"A limited company must be represented by a lawyer in a court case"

Brendan Burgess

Brendan Burgess

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In the [broken link removed] yesterday, the MD of Scotchstone Capital tried to represent the company in an action against the state. He was barred from doing so and told he must get a lawyer, although he had been quoted €850k for the cost of the case and no lawyer would do it on a success only basis.

Patrick McCann SC, for the Minister, said it appeared Scotchstone, while suffering an unrealised loss of €200,000, still had funds in securities of some €100,000 and it could hire lawyers if it “cut its cloth to suit its measure”. The law here clearly provided a company must be represented by a lawyer and cannot be represented by a managing director, shareholder or other officer of the company, he submitted.


Mr Justice Feeney said he was bound by a Supreme Court decision of 1968 (the Battle case) which found a limited company could not be represented in court proceedings by an officer of that company. The claim of inability-to- pay-lawyers did not constitute a rare and exceptional circumstance allowing Mr Skoczylas to represent the company, he added.
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This is crazy and needs to be changed, even if it requires a referendum.

Brendan
 
Personally, I would require much more detail before I formed an opinion. I note the use of the word "claim" in the sentence "The claim of inability-to- pay-lawyers". It is a claim I find strange. I can't understand why, in the middle of a recession when the legal professional is suffering so badly that nobody can do the work for less than €850K. Patrick McCann SC seemingly also thinks so too. It could hire lawyers if it “cut its cloth to suit its measure”. Based on the above I would tend to agree with the judge.
 
Hi One

I don't think that the cost should be a factor.

I was the director of a company and would love to have been able to take court action against debtors to recover monies due, but I had to use a solicitor. The legal costs above the scale costs often used up most of the proceeds of the debt collection.
 
Companies are separate legal persons.

That's the nub of the issue.

Non-lawyers do not have any right of audience in our courts, ie make representations/pleadings on behalf of another to a court. That is the job of a lawyer.

Makes a lot of sense.
 
Hi Brendan,

It is not just the costs that I am basing my point on, but rather the extremely high cost quoted. I have no other information available to me other than that in your post. On face value, I have to agree with the SC. I also think the point that McCrack makes is 100% correct, and it is a point that is so strong that I don't think there is any valid counter argument to be made against it.

But I certainly do understand your frustration about debt collection, and the difficulties involved in that.
 
McCrack said:
Companies are separate legal persons.

That's the nub of the issue.

Non-lawyers do not have any right of audience in our courts, ie make representations/pleadings on behalf of another to a court. That is the job of a lawyer.

Makes a lot of sense.
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For all other purposes (which include matters of legal import, such as contracts to purchase real property, or the filing of tax returns) the officers of the company act for the company with full legal capacity. It isn't really consistent to rule that for some purposes the officers are the company and for other purposes they are not.

You could have the odd situation where I might sue a company. For the purposes of bringing the matter to court, I give notice to the company secretary at the registered office of the company. But the company secretary cannot act in person on that notice, and attend the court to answer the case.
 
There should never be a situation where a citizen cannot represent their own interests in court.
This is a good example of why the legal industry needs to be reformed and properly regulated.
 
McCrack said:
Companies are separate legal persons.

That's the nub of the issue.

Non-lawyers do not have any right of audience in our courts, ie make representations/pleadings on behalf of another to a court. That is the job of a lawyer.

Makes a lot of sense.
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The courts do allows litigants in person all the time. They don't like but they must allow it. A LIP enjoys the same rights of audience as a lawyer.
 
Time said:
The courts do allows litigants in person all the time. They don't like but they must allow it. A LIP enjoys the same rights of audience as a lawyer.
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Yes, that is not applicable here however. Like I have said a company is a separate legal person in law. It's one of the great benefits people get for setting up a business and incorporating it.

People need to isolate the concept that officers of a company file tax returns, sign contracts etc but they do so as authorised agents only.

The only option to get around this and the Supreme Court has said this is for the MD/shareholders to personally put the company in funds for the purposes of presenting a defence.

In criminal proceedings however (where a criminal action is taken against a company) a representative may appear and the Companies Act expressly provide for this. Such a person may answer Q's, enter a plea on the company's behalf.
 
McCrack said:
...
People need to isolate the concept that officers of a company file tax returns, sign contracts etc but they do so as authorised agents only....
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Their capacity may be similar to agency, but on what basis do you say it is actually agency?

I would be interested to see how a judge might act if all the shareholders in a company came to court (which is feasible for small companies) and took the position "we are the company".
 
It would fall on deaf ears.

The company is a legal person separate from its shareholders, directors, servants and agents.
 
Time said:
It would fall on deaf ears.

The company is a legal person separate from its shareholders, directors, servants and agents.
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That still doesn't explain why a lawyer needs to act for the company. Someone in the company makes the decision as to which lawyer will act for said company. Why can't that person or those persons decide that one of the shareholders can act for the company?
 
Simply, a person can represent themselves. A company is a person. A company cannot physically represent itself. Therefore a lawyer is needed.
 
I could understand and see good justification if a Director/ Officer of the company was compelled to be at least involved in representing the Company.
 
One said
it is a point that is so strong that I don't think there is any valid counter argument to be made against it.
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Here is a valid counter argument...


Padraigb said:
For all other purposes (which include matters of legal import, such as contracts to purchase real property, or the filing of tax returns) the officers of the company act for the company with full legal capacity. It isn't really consistent to rule that for some purposes the officers are the company and for other purposes they are not.
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I have to say that I cannot think of a valid argument why a company is obliged to use a lawyer in court other than the enrichment of the legal profession.
 
Brendan Burgess said:
One said

Here is a valid counter argument...




I have to say that I cannot think of a valid argument why a company is obliged to use a lawyer in court other than the enrichment of the legal profession.
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I and others have already said why it is the case.

Do you understand and appreciate why without resorting to cynicism?

I might as well be flogging a dead horse here with some people.
 
Padraigb said:
For all other purposes (which include matters of legal import, such as contracts to purchase real property, or the filing of tax returns) the officers of the company act for the company with full legal capacity. It isn't really consistent to rule that for some purposes the officers are the company and for other purposes they are not.
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But and with no disrespect, this point is not persuasive. Regarding contracts prepared for the purchase of real property, the officers of the company sign the documentation prepared for them by solicitors. They only act with full legal capacity in specific instances.

With regard to the statement "It isn't really consistent to rule that for some purposes the officers are the company and for other purposes they are not" I say that for no purposes are the officers the company. The officers are only ever part of the company. There is a difference between the officers and the company itself.
 
McCrack said:
I might as well be flogging a dead horse here with some people.
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Not sure what the dead horse is.

Some of us are trying to drag a legal profession dead horse from the 18th century into the 21st century which just does not want to change its practices and policies and is supported by some of our outdated laws and ideas. As the Supreme Court has upheld this nonsense, then the underlying constitution needs to be changed.

The owners or directors of a company should be able to represent it in all its activities. It should not be restricted.
 
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