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The Paper of Record

One of Ireland’s newspapers reputedly aspires to be the Paper of Record. To be serious on the point it ought to have this vainglorious claim beneath its masthead; it does’nt, correctly.

It cannot be such, because of its necessarily accepted constraints. A true Paper of Record would explain. No Irish newspaper explains. They cannot, because to explain is to judge. To judge is, often, to defame. No average newspaper (in Britain or Ireland) can defame persistently and survive.

What the Paper of Record needs is a lexicon of terms which are inaccurately defined, like “cute hoor”. (Click HERE to read its inadequate definition).

Let us insist that it is flattering to say of the Pope, say, that he is a cute hoor. (He is not). We would be free then, with such a lexicon, to say what we think of our public servants; especially those who are Secretaries General of Government Departments, or those who, against reason, are trumpeted (often by themselves) as “independent” in filling some regulatory role or other.

This policy would have drawbacks; immigrants to Ireland would have to learn the conventional meaning of terms and then the real meaning. (It would be important to ensure they cannot sit on juries until they are fully inducted into Irish life. We have no problems with burkas; just meanings). (What would be the run of conversation between an Examiner and an immigrant qualifying for jury duty?).

The policy may have other drawbacks; what if the immigrants don’t know when to stop?

They might start referring to Mr. So-and-so as “a popular barrister in the Law Library”; or Judge So-and-so as “respected”. These terms have, in fact, meanings which are the reverse of their ostensible meaning.

Hmm.

The Paper of Record is written like this.

What is it really saying?

3rd Parties and Insurance Cover

Homer nodded; the “press release” from Bill Prasifka was in fact the Financial Services Ombudsman’s Annual Report for 2009.

Bill took the job in 2010, so he’s looking back to the long lost past.

Surprisingly for him (he’s self confident and apparently not self satisfied) he made no remark about the following in the report:

“In two instances the compensation awarded is being paid over a period of time in instalments as the providers’ professional indemnity insurance would not pay up the amounts in question – €50,000 and €15,000 respectively. In two other instances where High Court appeals went in the Ombudsman’s favour the provider concerned stated that it may not be able to pay the €60,000 awarded as it had no funds. Where large awards had been made and are under appeal to the High Court – €500,000, €700,000 and €100,000 – the professional indemnity insurer of the providers has indicated that it will not be willing to pay up that award if the appeal is unsuccessful.”

Subject to clarification as to the reasons for refusal of indemnity (Bill seems to be implying that the insurers are refusing payment to HIM. Well, yes they would. Because we in Ireland do not have UK legislation to allow injured third parties claim benefits of a policy taken out by a wrongdoer.

Will Bill mention this to Mathew Elderfield and Professor Holohan? Will they write a letter to the Taoiseach seeking urgent legislation to remedy the situation? Will the Taoiseach act? Will he, feck!

Trouble

Any solicitor should reasonably be glum now. No office will escape the consequences of Ireland’s financial troubles and, ignoring runes, we need only read the recent record of our neighbour, the UK, to see what those consequences might be.

Let’s start with the straightforward stuff; Thomas McGoldrick, a solicitor, stole £1.25 million from a client left paralysed (from the neck down) by a traffic accident. The judge sentenced him to ten years in jail. McGoldrick’s firm acted for the client in his personal injury action. McGoldrick met the client once and when the compensation was lodged in the client account McGoldrick treated it as his own, driving a Mercedes and Jaguar with personalised number plates and sending his children to expensive prep schools.

In the UK, as in Ireland, theft like this is, effectively, a charge on all solicitors; the Law Society Compensation Fund has to make good the loss.

Any normal person might go off the rails on hearing news like this. Take Esther Cunningham for example. She was defending her cousin on a dangerous dog prosecution but had to be escorted from court after kissing a solicitor, swearing at an usher and insulting the prosecutor while “fortified” with brandy. To her credit her legal representative said of her; “The forcible kissing of a solicitor is something that has been difficult to accept”. Who, among her colleagues, would not agree?

Distraction, even while remaining on the rails, so to speak, could also be easily foreseen following on such troubles. Consider how readily a solicitor, raffling a house, could forget to get a licence to run a lottery. The then-President of the Law Society , Paul Marsh warned his colleagues against launching prize draws because he feared that, as the recession deepened and house prices continued to fall, more people might be tempted to establish prize draws. He also feared that they could be used to conduct mortgage fraud or for money laundering. He pointed out that anyone found guilty of running an unlawful lottery faces a maximum sentence of 51 weeks in prison and/or a fine of up to £5,000 under the Gambling Act 2005.

One wonders whether Mr. Marsh was not himself distracted. Did he not know what many of his members were then doing? They were bribing people to get work for their firms.
A report described the practice in relation to the “miners’ scandal” in these terms;

“…some law firms charged fees to the miners out of their compensation awards. This “success fee” was often charged on the ground that the miner had been introduced to the solicitor by a claims handling company or trade union that had charged the solicitor to send the case to them.”

Bribing middlemen for work is the first step to full-time, big-time bribery. Get a scruffy office in Tottenham and become a bagman for Halliburton, delivering £100 million in bribes to Nigerian politicians. That’s a business model any Irish property developer would cheerfully take up. In this case it was a solicitor.

Strictly, as a business model it lacks something; the bribes are going in the wrong direction. Christopher Haan, a consultant solicitor knew that. Despite charging his client, Mr Abela £1.4 million in legal fees (on a share purchase), Mr Haan was clandestinely also advising a Mr Baadarani, who was selling his stake in the Italian company to Mr Abela. Mr. Haan got £400,000 from Mr. Baadarani.
“This is not a case of a technical conflict of interest,” Mr Abela’s, counsel told the court, “but of an intentional preferment of one client’s interests over another.”
Mr Haan’s actions, he said, were negligent, deceitful and a breach of contract towards Mr Abela, adding that simultaneously advising the buyer and seller of a company implied fraudulent or negligent misrepresentation.
Mr. Haan may have known what Mr. Seldon, another solicitor, did not know; that you can be pushed into retirement against your will (and will need every cent you can get).

Or, powerful vested interests lodge a complaint with your Regulator and, despite their tendentious objectives (the complainants were the opponents of the solicitor’s clients) you just survive the trial your Regulator puts you through.

Here in Ireland, being a Republic we, in theory, are no respecters of persons. Oops! Not so, perhaps.

In any event Michael Ford a client of Michael Napier, a former President of the Law Society lodged a complaint with the Law Society about Napier. Napier had represented Ford in a long case against Exxon Mobil, but Ford discovered that Napier’s firm had also been acting for Esso, a wholly owned subsidiary of Exxon.

Ford was not pleased about this. How could he now know that Napier did everything he could to vindicate his interests?

The complaint went nowhere fast. Only when it went to the Scottish Legal Complaints Commission did Ford get a hearing. The Commission found that the Law Society’s investigation was a systemic failure.

Too bad.

In search of Dublin’s Water Policy

This post could be entitled “water”. It is prompted by the proposal of Michael Phillips the Dublin City Engineer, that water be piped from the river Shannon to Dublin city.

I have not heard the reason why this “solution” is necessary. What, in fact, is the problem?

Let’s start with an Irish Times report seen HERE. We should also refer to a paper by Mr. Phillips himself, seen HERE.

The Irish Times report is of value; it has some figures in it about water in Dublin city and elsewhere, but one figure is missing (and missing from Mr. Phillips’ paper also); the maximum recoverable rainfall in the Dublin region.

Where is the full assessment of the problem?

The issue is not without its comedy; here is the Irish Times quoting Mr. Phillips;

“Dublin city engineer Michael Phillips said the implication of the report is that water would fall more copiously in places where it was not needed.”

Or, HERE is another media report, implying brain damage in the reporter; (sub-editors have that effect).

There can be only one (or two) reasons why Dublin city might source its water from the Shannon river; we do not have enough water in the Dublin region or the cost of collecting it exceeds the cost of the pipe from Dublin to the Shannon.

Mr. Phillips is not without his own resources; his full case can be seen HERE.
The difficulty with his view is his definition of “current water sources”. They are his treatment plants. In short, we do not suffer from a shortage of water; we suffer from a shortage of water treatment plants.

Of course we also suffer from inefficiently functioning distribution networks, as we see from the Irish Times report.

The Government solution to this crisis is the metering of water, a solution way below the level of “policy”

We are still left with a question.

Who makes water policy and why?

PROOF OF LOSS

Proving a loss of profit is a common event in “business interruption” insurance. It will also arise as part of a claim against a wrongdoer where the damage complained of has closed or stymied the business.

However, it is not immediately obvious what the method of calculation should be. The claim is, inherently, speculative. The loss is the profit which would have been generated but for the wrongful act. The turnover for a prior relevant period would be a start, but not conclusively so; what if the turnover was in sharp decline? (As has happened in banking and construction in Ireland recently). Of course the turnover may have been accelerating (as is the current position with the business of lawyers practising in the field of professional negligence).

It is necessary therefore to find the trend.

It is also necessary to remember that a reduction in turnover will not reflect exactly the reduction in profit; many overheads remain while the business limps on; in short, the profit reduction percentage will exceed the reduction in turnover expressed as a percentage.

The Financial Services Ombudsman

Bill Prasifka, the new Financial Services Ombudsman has started well, if we can properly understand recent newspaper reports. He seems to have issued some form of Press Release but it’s not on his website yet.

The reports credit him with underlining that he is limited in the amount of compensation he may award against the anonymous “regulated” financial services bodies (banks) he polices. (He does’nt really; he reacts to complaints).

Consequently, Bill awarded the maximum, €250,000, to a farming couple who lost much more than that.

The limit is set in regulation, as follows:

“The amount of 250,000 euro is prescribed by Council as the maximum amount of compensation payable in respect of all other complaints for the purposes of Section 57CI(5) and Section 57CI(4)(d) of the Central Bank Act 1942 (as amended by Section 16 of the Central Bank and Financial Services Authority Act of Ireland Act 2004).”

This is comedy. Bill is himself policed by a Council; they write the regulations. The Minister for Finance appoints them.

Who are they? I do not know, but we learned recently from the Irish Times HERE that stuff like this was actually being written by the banks.

See our earlier post on the Financial Services Ombudsman HERE at paragraphs 12 to 15

Contests

If the BP oil disaster in the Gulf of Mexico happened in Irish waters who would be held responsible?

The question is intentionally ambiguous. It seems to refer to a functioning “administration” which would search out culprits and assign blame and punishment. It seems also to refer to the principles by which blame and perhaps punishment would be assigned.

The first aspect might lead to a rant and should be avoided; it is the second aspect to which I refer, and even that can prove contentious. Consequently, I am invoking consideration of the civil law only.

We know that BP is the lead partner in the drilling of the oil well. We know that the partnership hired an oil drilling platform, and crew, from Transocean. It also engaged Halliburton, as engineers, to pump cement slurry into part of the oil well structures to contain oil.

If damage is caused to a third person during a BP-like operation in Ireland, that person would look to the law of negligence and nuisance to found a claim for compensation. The burden of proving negligence would lie on the injured person. It can be anticipated that the BP partnership would plead that it hired competent independent contractors and that, in standard Irish legal principles, it is not liable for damage caused by any negligence of those contractors.
The Plaintiff would, understandably, reject this. Some obligations cannot be delegated, particularly if they are risky. Drilling an oil well under the sea is risky, particularly at a depth of a mile.

The Plaintiff would still have to prove negligence. If the cause of the accident is to remain unknown, the Plaintiff might be in trouble. (In the BP incident, this is the significance of the admission Barack Obama extracted from BP; proof of negligence need not now be addressed by claimants in civil negligence claims against the BP partnership.)

In Ireland, there would be no admission of liability by a Defendant like BP. Faced by the formidable problems in proving liability in negligence, an Irish Plaintiff would look to the law of nuisance for success. Nuisance is a tort of strict liability. A Plaintiff does not need to prove “fault” to win. He simply needs to prove the source of the damage and that the Defendant was the source.

A leaking oil well is a public nuisance. If the oil damages the property of others the Defendant drilling the well is strictly liable.

Proof of loss from such a source would, itself, require to be sophisticated. Proving loss of profit is not easily done, but would be easy in comparison to the obstacles Plaintiffs commonly have to face in Ireland to hold powerful interests to account.

The Way We Are Now

1. NAMA was set up by the Government expressly for the purposes of paying the “long-term economic value” for bank assets.

2. “Long-term economic value” (“LTEV”) was a notion supplied to the Government by the Commission of the European Union. This writer cannot say from where the Commission derived it, but it is possible the Commission is not “wedded” to the notion, unlike the Irish Government.

3. In the context of the establishment of NAMA, it was insinuated that LTEV was, and is, in excess of current market value. Strictly, nobody can say what current market value of bank assets are; there has been no functioning market for them for some time and the Government has imposed a secrecy blanket on possible sources of information on the point.

4. Nonetheless, some assets have been assigned current market value; this happened in Irish High Court proceedings. Those values showed a 70%- 80% fall in the value of property-based bank assets.

5. The tranfer of bank assets to NAMA, therefore, was expressly in defiance of the actual value of those assets. The price to be paid was a political decision made before NAMA was established.

6. It is a lie, consequently, to say that the banks misled NAMA. It is the people of Ireland who have been misled.

Fraud Prevention (Whistleblowing “maxed”)

This blog has proposed a remedy for fraud of public funds in the past (see HERE for an instance).

We see a commendation in similar terms from Professor Donal Byard of New York in the Irish Times (HERE).

Now we need only await the usual sullen silence by way of response.

Hindsight again, Minister?

The musings by the Director of Public Prosecutions as reported HERE warrant a book written on them. He has pointed to the need for, and social value of whistleblowers.

This being a blog, a posting will have to suffice.

His musings were followed by a proposal from the Minister for Justice, the terms of which are currently obscure.

Assuming that there is no co-ordination between the Minister for Justice and the DPP, and assuming them to be decent, well-meaning office holders, why do these pronouncements appear as if the speaker was the first to address the problem?

The Labour Party tabled a Whistleblower’s Bill and it went nowhere. It was within the power of the Minister’s party to drive it, or to kill it. It was killed.

Transparency International has compiled a review of the lack of protection for whistleblowers in Ireland. See it HERE.

Transparency International recommend one single piece of legislation to protect (and promote) whistleblowing. As they point out, the UK did exactly that in 1998 with the Public Interest Disclosure Act. See it HERE
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Of particular interest to this blog (we are personal injury lawyers, albeit multi-tasking) are the provisions of Section 27 of the Safety Health and Welfare at Work Act 2005. See it HERE.

Now read the obligations imposed on employees HERE by Section 13 (h) of the Safety Health and Safety at Work Act 2005.

The DPP thinks that recourse to the Employment Appeals Tribunal is cold comfort for a dismissed employee whistleblower.

Surely the Government knew this in 2005, if the DPP can know it now?

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