Business and Commercial Disputes

The Commercial Court

The Commercial Court was established at the start of 2004 as a division of the High Court to deal with high value commercial disputes. Its aim is to have the dispute before the court disposed of as soon as possible either by agreement of the parties, the dismissal of the case for the non-fulfilment of interlocutory Orders or by judicial determination. One judge sits in this court when dealing with commercial proceedings admitted to its jurisdiction.

Choice of High Court

The commercial imperative for a speedy solution can now be achieved at high cost in this court. Cases which are admitted to the Commercial Court are resolved, on average, in about three months from the case first being admitted. These resolved cases are not cases which have all been judicially determined. Many cases are settled, after listing in the Commercial Court, between the parties privately because of the high cost risk and the pressure of the short deadlines imposed by the court to achieve the early solution objective. In contrast, commercial disputes which are brought to the High Court via the ordinary plenary proceedings route are under a much more relaxed regime in which a judicial hearing will normally not take place before two years from the date of the commencement of the court proceedings. The reality of commercial litigation in Ireland is that most disputes are solved on ground of costs and expediency by private agreement between the parties following the commencement of the court proceedings and the exchange of pleadings.

Both Claimant and Defendant in a commercial dispute will now be considering whether to bring an application to have the dispute listed before the Commercial Court, if it is eligible. Both should be aware that this decision must be taken very carefully. A case should not be brought into the Commercial Court list until the applicant has considered and assessed all of the likely consequences of such a listing, the nature of the dispute, the evidence available, and ideally the witnesses available, the documents in evidence required, all jurisdictional matters, all issues of applicable law and the burden of discovery. Experts’ evidence should be known before any listing. The Claimant should be prepared for the increasingly frequent strategy of the Defendant bringing the application to list the Plaintiff’s claim and the Defendant’s Counterclaim in the Commercial Court thereby hoping to place the Plaintiff on the back foot.

What commercial proceedings can be listed in the Commercial Court?

Claims or Counterclaims of a value of not less than €1 Million and which, according to the Court Rules (S. I. No. 2 of 2004) arise from or relate to any one or more of the following:

  1. A business document, business contract or business dispute.
  2. The construction of any business document or business contract.
  3. The purchase or sale of commodities.
  4. The import or export of goods.
  5. The carriage of goods by land, sea, air or pipeline.
  6. The exploitation of gas or oil reserves or other natural resource.
  7. Insurance claims or reinsurance claims.
  8. The provision of services (excluding medical, quasi-medical or dental services or any service provided under a contract of employment).
  9. The operation of markets or exchanges in stocks, shares or other financial investment instruments.
  10. The construction of any vehicle, vessel or aircraft.
  11. A business agency.
  12. Any application or proceedings under Irish arbitration law (The Arbitration Act, 1954-1998) where the value of the claim or counterclaim is above €1 Million (other than an application to stay court proceedings in cases where an arbitration agreement exists or is alleged).
  13. The court also has a jurisdiction to deal with most intellectual property law matters or any proceedings instituted for relief in respect of the tort of passing off. The Rules make specific reference to proceedings instituted or any application or reference made or appeal lodged under Irish Statutes dealing with patents, trademarks, copyright and related rights, and industrial designs. Actions relying upon such legislation can be brought before the Commercial Court.
  14. The court has jurisdiction without reference to any monetary minimum, to deal with any appeal from, or application for judicial review of, a decision or determination made by a person or body authorised by Irish statutory law to make such a decision or determination or give such direction provided that the judge considers that such appeal or application is “having regard to the commercial or other aspect thereof appropriate for entry in the Commercial List”.

Discretion

The court also has an important discretionary jurisdiction to deal with any claim or counterclaim which the judge “having regard to the commercial and any other aspect thereof, considers appropriate for entry in the Commercial List”.

What claims cannot be listed?

Excluded from the Commercial Court are:

(a) any claims or counterclaims for damages for personal injuries,

(b) any claims arising from any medical, quasi-medical or dental services claims or,

(c) any claims arising from “any service provided under a contract of employment”.

High Stakes:

The court will only deal with disputes of high value or of considerable commercial importance. The parties in those circumstances should apply to have the dispute dealt with by the Commercial Court only if it is in their commercial interest to have the dispute resolved as soon as possible taking into account the resulting high cost, the high pressure and demands on them. Much of the work in preparing the case is front-loaded. Responding to short, guillotine deadlines imposed by the court to advance the matter and to avoid costly and sometimes fatal default consequences requires dedicated human and mechanical resources to be made available and financed. Our experience is that litigants outside of the common law jurisdiction and the English language zone are at a considerable disadvantage. Many of the common law concepts and procedures such as “privilege”, “confidentiality”, “admissibility of evidence”, “discovery of documents” are different and are largely unknown to them. Our German clients, for example, will have the added disadvantage that the language of all courts in Ireland is English so that all foreign language documents will require to be translated to English before they can be admitted in evidence. This adds to the cost and creates time delays.

The unsuccessful party will generally be ordered to pay the “party-and-party” costs and outlays of the successful party. This will not indemnify the successful party for its own legal team’s costs which are calculated on a “solicitor-and-client” basis. Such costs are measured not only by reference to time engaged but also to a number of other factors such as difficulty, novelty, urgency and also the need for language interpretation and translation. It is important to understand the cost risk before litigating.

The parties in disputes before the Commercial Court will be given very strict deadlines. The court will generally penalise with costs any party who fails to adhere to the deadlines imposed. Repeated failure to comply may lead to an application for the strike-out of the claim or of the defence and/or counterclaim and/or for cost orders against the defaulting party. Litigation at this level will often involve each party working with legal teams of six and more lawyers and in consequence there is high cost. As a minimum the client’s legal team will be made up of a senior counsel, a junior counsel, a senior solicitor and an assistant solicitor. If the client is from abroad, it will also often involve its local lawyer to work with us. Interpreters and document translators may be needed. These legal teams are required so as to deal with the legal issues arising and the case management and administration and document production, classification and analysis.

Our Support

Our firm is available to support you in your commercial dispute. We will advise you upon strategy and about the advantages and disadvantages of proceeding before the Commercial Court or by ordinary plenary proceedings in the High Court. All litigants must now be aware that if the dispute value and nature of the case falls within the jurisdiction of the Commercial Court, either party may choose to have the case determined by the judge of the Commercial Court. This decision may be taken for commercial reasons and/or as a tactical/strategic measure.

For further information contact Duncan Grehan & Partners