By Aoife Walsh, Solicitor, Commercial Litigation and Dispute Resolution Unit
Just over six years ago on 12th January, 2004 the Commercial Court was established with the objective of expediting business disputes with a value of in excess of one million euro. The benefits were seen almost immediately. Within fifteen months of its establishment, of the 77 cases which had been admitted to the list, 50 had been disposed of. The average time period from entry to the list, to the date of the final order being granted was nine weeks.
The downturn in the economy has seen an exponential rise in the number of cases which have been entered in the commercial list of the High Court. The most recent statistics available indicate that in 2008, 243 cases were admitted to the list and it is expected that this figure will have significantly increased during 2009. The growth in the caseload before the Commercial Court has lead to discussions regarding a possible increase in the monetary threshold for entry into the list, to €2.5 million.
Recent high profile cases coming before the Commercial Court include the applications made by ACC Bank against Liam Carroll’s Zoe Developments building group and the court is also currently dealing with a number of cases arising from the role played by the convicted fraudster Bernard Madoff in respect of two Irish investment funds.
The most obvious advantage of seeking to have a dispute dealt with by the Commercial Court is the time period in which the dispute is likely to be disposed of. In traditional litigation it can take a number of years before a matter is heard by the court, however, the average time period before the Commercial Court is currently approximately 21 weeks.
The Commercial Court efficiently manages the running of the proceedings themselves prior to the hearing. This minimises costs and the matter is heard by the court at the earliest possible opportunity. In particular, once a case is successfully entered into the commercial list the judge will hold what is known as an ‘Initial Directions Hearing’ at which a timescale for the delivery of pleadings, for discovery and for the delivery of witness statements and expert reports, will be directed by the court. The deadlines imposed by the court are strictly enforced, delays are not tolerated and the parties can be penalised as to costs if they do not comply with the court’s directions. In addition, the manner in which the court manages a case means that issues of dispute between the parties are narrowed down at a very early stage in the proceedings. This has also meant that disputes are being settled more frequently as between the parties, before significant costs have been incurred. The most recent statistics show that of 205 cases disposed of by the court in 2008, 74 of those were settled prior to the hearing date and a further 31 were settled at the hearing itself.
The rules governing the Commercial Court also provide that the court may, either on its own motion or on the application of any party to a dispute, adjourn any dispute before it for up to 28 days to facilitate the parties engaging in alternative dispute resolution. In particular, the court has promoted the resolution of disputes by ‘mediation’ and the statistics show that where the parties themselves remove the dispute from the Commercial Court list in order to engage in mediation, such disputes are settled in approximately 85% of cases.
There is a perception that the costs incurred in pursuing a case through the Commercial Court are greater than those that would be incurred via the traditional litigation route. While it is the case that costs are incurred at an earlier stage in Commercial Court proceedings, it is generally accepted that the overall costs are not greater than would be incurred in the matter reaching hearing in the normal course of a High Court action.
The entry of a case into the commercial list is ultimately at the discretion of the court. The rules of court state that an application can be made at any time before pleadings in the case are closed. In practice, it is advisable to bring an application for entry into the commercial list at the earliest possible opportunity after the proceedings have been issued to avoid the court declining to enter the matter into the list as a result of ‘delay’. However, having regard to the strict time limits imposed by the court in managing a case in the commercial list, it is imperative that a party ensures that it is in a position to comply with such strict timescales prior to making an application to have a matter entered into the list.
For more information on the Commercial Court and commercial disputes contact our Commercial Litigation and Dispute Resolution Unit.
The Commercial Court deals with matters within an average of 21 weeks.
Approximately half of all cases before the Commercial Court settle before a contested hearing takes place.
An application to enter a case into the commercial list must be made before pleadings in the case are closed.