- Court of Appeal stops the gallop of exaggerated claimants to higher courts
- Laws to ensure ‘equality of arms’ before the courts must be enforced by judges
- Sanctions against lawyers taking false, vexatious or exaggerated claims are urgently needed
- The Justice Minister should consider legislation similar to the Lawsuit Abuse Reduction Act in the USA.
ISME, the Irish SME Association has today (12th February) observed that readers of the Law Society ‘Gazette’ have been served some unappetising food for thought in the latest (Jan-Feb) edition. A recent judgment by Mr Justice Michael Peart in the Court of Appeal is causing some discomfort among lawyers because the learned judge has had the temerity to enforce the law of the land against plaintiffs in two recent personal injuries cases.
Speaking about this issue ISME CEO stated:
“In both cases, the plaintiffs had taken their actions in the High Court, despite being warned (in writing) by the defendants (who did not contest the claims) that the cases should be taken in the Circuit Court, as the awards were unlikely to exceed €60,000.
In both cases, the plaintiffs were made awards in the High Court that were substantially below the Circuit Court ceiling.
In both cases, the defendants applied for a ‘differential costs order’ which would mitigate the costs incurred by them in being unjustifiably hauled before in the wrong court.
In both cases, the learned High Court justices (politely not named by the Court of Appeal) declined to grant the orders, despite their being warranted under the Courts Act 1981-1991.
In both cases, the defendants appealed to the Court of Appeal, which ruled in their favour in July last year.”
The judgment quoted one of the anonymous High Court justices as explaining the refusal to enforce the Courts Act ‘On the basis that the case… could merit a High Court award… it would be very difficult to expect a solicitor… not to opt for the High Court jurisdiction.’
The difficulty with this line of reasoning is, of course, that it could be used to justify taking almost any case from the District or Circuit Courts to a higher court.
ISME CEO Neil McDonnell pointed out:
“Small business owners know full well that the real reason many plaintiffs take cases to the High Court is not in anticipation of a higher award. The costs of mounting a High Court defence are prohibitive. So the threat of the High Court is used to bully defendants, and their insurers, into settlement at an early stage, even if they feel it is not justified.
Since costs are rarely recovered from losing plaintiffs, defendants, especially insured motorists and businesses, are faced with a ‘heads you win, tails I lose’ scenario. If they successfully defend a High Court case, they will get an award of costs, but they won’t actually recover them. If they lose a High Court case, they will pay both sets of costs. This is not justice.”
ISME believes this type of injustice is meted out almost daily in Irish courts to insured defendants. The unspoken rule in our legal system is that all the lawyers should get paid, irrespective of the merits of the case they present. Unfortunately, a minority of the judges of our superior courts abide by this unspoken rule. As yet, Ireland does not have any laws to sanction lawyers taking fraudulent, vexatious or exaggerated claims, as they do in the United States under the Lawsuit Abuse Reduction Act
ISME believes the current situation has to change, and we will continue to lobby on this issue.
Mr Justice Peart and his Court of Appeal colleagues are to be commended for their courage and decency in striking a small but significant blow in defence of the honest litigant in the Irish courts.
- Mr Justice Peart’s judgement is available here
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