Complaints in the Irish legal system have been growing with regards to the protracted nature of certain actions that are being brought before the courts. Many of these cases involved vague pleadings and blanket denials that resulted in legal and factual impasses cluttering up court time. Inefficiencies arose due to the absence of proper case management and defined procedures. There were also problems when complex commercial cases came before judges who lacked the specialised commercial knowledge to deal with the issues raised, which sometimes resulted in cases being unnecessarily drawn out.
To address these problems, a variety of committees and working groups were set up, including, among others, the Company Law Review Group, the Working Group on a Courts Commission and a sub-committee from the Law Society Litigation Committee. Based on the groups’ reports, in February 2002 Ireland’s Committee on Court Practice and Procedure recommended the establishment of a Commercial Court in Dublin. This proposal was greeted with a groundswell of support from judges, barristers, solicitors and the business community alike.
Ireland’s new Commercial Court is similar to the Commercial Court in England and Wales established in the 1890s. It functions as a separate division within the High Court. Its rules have been implemented into Irish Law by Statutory Instrument No 2 of 2004 and Order 63(a) of the Rules of the Superior Courts. On 12 January this year, this specifically allocated, high-tech Commercial Court headed by Mr Justice Peter Kelly commenced hearing cases.
Objectives of the Commercial Court
The broad purpose of the Commercial Court is to make the current method of dealing with complex commercial cases more streamlined and efficient.
These objectives will be achieved in a number of ways. There will be a focus on the early identification of the matters that are truly ‘in issue’ between the parties. An increase in the amount of out-of-court settlements will be encouraged as a result of directions from the judge for the parties to engage in mediation, conciliation or arbitration. There will be an introduction of a new case management regime, controlled by the judge, where proceedings are prepared for trial in a manner that is more efficient and more likely to reduce the costs of the proceedings.
At present there are two judges specifically assigned to the Commercial Court – Judge Kelly and Ms Justice Mary Finlay Geoghegan. These judges will hear and determine proceedings and applications to the Commercial Court. It is envisaged that they will each be responsible for a case from its entry into the Commercial Court list to its disposal, which will result in familiarity with the facts and issues involved.
Scope of the Commercial Court
In order for a case to qualify for the Commercial Court list, the claim must be for at least €1m (£666,000). Furthermore, similar to the Commercial Court in London, the nature of the claim must come within the following categories:
- Interpretation of business documents or contracts
- Insurance and reinsurance
- Purchase and sale of commodities
- International trade in, or transport of, goods
- Banking and financial services
- Operation of markets and exchanges
- Intellectual property
- Exploitation of fuels or natural resources
- Professional negligence, with certain exceptions
- Statutory appeals from, or judicial reviews of, regulatory decisions that have commercial effects
- Construction of any vehicle, vessel or aircraft
In addition to these categories, the judges have discretion to include a case on the Commercial Court list if they consider it appropriate.
Furthermore, the fact that a case falls within any of those definitions does not guarantee it a place on the list. Again the judges can exercise their discretion in refusing the admission of cases on to the list.
Proceedings in the Commercial Court
The proceedings will be issued out of the central office of the High Court in the usual way, but any party to the action can apply to have the case transferred to the Commercial Court list. Applications to transfer to the list must be accompanied by a certificate from the applicant’s solicitor to the effect that the proceedings are appropriate to be treated as commercial.
The first stage in a Commercial Court case is the initial directions hearing. At this hearing, the court may give directions as to the manner in which the trial is to be conducted, and as to whether formal pleadings should be dispensed with. It may fix issues of law or fact, or facilitate the parties in defining them, and give directions designed to advance preparation of the case for trial. These directions should help to facilitate the early defining of issues in dispute. The judge will also decide whether the proceedings ought to be subject to case management.
At their own discretion or having been encouraged by the court at the initial directions hearing, parties have a defined time-scale, not exceeding 28 days, to explore all avenues open to them to settle the proceedings by recourse to mediation, conciliation or arbitration.
At the initial directions hearing, the court might direct consultation between expert witnesses in order to identify the issues they intend to give evidence on. They would also, where possible, reach agreement on the evidence they intend to give and consider any matter at the judge’s direction.
Case management is one of the most beneficial and cost-saving elements offered by the Commercial Court. Should the judge decide that the proceedings ought to be subject to case management, it will take place in the form of a conference chaired by the judge and requires the attendance of the solicitors representing the parties in the case. A ‘case booklet’ containing full details of the matter should be prepared by the plaintiff and furnished to all parties concerned.
A very important element of the case management procedure is that a timetable is fixed for the completion of the preparation of the case. The judge has the power to penalise for failure to meet the obligations to act within this time frame when the issue of costs comes up for decision.
All cases due for trial on the Commercial Court list are subject to a pre-trial conference before the judge. Counsel or the leading solicitor must attend the conference. At this conference the judge will fix a trial date. Written statements of evidence need to be signed and dated by the witness or expert and served upon the other side before the trial. The court may, in exceptional circumstances, direct that such a statement be treated as the witnesses’ evidence-in-chief when verified on oath. This will avoid the possibility of ‘trial by ambush’, where unexpected evidence is introduced in the course of the trial.
At the discretion of the plaintiff or the judge, a motion can be brought to adjourn the proceedings for up to 28 days to allow the dispute to be referred to a process of mediation, conciliation or arbitration. This facility will help to develop the process of alternative dispute resolution in Ireland.
The new regime contemplates that costs of interlocutory applications will be awarded on determination of the application concerned, apart from where it is not possible to decide on the issue of liability at that stage. The judge in charge of the Commercial Court list may prescribe requirements as to the form and content of bills of costs to be furnished in cases entered.
The Commercial Court in Dublin is one of the most high-tech courtrooms in the world. The facilities include digital audio recording, video conferencing and electronic evidence distribution catering for evidence from CD, DVD, VCR, visual presenter, evidence PC/Server or from counsel’s laptop. This allows for the increased use of new technology in the processing of cases as well as the hearing of evidence by video link from abroad. Evidence is displayed to the public through a large plasma screen and through touchscreens located on the judge’s, counsels’ and registrar’s benches.
The volume of commercial litigation in Ireland has increased to the extent that the judicial system needed to adapt its procedures in order to cope. The new Commercial Court is a significant positive development. If the Commercial Court is a success, Judge Kelly has stated that “there is no reason why aspects of it could not be introduced into other areas”.
Terry Leggett is a partner and head of litigation at Eugene F Collins in Dublin