Judge wants reform of ‘millionaire’ costs in High Court cases
A HIGH Court judge has called for an urgent reform of legal costs, highlighting that the loser of a straightforward case could be hit with a bill for €2million.
Judge Michael Twomey said such high costs made High Court cases potentially ruinous for the ordinary person, and played into the hands of users of ‘Slapps’ – strategic lawsuits taken ‘in order to stifle actions or comment with the threat of litigation’.
He noted: ‘Many cases end up being settled, not because this represents the justice of the case, but because the high level of costs in the High Court ends up being weaponised and used, in the words of the Supreme Court, as “blackmail”.’
Judge Twomey made his comments while refusing an application for a plaintiff to have to put up almost €1million in costs in advance before being allowed to proceed with a case. He noted that the ‘millionaire’ sums estimated for legal fees were considerably more than the Taoiseach earns.
He said the costs issue could affect every person in the State, noting that ‘at any time, any individual could be sued’ in the High Court.
‘This means that any individual could end up, at any time, being a losing litigant in a High Court case and then be forced to pay these “millionaire” rates,’ he said.
He continued: ‘This is not the first time that a judge has expressed misgivings regarding unaffordable legal costs. It is six years since [former High Court president] Judge Peter Kelly stated that “the only people who can litigate in the High Court are paupers and millionaires”, while four years ago, Chief Justice [Frank] Clarke called for the Oireachtas to give urgent consideration to the reform of laws which govern the cost of going to court.
‘It is also almost four years since the Kelly Review called for the reform of legal costs. However, as can be seen from the expert evidence in this case, these “millionaire” rates continue to be the going rates applied by the Legal Costs Adjudicator in calculating the amount a losing litigant must pay her opponent’s lawyers in High Court litigation.’
In the case before him in the Commercial Court wing of the High Court, which he described as ‘a relatively straightforward alleged breach of contract’, Connective Energy Holdings Ltd has sued Energia Group ROI Holdings for €3million.
‘Energia wants Connective, which has little or no assets, to pay into court an estimate of Energia’s legal costs, before proceeding with the litigation against Energia’, the judge said. ‘In this way, if Energia wins the litigation, there will be money available to pay its legal costs.’
Judge Twomey said the estimate of costs was done by a Legal Costs Adjudicator. This estimate was based on the fees for a trial lasting less than seven-and-a-half days.
‘To put these fees into context, the most important office-holder in the State, the Taoiseach, earns €230,372 for 52 weeks’ work or circa €5,000 per week,’ the judge said.
The highest estimate was for €937,186, based on the trial lasting 16 days, under which the solicitor would receive €473,550, the senior counsel €214,020, and the junior counsel €148,830.
If Connective were to lose the case, it would also have to pay its own legal costs.
Judge Twomey ordered that Connective must put up €370,919 in security for costs, excluding VAT.
‘The Taoiseach earns less’