Addressing Ireland's Legal Bill
Today’s announcement that NAMA’s legal costs incurred in 2010 and 2011 amounted to €27.5 million is unlikely to sit easily in the public conscience. NAMA’s requirement for appropriate legal advice in relation to due diligence on loans is understandable, the level of legal fees however, may cause concern.
In her address to the FLAC Annual Dave Ellis Memorial Lecture on 1 December 2011, Baroness Nuala O’Loan spoke of the dichotomy between the mechanisms for the application of the law and the assertion of the rights of the individual (see Full Address). O’Loan raises the question of access to justice in the context of rights which are ‘justiciable’ and which need to be asserted in the courts, and of the alternatives to courts, and ways in which disputes and legal problems can be avoided:
‘When disputes do occur could more money be put into mediation systems? Obviously the word “mediation” has many meanings to different people. Different forms of mediation, some more formal such as mediative processes for commercial disputes, [and] some less formal may help. The evidence from the Irish mediators is that on average resolving a €200,000 dispute costs €7,000 as opposed to €53,000 in the courts… Legal issues will still have to be tackled in the course of mediation, and such work will demand more of lawyers in some ways but mediation can provide a better result on many occasions, with success rates of up to 70%.
‘Right across the justice system, in virtually every country in the world, there are problems of access and cost. What has happened in the past is no longer sustainable. There are alternative ways of dealing with disputes. They will require changes to traditional working practices, but this would make the response to the citizen faced with a dispute more accessible, and ultimately would undoubtedly have the direct effect of making mechanisms for enabling justice both more effective and more efficient. Ireland spends some €500m each year on legal costs and services. The challenge must be to take that sum and to spend it in a more cost effective way so as to make justice more accessible to more people.’
Mediation is not a panacea, but, as noted by Karen Erwin, President of the MII, in her annual address to the MII Annual Conference in November 2011, research shows that incorporating mediation in dispute resolution processes results in significant cost and time savings.
Drawing on statistics from a report commissioned by the European Parliament’s Committee on Legal Affairs, ‘Quantifying the cost of not using mediation – a data analysis’, Ms Erwin noted the results of the survey of legal experts in 26 member states of the EU firmly established the benefits of using a two-step dispute approach – mediation first and then court if the mediation is unsuccessful – rather than going straight to court:
‘They found that, in terms of time in Belgium, if the mediations were successful in more than 9% of cases there was a saving of time spent in resolving the dispute. The higher the success rate of the mediation the greater the time saving. In Italy the breaking point on time was only 4%, so if more than 4% of mediations were successful there was a time saving in dispute resolution. The more successful the % of mediations the greater the time savings…
‘Indeed if the [Irish] State as party to between 40 – 50 % of civil litigation was to adopt an alternative dispute resolution pledge or commitment, it would make a marked difference to the dispute resolution landscape.’
An ADR pledge from Government, as called by the Law Reform Commission, under which Government Departments and State bodies would be required to consider and attempt mediation or conciliation in appropriate cases before initiating court proceedings, would undoubtedly deliver significant savings to our pubic purse.
