Costs awards open to challenge after cap on fees is deemed 'unlawful' by High Court 

Solicitor Barry Sheehan, who took the initial challenge against Cork City Council two years ago, said defendants "were able to adopt this 'deny everything, concede nothing' approach safe in the knowledge there would be no costs penalty for their defendant clients".

Court costs awarded in recent years in Cork are vulnerable to challenge following a High Court ruling, according to the solicitor involved in a landmark case on the issue.

The total figure open to challenge could reach into hundreds of thousands of euro and beyond, and comes after the High Court struck down the scale of costs operated by Cork's County Registrar, saying that Cork City Council had “actively invoked, exploited and endorsed an unlawful system of taxation of costs” drawn up by the Registrar for civil cases at the Circuit Court.

The scale capped the legal costs payable to legal teams irrespective of the nature and extent of work carried out.

Solicitor Barry Sheehan, who took the initial challenge against Cork City Council two years ago, claimed it allowed defendants to deploy a "blanket defence to deny everything", dragging out cases and "forcing plaintiffs to prove matters which could and should have been conceded".

"They were able to adopt this 'deny everything, concede nothing' approach safe in the knowledge there would be no costs penalty for their defendant clients," he told the Irish Examiner.

This blocked access to justice for some claimants who would not have the money to take cases, Mr Sheehan added.

In a decision published this month, the High Court has imposed a costs order for judicial review proceedings against Cork City Council.

The established practice was for the Registrar to grant an amount based on the value of the overall award rather than the legal work carried out, with an indicative sum of €2,500 plus 12.5% of the value of the award provided for fully contested cases.

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However, Mr Sheehan challenged this after a client brought personal injury proceedings against the council in May 2015 following a fall from a bicycle, citing a pothole in the road.

The case was settled for €9,500 plus taxed costs and Mr Sheehan billed the Council for all work, from the accident in 2012 to settlement in 2017, totaling €37,000 for the case.

In response, and in accordance with the scale, the Council provided a cheque for €10,201. Mr Sheehan said his bill included not only solicitors’ costs but also barristers’ fees and expenses for expert witnesses such as doctors and road engineers.

The High Court determined that the council has to pay the applicant’s costs of the judicial review proceedings and that the applicant was entitled to the costs of the costs hearing, by far the costliest event in the proceedings.

"I would like to see people be paid for the work they do, not by percentages of awards or reference to a scale that has been found to be unlawful," Mr Sheehan added.

The case may have ramifications, he said.

"Almost every single case in which the council and insurance companies were involved in, for at least the last six years, operated on the basis of this scale. 

[Costs open to challenge] would range from tens of thousands to possibly reaching past a million.

Cork City Council said it had sought to minimise costs to be paid to plaintiffs to appropriate and justifiable amounts.

A spokesperson continued: “It should be noted that the County Registrar has adjudicated on numerous taxations over the years where costs were taxed by plaintiffs where defendants were represented by numerous public bodies, insurance companies and government departments. The City Council have at all times complied with the findings of courts, and of the County Registrar in respect of costs, once a ruling is made.” 

Although its cases also pass through the Registrar’s office, Cork County Council said it was unaware of ever using the scale for costs. When asked to outline what system was used for cases, a spokesman did not respond in time for publication.

The responsibility for setting the scale of costs is a function of the County Registrar.

The Law Society of Ireland said it cannot comment on individual cases and added that, generally, scales of costs are "anti-competitive and have been for many years now".

A spokeswoman said: "Different cases, while of similar value, often require vastly contrasting labour hours and this needs to be reflected in the costs allowed."