THE COMMERCIAL Court is due to see more cases where banks and other financial institutions are seeking to recover lent money, according to the court’s senior judge, Mr Justice Peter Kelly.
Speaking of the trends revealed by court records, Mr Justice Kelly told The Irish Timesa number of cases were taken during the height of the boom seeking specific performance of contracts entered into to buy land, where the purchaser was later "gazumped" by someone offering a higher price, and the original purchaser sought assistance from the courts.
Later this process was reversed, when land prices were falling and vendors were seeking to force purchasers to complete a purchase at the original price agreed, he said.
In recent months there have also been a number of cases submitted by banks against solicitors arising from undertakings they gave concerning the title to the lands on which money was advanced.
Recently, Mr Justice Peart gave judgment in one such case, finding a firm of solicitors liable for a €3 million loan advanced on foot of a solicitor’s undertaking, where the money was diverted into paying for a deposit on a different property to that for which it was given.
Exactly 1,000 cases have come before the Commercial Court since it began operating in January 2004. Of these, 750 cases have been disposed of, with 250 still outstanding.
The latest figures show a steady increase in the volume of cases coming before the court, with 258 entered to the end of August this year, compared with a total of 241 for the whole of 2008.
With just over three months still to go in 2009, the total number of cases coming to the court is expected to show a significant increase on last year, according to Mr Justice Kelly.
Last year had seen an increase to 241 cases entered from 194 the previous year, and that in turn was an increase on the 114 entered in 2006. A second judge, Ms Justice Finlay Geoghegan, was assigned to the court in 2006, and last year Mr Justice Clarke, Mr Justice MacMenamin and Mr Justice McGovern also started hearing Commercial Court cases.
In many instances the case does not get heard at all, as it is settled in the process of the issues being teased out pre-hearing. Other cases are settled after some days of a hearing.
The average time taken to dispose of a case is 21 weeks, and that has remained constant since the court began operating, due to the allocation of extra judges and the emphasis on pre-trial preparation, Mr Justice Kelly said.
According to the latest figures, 50 per cent of cases are concluded within 14 weeks, and 75 per cent in less than 31 weeks. Only 10 per cent of cases take more than 46 weeks, between being lodged and being concluded.
Of the 750 concluded cases, 182 were disposed of after a directions hearing, and a further 89 were disposed of after a hearing date was fixed.
Only 241 went to a full hearing, and a further 124 were settled at hearing.
The fact that so many cases are settled without going to a full hearing means that many of the issues involved are never aired in public. However, to date, about one in four cases has gone to a full hearing.
In the coming months, as the new law term begins, such hearings may offer enlightening insights into the lending practices of banks and the commercial practices of their clients.
According to legal sources, proceedings taken by financial institutions are likely to be met in some cases by counter-claims, where the debtor will claim that he or she borrowed the money on the basis of advice given by the banks, and in light of inflated valuations.
When these cases get to court, according to legal sources, it is likely many borrowers may seek discovery of internal bank documents, including the incentives and bonuses that were paid to those selling the loans.