Prior to January 12, 2004 commercial cases wended their way through the courts through an inordinately time consuming and expensive process. Support resonated for a Commercial Court from the Committee on Court Practice and Procedure in its 27th Interim Report and the Company Law Review Group among others. They acknowledged the need to establish a court to expeditiously resolve commercial disputes by implementing a new streamlined case management procedure utilising more active judicial involvement, alternative dispute resolution, and modern technology. On January 6, 2004, Michael McDowell, the Minister for Justice, Equality and Law Reform announced that he was pleased to sign into law “a very significant development of the Irish Courts system.” The creation of the Commercial List of the High Court pursuant to the Rules of the Superior Courts (RSC) Ord.63A (S.I. No. 2 of 2004) came into operation on January 12, 2004. All eligible cases commencing after that date were accepted onto the list, subject to the decision of the Judge of the Commercial List. Almost from its inception, it clearly made a difference in the speed by which cases were processed through the court system. Approximately 15 months after its establishment, Kelly J. in the Commercial List case, Mullholand v An Bord Pleanála , High Court (Kelly J.) June 14, 2005, noted that as of April 27, 2005, of the 77 cases admitted to the list, 50 of them had been completed and that the average time period from entry to the list until the date of the final order was 9 weeks. However, while practitioners readily acknowledge the speediness and efficiency inherent in its procedure, in my view the court still has its disadvantages. For practitioners, the effort involved in ensuring timely compliance with the procedural requirements can be quite onerous. For clients, a distinct disadvantage is the potentially staggering costs in upfront fees. Yet despite such disadvantages, it is important for practitioners who deal with commercial matters to become familiar with the court’s procedures. For those practitioners who do not generally deal with commercial matters, in my view they too should gain knowledge about the Commercial List as certain matters where the business aspect is less obvious may still find their way onto the Commercial List as a result of the wide latitude given to judges to accept cases under the rules. The purpose of this article is to cut through the air of mystery surrounding the Commercial Court by helping practitioners understand the court’s jurisdiction and the various relevant provisions in the Rules of the Superior Courts (RSC Ord.63A).
Scope of the Commercial Court’s jurisdiction
The Commercial Court has a jurisdictional limitation of €1 million, although it does in certain specific instances, hear claims of lesser value. Order 63A, r.1 of the RSC specifically provides that only those proceedings considered “Commercial Proceedings” may be entered onto the Commercial List. It then enumerates the claims considered “Commercial Proceedings.” Order 63A, r.1a (i)–(xi) includes tort and contract claims valued at €1 million or more arising out of business transactions relating to documents, contracts or business disputes, for example: the purchase or sale of commodities; the export or import of goods; the carriage of goods by land, sea, air or pipeline; the exploitation of natural resources including oil or gas; the provision of services excluding those which would fit under the ambit of a contract of employment; the operation of markets, exchanges in stocks or shares; and the construction of any vehicle, vessel or aircraft. Order 63A, r.1(c) deals with arbitration proceedings under the Arbitration Acts 1954–1998, valued at not less than €1 million. The jurisdictional limitation is not applicable to claims concerning intellectual property (RSC Ord.63A, r.1(d)), trademarks (RSC Ord.63A, r.1(e)) and passing off (RSC Ord.63A, r.1(f)). The court may also use its discretion to determine whether an appeal from, or application for judicial review of regulatory decisions is appropriate for entry onto the Commercial List under RSC Ord.63A, r.1(g) or it may, under RSC Ord.63A, r.1(b), allow the judge the discretion to enter a case on the Commercial List, where he or she considers it appropriate. The court has dealt with claims where jurisdiction was contested under both RSC Ord.63A, r.(1g), see Mulholland v An Bord Pleanála, High Court (Kelly J.), June 14, 2005, and (1b), see P.J. Carroll & Co Ltd v Minister for Health and Children Ireland , Supreme Court (Geoghegan J.), May 3, 2005.
RSC Ord.63Ar.1(b): the “catch-all” provision
While many claims clearly fit within the ambit of suitability for entry onto the Commercial List, RSC Ord.63A (1)(b) envisions a catch-all situation allowing the judge the discretion to enter a case on the Commercial List, where he or she considers it appropriate. This discretion under the rule was challenged in the Supreme Court in P.J. Carroll & Co Ltd v Minister for Health and Children Ireland , Supreme Court (Geoghegan J.), May 3, 2005. Although Geoghegan J., set aside the Commercial Court ruling rejecting a claim challenging the constitutionality of a statutory provision, he would not go so far as to state that any claim with a constitutional dimension would automatically be rejected from the Commercial List. He stressed that each matter turns on its own facts. He thus stated:
“But I see a difference between a case which is fundamentally a commercial case but where there may be tagged on as a last resort relief a challenge to the constitutionality of a statutory provision on the one hand and an action which from the beginning is fundamentally a constitutional action. It may be appropriate to enter the former in the commercial list but caution should be exercised in admitting the latter. It would seem to me that this case clearly falls within the latter category.”
See however, Mullholland , High Court (Kelly J.) June 14, 2005, where Kelly J. found that the applicants’ heavy reliance upon the P.J. Carroll rationale, in support of their argument that the matter was constitutional, and thus not commercial in nature was misplaced. Kelly J., not only distinguished the two cases on the basis that they were relying upon two different rules, but also determined that the observations of the P.J. Carroll court in dealing with the appropriateness of admission to the Commercial List should be considered “obiter dicta par excellence .”
Mulholland v An Bord Pleanála, High Court (Kelly J.), June 14, 2005
In this recent case, one of the notice parties moved to transfer a judicial review application pursuant to s.50 of the Planning and Development Act 2000 to the Commercial List. Applicants objected on the grounds that the claim was not commercial in nature because it challenged the decision of an administrative body. Although Kelly J. accepted that the proceedings were not commercial in the sense that they did not involve a private law dispute between two commercial entities, as set out in RSC Ord.63A, r.1(a), he noted that RSC Ord.63A, r.1(g) provides a special definition of commercial proceedings in which public law appeals or applications for judicial review may be considered commercial proceedings. Thus, the instant claim and any other involving a statutory appeal or judicial review under RSC Ord.63A, r.1(g) could be admitted to the list if it could be demonstrated that “…a commercial development or process or substantial sums of money whether by way or profit, investment, loan or interest are likely to be jeopardised if the case is not given a speedy hearing or is denied the case management procedures which are available in the commercial court.” He noted that the Rules Committee gave the judge a wide discretion to determine whether a business would be admitted to the list under RSC Ord.63A, r.1(g). Accordingly, in light of the evidence produced in the instant case, Kelly J. exercised his discretion to find that since the claim fell squarely within the parameters of the rule, it qualified for transfer to the Commercial List.
Entry onto the Commercial List
There is no automatic right of entry onto the Commercial List. An applicant must follow the procedure in RSC Ord.63A, r.4 for a case to be accepted. This procedure is more than ministerial in its requirements. For entry, either party may move on notice to the judge of the Commercial List. The rules provide for a broad time period in which the application may be made. In plenary proceedings, a motion for entry may be made at any time before the pleadings are closed. In summary proceedings or in any other proceedings to be heard on affidavit without pleadings, the motion for entry may be made before the completion of the filing of affidavits. However, it is common practice for entry to be sought very shortly after the proceedings have been issued. In contrast to the analogous High Court procedure in other claims, the Commercial Court requires that the solicitor for the applicant attach to the motion a certification that the proceedings are appropriate to be treated as Commercial proceedings within the meaning of RSC Ord.63A, r.1, that the claim is either one of those enumerated in RSC Ord.63A, r.1 (a, c–f), as discussed above, or it fits under the “catch-all rule” RSC Ord.63A, r.1b, or within the ambit of RSC Ord.63A, r.1g concerning appeals from or applications for judicial review. To make this certification, the solicitor must set out the relevant facts to demonstrate this. The motion is then heard, and if granted, the proceedings will be entered onto the Commercial List. The judge has the option of either fixing a date for an initial directions hearing or of treating the hearing of the motion as the initial directions hearing.
General pre-trial procedure rule
As is evident in this article, cases on the Commercial List are managed differently from other High Court cases. A major difference is in the power of the judge to control the course of pre- trial procedure. Order 63A, r.5 of the RSC is a general rule which empowers the judge, on his or her own motion, at any time after the hearing of the motion for entry onto the Commercial List, to give directions and make such orders, including the fixing of time limits “… as appears convenient for the determination of the proceedings in a manner which is just, expeditious and likely to minimise the costs of those proceedings.”
Initial directions hearing
Order 63A, r.6 of the RSC governs the initial directions hearing. At this hearing, the judge directs the manner in which the case is conducted. The overall purpose of empowering the judge to provide such initial directions is not only to expedite the matter, but also to narrow the issues and thus reduce the length of the trial, which in turn will have a “knock-on” effect as to costs. Order 63A, r.6(1) provides 13 different directions that the judge may give. He may, for example, direct that:
1. (a) formal pleadings be dispensed with and that the proceedings continue by way of statements of law or fact or by way of sworn affidavits with or without the necessity of oral evidence;
2. (b) any issues of fact or law to be determined in the proceedings be fixed;
3. (c) the proceedings be consolidated with another cause or matter pending in the High Court;
4. (d) the parties define the issues, including the exchange between the parties of memoranda for the purpose of clarifying such issues;
5. (e) any party be permitted to alter or amend his or her indorsement or pleadings;
6. (f) the delivery of interrogatories, or discovery or inspection of documents, the making of inquiries or taking of accounts, and the filing of lists of documents, either generally or with respect to specific matters;
7. (g) an expert witness consultation to identify the issues in respect of which they intend to give evidence and where possible to reach agreement on the evidence to be given;
8. (h) the exchange of documents or information between the parties.
Of particular note is that the parties may also move for an adjournment for a maximum of 28 days, to gain time to decide whether to refer the proceedings or issue to alternative dispute resolution through mediation, conciliation or arbitration. If the matter or issue is to be heard through alternative dispute resolution, the judge may then grant an extension of time for compliance with any rule or court order. Order 63A, r.6(2) of the RSC permits the judge to direct compliance with certain requests with respect to discovery and RSC Ord.63A, r.6(3) permits the judge to hear applications for interlocutory relief. From my point of view, in light of such strict timetabling requirements, compliance with certain directions under restricted time periods may be a source of undue pressure on practitioners, particularly since the court may, in its discretion refuse to accept adjournments on consent. For example, it is not uncommon for the court to direct that a statement of claim be delivered within two weeks, the defence two weeks thereafter, discovery to be agreed upon a short number of weeks later and the matter fixed for trial.
Case management conference
Generally, the initial directions timetable a case management conference. Order 63A, r.14 of the RSC provides for a case management conference chaired and regulated by the Judge and attended by the solicitors. If no direction for a conference is given, either party may apply to move on notice for a direction that a case management conference be held. The grounding affidavit must concisely set out the grounds upon which the relief is sought. Where the opposing party objects to the relief sought, a reply affidavit may be filed. The objective of the conference is to expedite the proceedings by ensuring that the proceedings are prepared for trial as expeditiously and cost-effectively as possible through the use of active judicial participation, and the setting of a timetable for the completion of the preparation of the case. Where a party fails to timely comply with a direction or order, the judge may penalise that party. Order 63A, rr.14(4)–(5) requires attendance at the conference by the solicitors appearing for each of the parties or, where the party is not represented, by the party himself. The judge may, if he or she considers it necessary or desirable, direct that the party attend the conference even if he or she is represented by a solicitor. This rule expressly puts the onus on each solicitor attending the conference to ensure that he or she has sufficient familiarity with the proceedings and authorisation by the party to deal with any matters that are likely to arise at the conference. Where a party is represented by counsel, he or she may attend the conference, but the attendance of only one of such counsel will be allowed in the taxation or fixing of costs. Order 63A, r.14(7) describes the purpose of the case management conference “… to ensure that the proceedings are prepared for trial in a manner which is just, expeditious and likely to minimise the costs of the proceedings…”. In keeping with its purpose, the rule further provides that the following be accomplished at the conference in advance of trial:
1. The issues whether as to fact or law must be defined as clearly, precisely and as concisely, as possible.
2. All pleadings, affidavits and statements of issue must be served.
3. The service and delivery of any applications by letter for particulars and replies, any admissions or requests for admissions, notices to admit documents or facts and replies, and any affidavits made in pursuance of any notices to admit facts or documents must be served and delivered.
4. All intended applications for interlocutory relief must be made, and
5. Compliance with any directions given or orders must be made at the initial directions hearing, or in the course of the conference.
To narrow the issues to be tried prior to the Case Management Conference, RSC Ord.63, rr.14(9)–(12) requires that the applicant prepare the Case Booklet in consultation with the other party, to be lodged with the Registrar and served on the other party or parties not later than four clear days prior to the first date fixed for the case management conference. The judge may direct that the booklet take electronic form and be lodged or served by electronic means. If necessary, the party preparing the booklet shall consult with the other party to revise or add to its contents.
The judge chairing the case management conference most importantly fixes a timetable for the completion of preparation of the case for trial. The parties may, at their option, determine a proposed timetable, which may be accepted by the reasonable approval of the judge. Under RSC Ord.63A, r.15 (c–e), if a party fails to timely comply with a direction or order, the judge may penalise that party. Where there is undue delay, or the judge is dissatisfied with the conduct of the proceedings, the judge may require the party or his solicitor to appear and explain the delay or other unsatisfactory conduct and may thereupon make or give an appropriate ruling or direction to expedite the proceedings or deal with the conduct. The judge may also disallow costs if the pleadings are unduly lengthy or contain unnecessary matter. He may also disallow costs if any party fails to comply with a time limit through delay or default and award against that party the costs thereby occasioned by the other party.
Preparation for trial
In contrast to other High Court actions, RSC Ord.63A, rr.16–21 requires the attendance by counsel and solicitors at a mandatory pre-trial conference prior to hearing. The conference date may be scheduled by direction of the judge chairing the case management conference once all orders have been made and/or directions have been complied with. Four days before the conference, each party, in consultation with their respective counsel, must complete a questionnaire (Form No. 3 in Appendix X to the RSC). The judge actively manages the pre-trial process at the conference by making appropriate orders or directions concerning issues such as the potential trial length, arrangements for witnesses such as video-conferencing.
Unless the judge chairing the pre-trial conference otherwise directs, the plaintiff, applicant or other party prosecuting the proceedings must consult with the other party to prepare and lodge a trial booklet with the Registrar, not less than four clear days prior to the date fixed for the trial. The trial booklet must be indexed and in chronological sequence, and contain copies of all uncontested documents or extracts, including pleadings, affidavits, and statements of issues and any statements, correspondence and any other documents intended to be relied upon at the trial, and a case summary, comprising an undisputed case outline, sequence of relevant events and issues, a list of persons principally involved in the subject of the proceedings and if appropriate, a glossary of technical terms. The judge chairing the pre-trial conference may request that the parties consult with each other to agree upon a list of the documents or extracts they intend to rely upon at the trial. However, if the parties cannot agree, unless the chairing judge orders otherwise, the plaintiff, applicant or other party prosecuting the proceedings must notify the Registrar and thereafter proceed as if the request by the judge had not been made.
Order 63A, r.22 of the RSC, has in essence removed the threat of a “trial by ambush” from Commercial Court practice, as the parties need no longer be surprised at trial by the oral testimony of a fact or expert witness. Under the rule, the judge may require, at his or her option that the parties produce, prior to trial, a written statement signed and dated by the expert or fact witness outlining the essential elements of the evidence in the oral testimony that the witness plans to give at trial. In exceptional circumstances, the judge may, upon hearing all parties, direct that the written statement be treated as the evidence in chief of the witness concerned but only after it the witness has verified it on oath.
A judge may allow a witness to give evidence through a live video link or by other means pursuant to RSC Ord.63A, r.23. The state of the art Commercial Court premises on Bowe Street, Dublin are adapted to allow such facilities.
Alternative dispute resolution
A significant development in the management of commercial cases is that the parties are given an incentive to resolve matters without the costs and stresses of trial through alternative dispute resolution (ADR), a less costly means of dealing with cases or issues. Accordingly, if the parties believe that either the proceedings as a whole or any issue within them would benefit from some form of alternative dispute resolution, such as mediation, conciliation or arbitration, the judge may adjourn the proceedings for up to 28 days to enable the parties to avail of one of these processes. The benefits of alternative dispute resolution are already evident to me as a practicing solicitor. I was involved in an action referred to mediation by Mr Justice Kelly that was successfully resolved. However, in my view a successful outcome depends very much on the parties involved. It may very well be the case that the reason the parties are before the court is because all previous discussions have proved fruitless. In such circumstances, ADR may simply not be a viable option. In effect, it would increase the already escalating costs as opposed to saving them. It will be interesting to see if the referral of cases in such a manner by the judge of the Commercial List is the beginning of a trend.
Cases on the Commercial List include those complex cases including tort and contract claims valued at €1 million or more arising out of business transactions relating to documents, contracts or business disputes, and cases valued at €1 million or more falling under the Arbitration Acts and those matters where the jurisdictional limitation is inapplicable, such as trademark and patent law cases. The Rules Committee also invested a wide discretion in the judge when it established the “catch-all” section permitting the judge to use his or her discretion to determine whether the case can be placed on the list. Once a case is accepted onto the Commercial List, it is efficiently processed through the procedure which encourages judicial regulation and control from the time of the initial directions hearing to the pre-trial process which includes two judicially regulated conferences: a case management conference and a pre-trial conference. The parties must follow a timetable regulating among other things the conduct of discovery and the making of pre-trial motions. At the conferences, the parties’ are focused exclusively on an outline of the case, agreeing the uncontested issues, and narrowing the contested issues and the taking of statements of witnesses whose oral testimony is to be heard at trial. All of these and more serve to shorten not only the pre-trial process, but also the trial length. Encouraging alternative dispute resolution through case management is new in Ireland but also serves to take potentially resolvable cases out of the system. The Commercial Court is the most modern of courts and under the rules is also set up to deal with technology, see RSC Ord.63A, r.31 (1)–(3): “electronic service, exchange and lodgement.”
Clearly, the Commercial Court expeditiously processes complex commercial cases through the system and there are enormous advantages in this regard. High Court cases still may take three years to come to trial while Commercial Court cases are often tried within three months. However, there are certain disadvantages both to the solicitor and the client in the Commercial Court. The solicitor must deal with the enormous burden of compliance with the rules in the initial directions given, the directions given at the case management and pre-trial conferences, and all other court orders. It is thus unlikely that a sole practitioner could run a case in this court where his or her case could conceivably take up all of his or her time for a period of approximately nine weeks. It is suggested that solicitors running a Commercial Court case ensure that they have appropriate systems and support in place. The obvious disadvantage to clients is financial—he or she would have to be able to afford substantial upfront fees. However, on balance, although the Commercial Court procedure would not suit every High Court case, in my opinion the Commercial Court is a welcome forum for complex commercial matters.
This article was first published in the Journal of Civil Procedure published by Thomson Round Hall