Bringing a claim - initial considerations

Key issues to consider

What key issues should a party consider before bringing a claim?

A party bringing a claim should consider the limitation period that applies, such as:

  • contract law: six years from the date of breach;
  • claims for liquidated sums: six years from the date the sum became due;
  • tort claims: six years from the date of accrual of the cause of action;
  • land recovery: 12 years from accrual of the right of action;
  • maritime and airline cases: two years from the date of accrual of the cause of action; or
  • defamation: one year from the date of publication.

Parties should also first consider the appropriateness of alternative dispute resolution mechanisms. Where there is an international element to the dispute, a party bringing a claim should consider whether Ireland is the appropriate jurisdiction in which to instigate proceedings. (For further details on jurisdiction, see question 5.)

A party considering bringing a claim should also consider the costs involved. Careful consideration should be given to the approximate value of the claim, as this will determine the level of court in which to bring the proceedings. As to recovery of legal costs, the unsuccessful party is generally ordered to pay the successful party’s costs following the event. (For further details on recovery of costs, see question 47.)

Establishing jurisdiction

How is jurisdiction established?

The Irish Constitution gives full original jurisdiction over all claims to the High Court. The Circuit Court and District Court’s jurisdiction is assigned by statute; these courts have jurisdiction over a limited range of cases and generally these cases would relate to issues of lesser value and importance. There are specialist insolvency judges in the Circuit Court that allow for a cost-effective administrative process for smaller companies. The High Court deals with large commercial litigation.

The courts respect the choice of jurisdiction in a commercial contract in accordance with the provisions of Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I) and the provisions of the recently recast Brussels I Regulation. The recast Brussels Regulation has been transposed into Irish law under the EU (Civil and Commercial Judgments) Regulations 2015, SI No. 6 of 2015, and applies to judgments in proceedings commenced on or after 10 January 2015.

The Irish courts can also accept jurisdiction to determine a dispute where the choice of jurisdiction is not exclusive or where both parties agree to the Irish courts accepting jurisdiction.

Where the defendant is not domiciled in a contracting state to Brussels I (recast), common-law rules apply and Irish courts may claim jurisdiction where Ireland is the most appropriate forum for the claim.

Preclusion

Res judicata: is preclusion applicable, and if so how?

The doctrine of res judicata prohibits reopening an issue that has already been decided between the parties by a competent court or tribunal. The Irish courts regularly enforce the doctrine of res judicata on the grounds that it is in public interest that the litigation comes to an end. The Irish courts will not allow a party to reopen an issue that has already been decided by a competent court or tribunal between the same parties, or to attempt to reopen in new litigation points that could have been decided in a previous litigation and that could have been raised in that litigation. The only effective way for a litigant to overturn a court’s findings is to appeal to a higher court (where a right of appeal exists). Where an issue has been conceded or abandoned in litigation, it is generally not possible to reopen these issues through new litigation.

Applicability of foreign laws

In what circumstances will the courts apply foreign laws to determine issues being litigated before them?

The courts generally recognise an express choice of governing law in civil and commercial contracts between parties in EU member states pursuant to Regulation (EC) No. 593/2008 on the law applicable to contractual obligations. In the case of non-EU member states, the courts will recognise a choice of law under common-law rules, subject to the following qualifications:

  • the court may apply overriding mandatory provisions of Irish law (for example, statutory employment-law rights under the Irish unfair dismissals legislation); and
  • the application of foreign legal provisions may be refused if the application is manifestly incompatible with Irish public policy.
Initial steps

What initial steps should a claimant consider to ensure that any eventual judgment is satisfied? Can a defendant take steps to make themselves ‘judgment proof’?

A claimant should consider whether a defendant will have sufficient means or assets to satisfy any judgment made against the defendant. Certain practical steps can be taken in this regard where the defendant is an Irish company, such as conducting a search at the Irish Companies Registration Office to ascertain if the company remains active as a going concern, or commissioning a judgment search to determine if there are any other outstanding judgments registered against the relevant entity.

There are various mechanisms available to ensure satisfaction of a judgment, including instalment orders, recourse to the sheriff or county registrar for the seizure of assets or registration of a judgment mortgage against the defendant’s property. Ultimately, the defendant could be rendered bankrupt for failure to satisfy a judgment.

Freezing assets

When is it appropriate for a claimant to consider obtaining an order freezing a defendant’s assets? What are the preconditions and other considerations?

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. The standard of proof required to obtain such an injunction is high and, by way of summary and in addition to the risk of dissipation, the applicant must prove that they have a prima facie cause of action and that the balance of convenience is in favour of granting the injunction. 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).

Pre-action conduct requirements

Are there requirements for pre-action conduct and what are the consequences of non-compliance?

While they are under no obligation to do so, solicitors usually (as a protective measure in relation to future costs applications) send a warning letter to the defendant before initiating legal action. If there is more than one potential defendant, an ‘O’Byrne letter’ is usually sent, which calls on the potential defendants to admit liability and states that, if no liability is admitted, each will be sued and the letter will be relied on in resisting an application for costs by any party found not liable. In personal injury actions, if the claimant does not notify the alleged wrongdoer or wrongdoers in writing of the wrong alleged to have been committed within two months of the cause of action accruing, the court may take this failure into account when adjudicating on costs. Under the Mediation Act 2017, practitioners must advise clients of the possibility of mediation prior to initiating an action, and must complete a declaration to that effect.

Other interim relief

What other forms of interim relief can be sought?

Although rare, an order can be granted that allows the claimant to access documentation belonging to the defendant and to remove identified items. This is known as an Anton Piller order, and it helps prevent the defendant from destroying evidence pending the trial of the action, by allowing premises to be searched and evidence to be seized.

Alternative dispute resolution

Does the court require or expect parties to engage in ADR at the pre-action stage or later in the case? What are the consequences of failing to engage in ADR at these stages?

The Commercial Court has discretion to adjourn a case of its own volition or on the application of the parties for up to 28 days to enable the parties to consider using mediation, conciliation and arbitration. The court can extend the adjournment if the parties decide to refer the proceedings to one of these regimes. Under Order 56A of the Rules of the Superior Courts (RSC), similar rules apply to all High Court proceedings, which can now be adjourned to allow the parties to engage in mediation or conciliation. Under these rules, costs sanctions may be imposed for not availing of mediation or conciliation, unless there is a good reason. Under the Mediation Act 2017, there is an obligation on solicitors to advise clients of the option of mediation, and to outline the potential benefits and drawbacks of the process.

Claims against natural persons versus corporations

Are there different considerations for claims against natural persons as opposed to corporations?

Claims awarded against natural persons are generally liable to be satisfied from personal assets (unless covered by valid insurance). In certain instances, additional protections can be afforded to natural persons, such as personal insolvency measures and protections specific to the family home.

Claims awarded against corporate entities are liable to be discharged from the assets of the company.

Corporate entities generally avail the benefit of limited liability to protect the personal assets of directors and shareholders. In general, the courts are less sympathetic towards corporate defendants than natural persons where a corporate defendant has the benefit of limited liability.

In terms of effecting the service of proceedings, a natural person must be served personally where he or she has not authorised a firm of solicitors to accept service on his or her behalf. In contrast, a corporate entity may be served by delivering proceedings to the registered office of the company.

Class actions

Are any of the considerations different for class actions, multi-party or group litigations?

There is no specific Irish legislative provision dealing with class actions or multiparty litigation. The closest procedures are representative actions and test cases. There are limitations with representative actions. For example, damages cannot be awarded and there are specific rules requiring the members of the class to have substantially the same interest. The preferred option is the test case, which arises where there are numerous separate claims arising from the same circumstances. The first case is the test case as it effectively becomes the benchmark by which the remaining cases are resolved. Although technically the subsequent claimants and defendants are not bound by the result (not being parties to the original litigation), the test case has an effect by virtue of the doctrine of precedent. Therefore, the benefits of the original ruling may be extended to cases involving factual situations identical to those of the test case. Subsequent litigation is often settled on the outcome of the test case. The Law Reform Commission published a report in 2005 on multiparty litigation, recommending a formal opt-in procedural structure be put in place to deal with multiparty litigation. To date, the recommendation has not been implemented.

On 11 June 2013, the European Commission published a recommendation calling on all member states to adopt collective redress systems for both injunctive and compensatory relief. Although member states are encouraged to implement the principles set out in the regulations, the recommendation is not binding. The recommendation deals with ‘mass harm situations’ whereby two or more persons (natural or legal) claim to have suffered harm from the same illegal activity carried out by another person (natural or legal) in breach of EU rights. The recommendation, which will likely form the basis for future implementing legislation, addresses a number of issues in collective redress, including: standing to bring a representative action; funding; cross-border disputes; ADR; damages; and legal costs and lawyer fees.

Third-party funding

What restrictions are there on third parties funding the costs of the litigation or agreeing to pay adverse costs?

Litigation is usually funded by the individual parties, but the unsuccessful party is typically ordered to pay the successful party’s costs. There is no explicit statutory basis for third-party funding (TPF) in Ireland and TPF is generally prohibited by the common-law principles of maintenance and champerty, which prohibit financial assistance to a party to litigation by a person who has neither an interest in the litigation, nor any legally recognised motive justifying interference.

In the case of Persona Digital Telephony Limited & anor v The Minister for Public Enterprise Ireland & ors [2017] IESC 27, the Supreme Court upheld the centuries-old prohibition on litigation funding by a third party without a legitimate interest.

However, the Irish courts have also recently accepted that after-the-event insurance may be allowed.