Mark Regan of Regan Solicitors takes part in Negotiating Effective Contracts & Dealing with Disputes

QUESTION ONE – What is your best practice approach when advising General Counsel, to ensure dispute resolution clauses are to their real advantage and do not obstruct enforcement proceedings?

The Republic of Ireland will soon be the largest English speaking Common Law jurisdiction within the EU. Due to its procedural effectiveness and certainty, common law is the preferred governing law for a high proportion of international clients. There are advantages arising from Ireland’s continued membership of the European Union, including that Irish judicial decisions are recognised and enforced throughout the European Union, There are also the benefits of uniform interpretation of rules regarding jurisdiction and choice of law and the ability for other legal procedures in Ireland to be recognised and enforced throughout the European Union (including insolvency proceedings where the “centre of main interest” is in Ireland).

Ireland has an experienced legal profession and the Irish Government has a record and commitment to the nature and demands of international business.

For higher value commercial disputes, Statutory Instrument No 2 of 2004 created the Commercial List. Ireland has become the forum of choice for judicially managed commercial disputes. Most claims over EUR1,000,000 (and some below) can seek to have the matter moved to the commercial list in the High Court where specialist and experienced judges preside. The court uses a detailed case management system that is designed to streamline the preparation for trial, remove unnecessary costs and stalling tactics, and ensure full pre-trial disclosure. The court can also adjourn to facilitate mediation, conciliation or arbitration. The rules are designed to give the court flexibility in managing cases.

It is a quick and effective forum for high-value commercial litigation.

QUESTION TWO – Are there any particular rules around funding litigation in your jurisdiction that General Counsel should be aware of?

The recent Persona judgment from the Irish Supreme Court confirmed that third-party litigation funding agreements are prohibited under Irish law. The principal restriction for such agreements is based on the torts of maintenance and champerty. Of course, the third party with a legitimate interest in the proceedings can fund the litigation, such as a creditor or shareholder, but may be liable for costs should they lose the case. After the event insurance is permissible in the Republic of Ireland but this does not address the costs of running the case.

Parties can lawfully enter into conditional or contingency arrangements, where any payment made to the solicitor they instruct in the litigation is contingent on the success of the case. These arrangements are less common in commercial cases. Whilst these arrangements are lawful, Irish lawyers are prohibited from charging fees by reference to the damages awarded in the litigation.

Cases before the Commercial List have a distinct advantage as the case management system removes costs uncertainty with quick resolutions, the courts refined approach to decisions on costs and the exchange of summaries of witness evidence and experts’ reports in advance of the hearing.

Conditional or contingency arrangements, where any payment made by the client to the solicitor they instruct in the litigation is contingent on the success of the case. These arrangements are nor encountered commercial cases. While these arrangements are lawful, Irish lawyers are prohibited from charging fees by reference to the damages awarded in the litigation.

Law firms have increasingly moved towards a monthly payment system on an account basis which is preferred by many clients as a means to avoiding a lump sum bill.

In all instances, these matters are a matter for discussion and are influenced very much on the complexity of the matter, liability and anticipated length of time a matter is expected to take and the number of fee earners required.

QUESTION THREE – What techniques are typically used by international counterparties in your experience when attempting to gain the initiative during a dispute? How important are civil procedural rules?

Instructing local legal advisers at an early stage is critical. Here at Regan Solicitors, we have a wealth of knowledge, skills and practice in advising international clients in cross-border transactions, working with non-Irish governing law and daily engagement with international businesses and financial institutions.

Businesses with a presence in the Republic of Ireland should also consider having an entity within the jurisdiction. Where there are employees working and/or residing within the jurisdiction, the employer should have a registered address within the jurisdiction. Any future dispute can be dispensed with efficiently and effectively.

There are a number of interim remedies available in Ireland that allow a party to take more immediate action while the litigation proceedings take their course. For example, a party can seek a freezing injunction to restrain the dissipation of assets by another party if they believe that the other party will do so before they are able to obtain and enforce a court judgment against them. A freezing order is a type of interlocutory injunction and the object of such injunctions is to maintain the status quo between the parties until the final disposal of the action in court (or such other period as ordered by the court). Other examples of an interlocutory injunction are injunctions to prevent the publication of potentially defamatory articles, or injunctions to prevent breaches of contract. A party can also seek to obtain a search order where they believe that certain documents may be destroyed or withheld from the discovery process. The availability of such interim remedies is strictly controlled by the courts.

In Ireland, civil procedural rules are very important. Failing to meet directions of the court, filing the wrong document or missing a filing deadline can have costs implications and delay matters. Instructing an experienced local legal team alleviates any concern in adhering to these rules.

TOP TIPS FOR: Successful negotiations

DO Check the parties have the capacity. A limited company can only enter into a contract if permitted in its Memorandum of Association. Secondly, check if the person who is entering into the contract on behalf of the company has the power to do so.

DO Check the type of contract. Most terms in a commercial contract are agreed between the parties, however, there may be implied terms or obligations dependent on the type of contract. The Sale of Goods and Supply of Services Act 1980 and the Consumer Protection Act 2007 apply to consumer contracts and the Land and Conveyancing Law Reform Act 2009 to the sale of land.

DON’T Omit provision for breach of contract. Insert a jurisdiction and governing law best suited for an effective and quick resolution. Include a mediation or arbitration clause that is clear as to how it will be implemented.

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