Doing the business

Ireland’s new Commercial Court should signal wide-ranging benefits, says Owen O’Sullivan

While England and Wales have had the benefit of a commercial division of the High Court since the 1890s, their Irish counterparts have not. But that is soon to change. The new Commercial Court should be up and running in Dublin early next year, headed by High Court judge Peter Kelly.

Complaints have been growing about delays, vagueness of pleadings, a lack of pre-trial procedures and specialist judges in complex commercial disputes. The Irish government has recognised the need to provide an infrastructure that supports every aspect of doing business in Ireland, including the courts.

The objectives of the Commercial Court are the early definition of issues in dispute and, through directions and case management, and the speeding up of commercial litigation, reduced costs. It will operate as a separate division within the High Court.

At least two judges with recognised commercial expertise will be assigned to the court. They will deal with all pre-trial procedures as well as the trials themselves. Where possible, a single judge will be responsible for each case, from its entry into the commercial list to its disposal.
The rules governing commercial proceedings will reflect many of the practices and procedures in the English system, including some of the reforms introduced by the Civil Procedure Rules.

Commercial proceedings
Proceedings of a commercial nature involving claims of at least e1m (£708,800) may be considered ‘commercial proceedings’. As in London’s Commercial Court, disputes over a business document or contract, the purchase and sale of commodities, the import or export of goods, the carriage of goods and the construction of ships all come within this definition. So, too, will proceedings under the Arbitration Acts and intellectual property disputes that exceed the value threshold. While such proceedings will be issued out of the Central Office of the High Court in the usual manner, any party can apply to transfer them to the commercial list.

Initial directions hearing
The first stage of the new pre-trial procedures is the initial directions hearing. The judge will direct whether the proceedings should continue with or without pleadings by means of statements of issues of law or fact on affidavit, and with or without oral evidence. This will facilitate the early defining of issues in dispute and encourage the appropriate use of interrogatories and the inspection of documents, as well as the taking of accounts and the delivery of experts’ reports. Most importantly, the judge will decide whether the proceedings ought to be subject to case management. While existing court rules already provide for such directions, they are seldom used.

Case management
Case management is not a regular feature in Irish litigation. Even under the proposed rules, not every case will be subject to case management; while the value of the claim may be considerable, the matters in dispute may be straightforward. Managed cases will have a case management conference similar to those in London. While parties can be represented by counsel at these conferences, the rules envisage a greater role for solicitors; and if the conference is attended by counsel, the costs of only one counsel will be allowed on taxation.

The case management conference will ensure that the proceedings are prepared for trial expeditiously. If there has been undue delay, the party responsible will have to provide an explanation before the court. The judge will have power to award costs against any party who fails to comply with a time limit, or who pleads ‘unnecessary matter’. While active case management will result in the front-loading of costs, there ought to be savings over the longer term.

Pre-trial conference
A pre-trial conference attended by counsel and solicitors will be held in all cases before they proceed to hearing. Only when the judge is satisfied that all steps necessary to prepare the case for hearing have been taken will they fix a trial date.

Witness statements
To date there has been no formal exchange of witness statements or witness lists in Irish commercial litigation. This will change under the new Commercial Court rules. Written statements of evidence need to be signed and dated by the witness or expert and served upon the other side before the trial. These will be treated as the evidence in chief once verified on oath at the commencement of the testimony. This should help bring an end to ‘trials by ambush’, in which unexpected evidence is introduced during the course of a trial – a feature in many highly contentious proceedings at present.

Alternative dispute resolution
The proposed rules stop short of introducing a mandatory requirement for alternative dispute resolution (ADR) as a prerequisite to either the issuing of proceedings or the entering of a matter into the commercial list. However, where the judge considers it desirable that proceedings, or any issue within them, should be sent for mediation, conciliation or arbitration, they may adjourn the proceedings so that the parties can avail themselves of one or more of the processes. ADR is still at a fledgling stage in Ireland – the new rules will undoubtedly speed its future development and refinement.

Wasted costs
Many UK practitioners handling Irish litigation have been frustrated by the inability or reluctance of the Irish courts to make wasted costs orders. However, the Commercial Court judge may now make a costs order against the solicitor (as the rules currently stand, only the solicitor) for any party who delays the proceedings by failing: to advance any aspect of the proceedings; to be properly prepared; or to deliver any paper necessary for the use of the judge.

The Commercial Court will undoubtedly provide a more satisfactory framework for complex corporate litigation than exists at present. Cases will be heard by a judge with established commercial expertise, who will be familiar with the issues in advance of any hearing. The initial directions hearing, case management and the pre-trial conference will force the parties to focus on the issues at an early stage and ensure adequate and timely preparation for trial.

A likely spin-off of the changes is that ADR will be adopted more frequently than at present – if not voluntarily, then at the behest of the judge managing the case.

The Commercial Court in London has been operating successfully for over 100 years. We are all looking forward to an equally efficient and effective Commercial Court operating in Dublin in the very near future.

Owen O’ Sullivan is a litigation partner at William Fry.