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The legal costs of resolving a dispute in the High Court in the amount of 228,000 euros can exceed 500,000 euros, a judge has said.
That underscores the “disproportionate” level of legal costs in Superior Court and why the recent civil justice review has called for reform, Judge Michael Twomey said.
High legal costs have been a serious problem for years and regularly throw up the kind of anomalies that had occurred in the case before him, the judge said.
This raised serious questions about how access to justice can be denied, even for citizens with average incomes in the state.
He made the remarks when he ordered an insolvent company, Tom McEvaddy Properties Ltd, listed as Nexus Homes (in liquidation), Nexus, to pay 180,000 euros of guarantee of Nama’s legal costs for defending the case, which is expected to last four days in Superior Court. , above the sum of € 228,000.
Nama (National Asset Management Agency) questions Nexus’ claims that it holds the sum in trust for the company. The disputed sum relates to planning fees paid for the development of a property in Sandyford, Co Dublin, owned by a couple who are the sole shareholders of the company.
While Nama’s legal cost experts estimated the High Court’s costs at about 231,140 euros, the judge said, absent evidence from a cost expert for Nexus, he would order a guarantee for 80 percent of that sum.
Assuming the company will incur similar legal costs, the total costs of the High Court proceedings could be about 460,000 euros, he said. If the result were appealed, as is the case in most High Court cases, the final cost of this dispute of more than 228,000 euros could exceed 500,000 euros.
I had no reason not to believe the NAMA expert evidence as to the “current fee” for Superior Court litigation, including € 80,465 as professional attorney fees, € 75,020 (including € 36,300 short fee plus VAT) for senior lawyers and € 55,962 for junior lawyers.
Noting the recent report by the Civil Justice Review group, he said that the majority of the group believed that the high legal costs here could be addressed through non-binding guidelines, while a minority, supported by the chair of the review group, the Former Chief Justice Peter Kelly maintained An independent committee established by law should establish a mandatory scale of maximum costs.
Although Nexus is a corporate plaintiff with no recourse and was awarded collateral for costs, this case highlights how justice could be denied if a citizen with average income were sued by an individual plaintiff without recourse residing here unless collateral is granted by costs, he said.
The case also demonstrated the veracity of Judge Kelly’s comment: the only people who can litigate in Superior Court are the “poor and millionaires.”
The judge had previously ordered the company to provide a guarantee for the costs of the process and then heard allegations about the amount of the guarantee.
In his recently published ruling, he said that the guarantee must be for the full amount of those costs to avoid the risk of “injustice” to Nama (of having to waive his legal costs if the company loses the case). He set the guarantee at € 185,000, VAT included.
While it had found in a previous ruling that the company did not have a prima facie case for the return of Nama’s 228,000 euros, that decision was made solely on the basis of a preliminary hearing, it said. It was possible that, in the full test, Nexus would establish that it is the owner of the disputed money.
He stressed that there is no suggestion that the company considers using its impecuniousness as an unfair tactic in litigation or that it does not genuinely believe it has a good case for money back.
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