Analysis:In most civil court actions the question of costs is left to the end, when the judge either "makes no order as to costs" or they "follow the event", meaning the winner gets his or her costs from the other side. If a case is settled, the issue of costs usually becomes part of the settlement.
If there is a dispute about these costs, it goes to the County Registrar in Circuit Court cases, and to the Taxing Master where the case went to the High Court.
There are two Taxing Masters, James Flynn, who was in private practice before his appointment, and Charles Moran, who worked in the Chief State Solicitor's office for 15 years before taking up the job. The Taxing Masters are bound by the order of the court when it comes to costs. They have no role in deciding whether or not they were fairly awarded. There are guidelines, however, from legislation, from rulings of the higher courts, and from judgments of the Taxing Masters themselves, as well as guidelines from the professional organisations.
But these have not prevented fees being charged that the Taxing Masters, and the public at large, consider excessive.
The 1981 Courts Act, as amended by the 1991 Act, states that costs should be linked to the jurisdiction of the court, which in turn depends on the value of the claim. The Circuit Court has jurisdiction for claims up to £30,000 (€38,000), after which the High Court has jurisdiction. High Court fees are considerably higher than those appropriate to the Circuit Court.
One example arises when the fees charged are at the High Court rate. If an action is taken in the High Court, and if the award falls below that jurisdiction, then the fees claimed should be Circuit, rather than High Court, fees. The only exception is where the award falls between £25,000 and £30,000 (translated into euro), where the judge has the power to issue a certificate stating that it was reasonable in the interests of justice that the case should be heard in the High Court, with corresponding fees.
However, according to consent orders seen by The Irish Times, settlements exist for relatively modest awards where the solicitor seeks a certificate from the judge for the senior counsel stating that the higher High Court costs apply.
Decisions of the Taxing Master can be appealed to the High Court, and sometimes have been, with mixed results. High Court judges, most of whom still have been recruited from the barristers' ranks, do not necessarily have the experience of closely looking at all aspects of legal fees, so there is little consistent jurisprudence on legal costs.
In a paper to a Continuing Professional Development conference for solicitors, Moran observed: "It is disappointing to note that very few if any solicitors make any attempt to negotiate with counsel the brief fee either before or after the hearing." He added: "It appears to me that in some cases, over reliance is placed on the amount of the award or the monetary value of a case when it comes to marking fees rather than on the overall nature and extent of the work undertaken and performed which is the correct and fundamental basis for assessing costs."
This is now being addressed by the Bar Council, which has asked all its members to provide a fee estimate in advance, and is going to appoint a compliance officer to ensure compliance with its Code of Conduct on fees and other matters. This arises from its engagement with the Competition Authority, the Legal Costs Implementation Group and the concerns raised by the Taxing Master last January, according to its chairman, Turlough O'Donnell SC. He said it will be advertising for such a compliance officer shortly.
In his paper, Moran proposed a special "cost judge" to whom appeals against decisions of the Taxing Masters could be made. He or she would have the power to award costs to the successful party in the appeal. He also suggested that Taxing Masters have a statutory power to report solicitors, counsel or expert witnesses to their respective professional associations or governing bodies, and the cost judge, for overcharging, a power they lack at the moment. The judge should be able to impose fines or other sanctions.
The Government is currently preparing legislation on the regulation of the legal profession, including the establishment of a Legal Services Ombudsman. Bringing transparency and control to the levels of fees charged, with serious sanctions for overcharging, will form an important part of any new regulatory regime.