Friday 15 December 2017

Brexit boom yet to take shape for Ireland's legal services industry

According to the World Bank, Ireland remains an expensive location in which to enforce a business contract and is the sixth most costly in the OECD. Stock picture
According to the World Bank, Ireland remains an expensive location in which to enforce a business contract and is the sixth most costly in the OECD. Stock picture
Shane Phelan

Shane Phelan

Expectations of a Brexit boom for the Irish legal services industry have so far failed to materialise.

Although hundreds of solicitors based in England and Wales have signed up to practice in Ireland since the Brexit vote last year, it now appears few, if any, have set foot in Ireland since then.

And only one major international player, Pinsent Masons, has announced it will set up an office in Dublin, a move the law firm said it had been likely to make anyway.

Despite the current uncertainty, London remains the world's number one financial centre and the UK remains the second largest market for legal services globally behind the US.

A major factor underpinning this dominance is the number or international businesses choosing English law to govern their agreements. Around 80pc of all cases dealt with in London's Commercial Court involve at least one foreign party.

This legal services business is threatened by Brexit, with the real possibility it will become much more difficult and expensive to enforce judgments of the English courts in EU member states.

According to research conducted by the Bar Council of England and Wales, some international parties have already chosen not to issue proceedings in England, fearing they may not be able to get orders enforced elsewhere.

Read More: Northern firms plan to set up a base here to avoid tariffs

As yet there is no evidence of a trend towards these cases being taken in Ireland instead.

In theory, Ireland should be well placed to capitalise due to our use of English and the type of legal system we use.

According to the Bar Council analysis, the fact Ireland would be the only English-speaking common law jurisdiction fully integrated into the European legal order would help attract financial and other service industries to come here and increase the market for legal services.

However, there are also a number of factors in the negative column. These include the high cost of legal services in Ireland, the length of time court cases take, and the continuing struggles of the Court of Appeals to deal with backlogs.

In a Brexit analysis for the 'Parchment' magazine, Matthew Austin, a partner at Hayes Solicitors, said clients continue to be amazed at the length of time it takes to dispose of litigation in the High Court.

According to the World Bank, Ireland remains an expensive location in which to enforce a business contract and is the sixth most costly in the OECD.

The cost of enforcing a claim amounts to 26.9pc of the claim, compared to the OECD average of 22.1pc. It also takes considerably longer to enforce a contract in Ireland (650 days) than the OECD average (551 days).

Law Society director general Ken Murphy rejects the notion that Ireland is uncompetitive in terms of legal costs, pointing to higher costs in the UK.

He said more relevant stumbling blocks to attracting international business to Ireland are capacity problems such as the lack of availability of office space, houses and even school places. He also said court backlogs could be greatly and inexpensively tackled by appointing more judges.

Irish Independent

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