On 25 January 2016, the Court of Appeal delivered its decision in the matter of Emerald Isle Assurances and Investments Limited & ors -v- Dorgan & ors  IECA 12. The case involved an appeal by the Plaintiffs’ against the decision of Kearns P (as he was then) who on 12 January 2012 delivered an ex tempore judgment dismissing their claim for negligence against their former solicitors, Coakley Moloney. The negligence action arose on foot of the carriage of High Court proceedings against Hibernian Life Limited (“Hibernian”) which were first initiated in January 1995. The Court of Appeal decision potentially brings closure to a twenty-one year dispute affecting multiple parties.
In 1995, the Plaintiffs issued proceedings for damages for breach and wrongful termination of a tied agency with Hibernian and sought special damages in the sum of IR£6,248,600.37.
In 2002 Hibernian issued a motion to dismiss for want of prosecution. The motion was struck out but costs were awarded to Hibernian.
Subsequently, the Plaintiffs engaged a well known forensic accountant, Des Peelo, to provide expert evidence in respect of their claim. However, despite numerous draft reports being prepared by Mr. Peelo, a figure could not be agreed with the Plaintiffs which he would stand over.
In January 2010, Hibernian issued a second motion to dismiss for want of prosecution and, on advice, the Plaintiffs compromised the proceedings for an ‘all in’ sum of €300,000.
In 2010, the Plaintiff’s issued High Court proceedings against Coakley Maloney for negligence in the handling of the 1995 claim. Following the hearing Kearns P dismissed the Plaintiffs’ claim. He held that although Coakley Maloney ought to have provided a “much more elaborate warning” of the imminent danger and consequences of a further motion to strike out, any further warning would not “have brought any other result” as the Plaintiffs had never indicated what amount they would settle for.
This decision was reached in spite of the fact that 15 years had passed since the proceedings were issued and that the ‘all in’ sum, accepted on the eve of the second motion to dismiss, was a fraction of the damages claimed by the Plaintiffs.
Court of Appeal
On 25 January 2016, the Court of Appeal’s judgment was delivered by Ryan P. on behalf of Hogan J and Irvine J.
The Defendants were not considered to be negligent in respect of the warning letter issue specifically. Rather, the Court of Appeal found that the Defendants did have options by which to break the "impasse" between the Plaintiffs and the forensic accountant which included any of the following strategies:
(a) to proceed to the hearing without a forensic accountant but to advise the clients of the dangers in doing so;
(b) to insist on engaging another expert urgently; or
(c) to seek Senior Counsel’s advices on how to overcome the “impasse”.
The Court of Appeal could not overlook the fact that the 1995 proceedings had gone on for 15 years, which resulted in two motions to dismiss having issued and the proceedings being settled for a fraction of the ‘value’ claimed.
It held that the impasse which arose was not an “impossible, intractable problem” and that “options and consequences” were available to the Defendants. Accordingly the appeal was allowed and the matter has been remitted to the High Court for assessment of damages.
Many solicitors have cases or clients that they are not fond of. This is often because of the characters or the complexities involved. Many files end up gathering dust for this reason which causes a fear of ‘review’ as no progress will have been made. Unfortunately, many solicitors have a common failure of not having regular file reviews. This means files are not proactively progressed and problems are allowed to fester. When there are regular file reviews, with input by senior colleagues, more proactive file management is inevitable and will result in problems being addressed sooner.
Solicitors can not let the "grass grow under their feet" no matter how impossible an "impasse" may appear to be. A solution must be found.
My conclusion, therefore, is that the failure in this case is not simply one of the precise terms of a particular letter. It is of a failure of advice and a course of conduct that simply failed to address a particular issue or difficulty that had arisen and that it was not an impossible, intractable problem, but one that had options and consequences, just like many other situations that present themselves to a competent legal or other adviser.