Tuesday 27 September 2016

Judge demands overhaul of litigation costs

Published 16/04/2016 | 02:30

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The "crushing cost" of High Court litigation needs to be tackled, according to a senior judge hearing a whistleblower case being taken by Cork-based training firm Euro Safety against State agency FÁS.

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The comments by Justice Max Barrett were made as he refused a request by FÁS, now known as Solas, to force Euro Safety to provide a substantial security deposit for costs that the latter would incur if it was to lose the litigation.

Euro Safety is suing FÁS for alleged acts of negligence and malfeasance. The firm claims it had been "victimised and blacklisted" for reporting activities of some FÁS staff.

Euro Safety provides training for construction workers, including the 'Safe Pass' scheme.

The firm claimed that in 2002 it told FÁS of alleged "unauthorised activities" being undertaken by a rival training firm and FÁS employees.

The following year, the so-called Spollen Report - drafted as a result of the Euro Safety allegations - highlighted failures in FÁS safety training in the construction industry.

The report warned top FÁS executives that the matters raised were of a "very serious nature".

In 2012, Euro Safety filed a claim for damages against FÁS. Euro Safety maintains that the result of the alleged 'blacklisting' is that it has suffered a loss of reputation and consequent financial losses to its business, and will continue to do so.

Last year, FÁS asked the High Court to force Euro Safety to hand over hundreds of thousands of euro by way of a security deposit for the case.

FÁS accountants have estimated the case will cost it €600,000 to complete and Euro Safety could have to pay the FÁS costs if the Cork firm loses.

"To put matters differently it would take roughly 20 times the current median annual salary and about 30 times the present minimum annual salary to take the present proceedings from start to finish," Justice Barrett said. "This level of costs is now (regrettably) typical and inevitably throws up dilemmas of the kind now presenting."

That €600,000 is just the forecast legal costs for FÁS. The total legal bill for both sides could approach €1m, but in reality is likely to be considerably less, given that the case won't probably last as long as the 20 days FÁS envisages it will.But there is likely to be a huge amount of discovery necessary in the case, which might not be heard until 2019.

Justice Barrett said that Euro Safety believed the case would "die a death" if it was forced to pay a security deposit. It did not have such funds available. He said the Euro Safety case is a matter of public interest.

"At a more general level… the case highlights, yet again, the need for a systemic solution to the present crushing cost of High Court litigation," he added.

How the legal bills add up

Accountants at FÁS reckon the cost of completing the Euro Safety case will bejust over €600,000.

The total cost for both sides could approach €1m. The reality is that it will probably be considerably less, but still so much that it could dissuade those without deep pockets.

The €600,000 projected by FÁS for its owns costs includes €220,000 in solicitors’ fees and €180,000 in total for both senior and junior counsels’ fees.

But that anticipated cost is based on a trial that might run for 20 days. Justice Max Barrett doesn’t think it will last that long, but said that even if an “unscientific” 50pc was knocked off the estimated trial costs presented by FÁS, Euro Safety would still face considerable difficulty in meeting the level of costs then arising if it lost.

 

Solicitors’ professional fees  €220,000

Postage and sundries €2,500

Senior Counsel’s fees  €108,500

Junior Counsel’s fees  €71,150

Expert witness expenses €35,000

Shorthand writer €45,000

Solicitor outlays €1,500

VAT (on fees @ 23%) €109,744.50

Total estimated costs  €601,394.50

Irish Independent

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