is a strong man around, should they be looking for same between now and the election.

I’ve written before about Part 15 of the Bill, which deals with cohabitants. This has received less attention, understandably, than the civil partnership elements of the law but Part 15 applies to all relationships, whether homosexual or heterosexual in nature. Amendments have been made to Part 15 so that cohabitants will have to live together for 5 years before their rights arise (2 years if dependent children are involved) rather than the original 3 year qualification period proposed in the first draft of the Bill.

Professor John Mee has made a detailed critique of the legislation, primarily pointing out drafting errors and ambiguities in the Bill. He also made general observations that Part 15 might do more harm than good. These points do not appear to have been addressed. Nor does the Minister appear to have amended the title to highlight the cohabitant elements, as was expected. Update: via Maman Poulet I learn that this has now happened and the legislation bears this tongue-twister of a name: the Civil Partnership and Certain Rights and Obligations of Cohabitants Bill 2009.

Incidentally, there have been some suggestions (mostly from the odd Fianna Fáil backbencher) that the legislation is a Green Party measure, though Fianna Fáil’s manifesto for the 2007 general election (which predated coalition talks with the Green Party) contained a commitment to introduce the legislation.

ON OCCASION, popular policies are simply wrong. The practice of locking people up for relatively minor offences has been hugely expensive and largely counter-productive.

This is certainly true in the case of minor offences and non-payment of fines.

The Fines Act 2010 has been signed into law by the President but will not be commenced by the Minister for Justice and Law Reform until the Courts Service is ready to facilitate implementation. The most high-profile aspect of the Act is to provide alternatives to imprisonment for non-payment of fines, but it also increases the maximum fines that can be imposed for many offences.

Alternatives to jail

It may seem bizarre to jail someone for not paying for their TV licence, although imprisonment for non-payment of fines is somewhat more complicated than that. In reality, the jail term is imposed for ignoring a court order (to pay the fine), rather than for the original offence.

Though they were not specifically required to do so in the past, District Court judges generally inquire into the financial position of a defendant before setting the level of fine and the time in which it may be paid. Someone on a low-income with a number of dependents might be given a small fine and a period of months in which to pay it. When setting the penalty, the judge sets a number of days ‘in default’: this is the period of imprisonment that will result for non-payment.

The Fines Act includes a statutory requirement to enquire into the means of a defendant and, importantly, provides for payments by instalment and alternatives to imprisonment for non-payment. This area of the law has been the subject of extensive research, including the Nexus report and the Law Reform Commission’s report on penalties for minor convictions. The main points of the new system are:

• When convicted, the judge must take into account the defendant’s financial circumstances before setting a fine. This is known as equality of impact: the impact of a fine should not be made more or less severe as a result of the defendant’s financial circumstances.
• If a requirement to pay the full fine by a particular date would cause financial hardship, the judge can order that it be paid in instalments. However, the full amount will generally have to be paid within 12 months.
• If a fine remains unpaid, a receiver can be appointed to recover the fine by seizing and selling the defendant’s property. A judge can also order that a fine be recovered as if it were a civil debt.
• A judge will now be able to order community service instead of imprisonment for non-payment. Previously, community service could only be ordered as an alternative to a prison sentence (ie. not in place of a fine).

[Update] It has been reported that the average cost of keeping inmates in prison has fallen to €77,222, a drop of 17%. However, that still works out at €212 per day in prison. Take again the example of the individual who fails to pay for their TV licence: the State loses €160 in revenue for the licence. It must then bear the cost of prosecution, which could reach a few thousand euros. Say the defendant is punished at the extreme end of the scale, receives the maximum fine of €1,000 and is jailed for 10 days for non-payment.

Not including the cost of prosecution, the State is at a loss of €3,280. With the cost of prosecution included, the full cost will be around €5,000. In 2009, 60 people were jailed for this offence and 3,500 were jailed in total for non-payment of fines. Obviously, there is a financial incentive for using the alternative provisions of the Fines Act in future.

Penalty fines

The Act also contains a more straightforward system for setting the maximum fines for offences. From now on, all new legislation  covering minor offences (ie. on summary conviction) must categorise the fine in accordance with the Act. Until now, each individual penalty fine has been set in the relevant legislation as a punt or euro amount and, if the level of the fine was to be changed, it had to be done individually for each specific offence.

The Fines Act sets out a new system of categorised fine for minor offences:

• Class A: maximum fine of €5,000
• Class B: maximum fine of €4,000
• Class C: maximum fine of €2,500
• Class D: maximum fine of €1,000
• Class E: maximum fine of €500

Existing offences are retrospectively classified. This could lead to significant increases in maximum fines for old offences that have not been amended in recent decades. Fines for more serious offences will also be increased by a multiplier: for example, a fine for a serious offence set between 1965 & 1975 will be multiplied by 10.

Here are two examples, albeit by reference to relatively obscure offences:

• The offence of indecent exposure carries a maximum fine of £500 (€634.87). Under the Fines Act, that will become €1,000.
• It is an offence to make a false statement when applying for a lottery licence or permit, punishable by a fine of up to £100 (€127). Under the Fines Act, the maximum penalty will be €2,500.

These examples illustrate that the increase might be of a few hundred euro, or a few thousand. If there is a Class A offence out there that has not been updated since 1914, the maximum penalty could go from around €100 to €5,000.  The explanatory memorandum (from when the Act was at bill stage) says that the increases

will not represent a real increase in the amount of the fine, it will simply maintain its value and ensure that the intentions of the Oireachtas when passing the legislation are respected.

The latter part of that sentence may be true but the increase will be very real for someone convicted under an old piece of legislation.

Nevertheless, the new system of fines is practical as the classes of offences can be changed without the necessity of amending every piece of legislation on the books. In addition, lawyers and judges can now refer to penalties by class, rather than having to remember or keep note of a wide variety of maximum penalty for different offences.

I have written before about the different legal structures under which a business may be run. The only reference to trade mark law in that post was to point out that a registered business name is not, of itself, a trade mark.

The Trade Marks Act 1996 defines a trade mark as “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings.” This is an example of legalese.

The Patents Office, which handles the registration of marks, offers a more helpful definition:

A trade mark is the means by which a business identifies its goods or services and distinguishes them from the goods and services supplied by other businesses.

You might identify your business using a company or registered business name and therefore use it as a trade mark. However, it is not a registered trade mark. A registered trade mark provides a monopoly on the use of trade mark: it stops others from using it. Of course, there are limitations to that monopoly and not all marks can be registered. See here for a good FAQ on registered trade marks.

Whatever about the detail of trade mark law, the ™ and ® symbols are familiar to us all. But what do they mean?

• Using the ™ symbol indicates that you are using a name or logo as a trade mark. It does not offer specific protection. However, you might take an action for passing off (which is like suing on the basis of an unregistered trade mark) and will obviously require evidence of using the mark as a trade mark. Use accompanied by the ™ sign may assist.
• Using the ® symbol indicates that the name or logo is registered as a trade mark.

The difference is not merely technical. Section 94 of the Trade Marks Act 1996 provides that it is an offence to falsely represent that a mark is registered. The fine was originally a maximum of £1,000 with a further fine of up to £100 per day for a continuing offence.

The recent Fines Act 2010, which has been signed into law by the President but has not yet been commenced by the Minister for Justice and Law Reform, will increase these fines. If my reading of the Act is correct, a section 94 offence will become a Class C offence and therefore carry a maximum fine of €2,500, with the daily fine for continuing offences becoming a Class E offence with a fine of up to €500 per day.

I mentioned last month that this “three strikes” system agreed between IRMA and eircom was approved by the High Court (for data protection purposes) on the basis that IRMA would not know “that the infringer is a particular person living in a particular place in Ireland”. In fact, Charleton J. said that all IRMA will “know is that a particular IP address has been involved in the downloading.” However, it appears that DtecNet, who will collect IP addresses for IRMA, has the capability to collect more information than just IP addresses. Whether such capabilites are to be used as part of the IRMA/eircom system is not known.

My suspicions were raised by eircom’s statement on their website that IRMA will send notifications to eircom “containing among other things the IP addresses of individuals”. Such suspicions could be unfounded; for example, IRMA might be sending eircom a list of shared files along with the IP addresses and that information might not be personal data.

However, the template letter reproduced by Adrian says:

Some of the details of the notification supplied by IRMA are set out below …

Is it not strange that eircom repeatedly notes that IRMA will be supplying them with more details than are apparently necessary for the purposes of the three strikes system.

What are those details?

In the past, trade mark and passing off actions have been used to stop comparative advertising, but this had the unsatisfactory result of often blocking any form of comparative advertising, rather than just unfair comparative advertising. Most businesses are still very cautious when it comes to comparative advertising, but the trade mark problem was resolved somewhat by the ECJ decision in the O2 bubbles case: a competitor can use another’s trade mark once it does not confuse the public.

The European Communities (Misleading and Comparative Marketing Communications) Regulations 2007 updated Irish advertising law and supplement the unfair marketing provisions in the Consumer Protection Act 2007 and the non-statutory ASAI Code. A summary of the Regulations and available remedies is available here. The Regulations are not widely known among Irish SMEs, but that is changing fast.

Last year, Tesco sought an injunction under the Regulations against Dunnes Stores. The Irish Times reported:

Tesco had sought to stop Dunnes from running allegedly misleading price comparison advertisements in the run-up to the lucrative Christmas shopping spree. Tesco claimed Dunnes promotional advertisements made direct and unexplained comparisons with Tesco’s standard prices and misled customers by failing to compare like with like. Dunnes argued that its advertising campaign, in which it highlighted its lower prices, was incapable of misleading consumers.

Tesco failed to get an injunction because the High Court cannot grant a temporary injunction in this type of case (ironically, this is due to an earlier Supreme Court judgement in a case taken by Dunnes Stores). Miss Justice Laffoy’s decision does not mean that Tesco has lost or that Dunnes’ ads were not misleading: it only means that Tesco must pursue their complaint to trial of the full action.

Remedies under the Regulations can also be sought in the Circuit Court, where costs are lower. Recently, the Cork News took a case against rival paper the Cork Independent under the Regulations. As reported by the Phoenix (28(11) p.7 (11/06/10)):

THE freesheet Cork Independent was forced to admit in the Cork Circuit Court recently that it had been boasting false circulation figures to advertisers and was ordered by Judge Con Murphy to publish corrective figures. … The Cork Indo had been boasting circulation increases of 10,000 up to 65,000 in a series of full page adverts for the best part of two months up to January last. But the Cork News argued that the Cork Indo’s actual print run was only 43,000 for certain parts of the same period.

Judge Murphy ordered the Cork Indo to inform its advertisers via the newspaper of its real circulation figures last November and also ordered both papers to publish its current circulation figures.

Tesco v. Dunnes Stores was an intensification of an existing battle between two enormous companies, but the Cork newspapers case suggests smaller Irish companies are now paying more attention to the legislative rules applicable to advertising, especially when it comes to advertising by competitors.

[Incidentally, an advertisement published by a solicitor can neither reflect unfavourably on other solicitors nor suggest specialist knowledge superior to other solicitors, which removes any real possibility of comparative advertising.]

As the name suggests, interviews are conducted on Twitter, with 22 questions and answers. I was delighted to be the first Irish lawyer twitterviewed by Lance – read the interview in sequence here.

That January post also mentioned massive losses suffered by the Society in a disastrous invesment of its own and the summary of the 2009 statements distributed to solicitors inlcludes the following disclosure:

[The Society's after tax surplus for 2009] includes an exceptional loss of €480k, representing a further write down of the value of the Benburb Street site in 2009. The write down required by our auditors in 2008 was €14.7m.

In 2006 the Society appears to have been gripped by the property mania affecting the nation and this property was bought for unspecified and unexplored development purposes, at a cost of €22.4m. In 2009 it was revalued at around €7.7m and the 2010 write down brings it to €7.22m.


View Larger Map

The then-President of the Law Society said at the time of the purchase:

I believe that the great majority of solicitors today, and in the future, will view the purchase of this Benburb Street site, like the purchase of Blackhall Place, as a wise and practical decision made in the long-term interests of the profession.

In 2010, the Society says of the €15.2 million lost:

These write downs must be put in the context of the Society never planning to sell the site. Importantly, the site is free of debt.

I don’t know which one of those sentences is worse.

Strike 1 to the record industry

eircom has now implemented the graduated response system on a pilot basis and details are available on its website. The FAQs say that IRMA will supply eircom with IP addresses which eircom will match to its customers, who will then receive warnings about alleged unlawful downloading. If warnings are ignored, service may be suspended for 7 days and the customer will not be charged for those 7 days of lost service. On a subsequent alleged infringement, service will be withdrawn for 12 months. If a customer disputes an allegation that their service has been used for unlawful downloading, they can appeal to the eircom, who “will consider all customer appeals on a case by case basis.”

The concerns about graduated response primarily arise out of disconnection on the basis of complaint, rather than court order, and that the sanction affects an entire household, rather than the individual alleged infringer. The latter point has gathered steam as the internet has taken on utility status. IRMA’s attitude to this is clear:

The European Parliament has been talking about internet access as a basic human right. It absolutely is not.

Dick Doyle, IRMA Director General

eircom emphasises that customer data will not be shared by eircom with any other party.

Under no circumstances will eircom be handing over customer details to any third party.

It is also stated that eircom won’t monitor network usage and that “[t]here are strict privacy laws that prohibit eircom from monitoring the online activities of individual customers.” Monitoring will be done by DtecNet on behalf of IRMA.

However, in the overview, eircom states:

IRMA will send eircom notifications containing among other things the IP addresses of individuals they have detected as engaging in illegal file sharing in breach of copyright.

One wonders what those “other things” might be. Charleton J. said:

Neither DtecNet, or any similar service of detection, nor any of the plaintiffs whose copyright material is being infringed would ever know through this process that the infringer is a particular person living in a particular place in Ireland. What they do know is that a particular IP address has been involved in the downloading.

However, DtecNet’s website states:

DtecNet’s solutions will automatically secure evidence against the infringer(s) and generate Cease & Desist letters that can be sent to the infringer(s) asking for immediate removal of the content.

This is a capability of their systems, not a detail of the IRMA/eircom agreement. But nevertheless, it appears that IRMA may be capable of gathering more than just IP addresses of alleged infringers. eircom might not share customer data with any other party, but it is not clear what data will be shared with it.