Are legal cost guidelines on the horizon? Administration of Civil Justice Review wraps up, submits report to Minister

Bloomsbury Professional, 09 November 2020

November 18, 2020

In March 2017, then-Tánaiste and Minister for Justice and Equality, Ms Frances Fitzgerald, established a Review Group to investigate the ways in which the administration of civil justice in Ireland could be reformed. Chaired by the President of the High Court, Mr Justice Peter Kelly, the aims of this Review Group were to help to improve access to the courts by reducing costs, promoting the early resolution of disputes and by creating a more responsive and proportionate system overall.

Key stakeholders from across the legal services industry were represented in the Review Group, including the Courts Service, the Law Society of Ireland, the Bar Council, as well as representatives from several government departments. The Review Group has now completed its work and a report has been handed to Minister Helen McEntee. Totalling some 500 pages, this as-yet unpublished report is said to have recommended reforms in the following areas:

  • Discovery;
  • Judicial review;
  • Costs;
  • Multi-party litigation; and
  • More general court reform.

As per the Law Society Gazette, Review Group member Stuart Gilhooly spoke to the litigation seminar on Thursday 29 October, and reportedly confirmed that the recommendations contained in the report will change the way the profession operates, but in a ‘manageable’ way. Perhaps the most noteworthy of these is the anticipated introduction of new guidelines aimed at controlling legal costs.

According to a report in the Irish Independent, limits will be laid out for what level of fee can be charged for different types of work at various points of a civil case, with claims for costs being overseen by the Office of Legal Costs Adjudicators, who will have authority to overturn excessive claims. Other reforms mentioned include those aimed at streamlining procedures – namely by introducing a new regime for discovery, limiting adjournments and speeding up the overall timeframe for bringing cases to hearing.

If implemented, these recommendations would help to make the costs of going to court more transparent and predictable for private persons and companies alike, a point that is particularly important when considered in light of the World Bank’s ‘Doing Business’ Report 2020, which concluded that Ireland was the fourth most expensive jurisdiction in the EU for the litigation of disputes relating to commercial contracts.

But how would such a system stack up against other jurisdictions? The German regime, known as the Bundesrechtsanwalts-Gebührenordnung (or ‘BRAGO’ for short), introduced strict scales to be used in the calculation of legal fees for both litigated and out-of-court matters. This was rolled back somewhat in 2004 when out-of-court legal fees were liberalised, but the scales remained for litigious matters. These clearly set out what measure of fee can be imposed for different kinds of work and also take into account the value of the case. These scales seem to be quite similar to those which are likely to be recommended here.

It is important to emphasise that all of the initial reports have suggested that the proposed costs guidelines seem to be just that – guidelines of a non-binding nature. It was submitted during the review procedure that mandatory price-setting could fall foul of EU competition law – a cornerstone of which being individuals and organisations setting their own prices, without regard to their competitors. However, this conflict has seemingly not arisen in Germany thus far as the system for capping costs in litigious matters remains in place.

Simply capping costs is not all that could be done to improve access to justice in this jurisdiction. Perhaps Ireland could learn from the example of the United States, where class-action lawsuits allow parties to effectively fuse their cases, helping to spread the costs of litigation evenly amongst themselves. This is particularly useful where there is an imbalance in resources between plaintiffs and a more powerful opponent, say in the context of a consumer rights dispute against a large corporation.

It is unclear as of now when, or indeed if, the full contents of the report will be published. In any event, the recommendations will eventually become clear through the publication of legislation that is introduced to give effect to them. However, not all changes will require primary legislation, as some will simply involve amending court rules, or properly enforcing existing ones. And lastly, the report will not be the only shake-up to the legal services industry in Ireland this year, as the requirement for barristers to wear ceremonial robes and wigs has now also been done away with![1]

Note: This is intended to be a fair and accurate report, presented for information purposes only. This article does not constitute legal advice. Should any errors be found, please contact the editor and they will be dealt with immediately.

[1] Ord 119, r 3 RSC has been deleted by SI 495/2020 as of 30 October 2020.