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



## Brendan Burgess (2 Feb 2012)

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.



This is crazy and needs to be changed, even if it requires a referendum. 

Brendan


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## One (2 Feb 2012)

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.


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## Brendan Burgess (2 Feb 2012)

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.


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## McCrack (2 Feb 2012)

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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## T McGibney (2 Feb 2012)

brendan burgess said:


> this is crazy and needs to be changed, even if it requires a referendum.



+1


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## One (2 Feb 2012)

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.


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## Padraigb (2 Feb 2012)

McCrack said:


> Companies are separate legal persons.
> 
> That's the nub of the issue.
> 
> ...



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.


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## Purple (2 Feb 2012)

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.


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## Time (2 Feb 2012)

McCrack said:


> Companies are separate legal persons.
> 
> That's the nub of the issue.
> 
> ...



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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## McCrack (2 Feb 2012)

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.



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.


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## Padraigb (2 Feb 2012)

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....


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".


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## Time (2 Feb 2012)

It would fall on deaf ears.

The company is a legal person separate from its shareholders, directors, servants and agents.


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## Purple (2 Feb 2012)

Time said:


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



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?


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## Time (2 Feb 2012)

Simply, a person can represent themselves. A company is a person. A company cannot physically represent itself. Therefore a lawyer is needed.


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## B1e2r3n4a5rd (2 Feb 2012)

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.


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## Time (2 Feb 2012)

Nope. They are barred by a supreme court ruling.


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## Brendan Burgess (2 Feb 2012)

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.



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.



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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## McCrack (2 Feb 2012)

Brendan Burgess said:


> One said
> 
> Here is a valid counter argument...
> 
> ...



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.


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## One (2 Feb 2012)

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.


 
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.


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## Brendan Burgess (2 Feb 2012)

McCrack said:


> I might as well be flogging a dead horse here with some people.



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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## One (2 Feb 2012)

Look at the very first sentence here.....

In the [broken link removed] yesterday, the MD of Scotchstone Capital tried to represent the company in an action against the state.

In other words, a man who is not a legal professional wants to represent a company (who has the status of another person) not in the Small Claims Court, not in the District Court, not in the Circuit Court but in the High Court against the state itself. Any sensible judge would say that that man could not possibly have the requisite skills and knowledge to represent the company as well as the compnay could and should be represented.


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## One (2 Feb 2012)

Their cause of action is "challenging the recapitalisation on grounds including that it unlawfully imposes an unacceptable €2.7 billion burden on Irish and other EU taxpayers". At first instance this seems a battle of David versus Goliath. By that I mean that the plaintiff would have a very difficult battle on his hands to win. No wonder no solicitor would agree to a no win no fee agreement. They would have little hope of getting paid.

If you are determined that a director should be able to legally represent his own company (in certain limited ways) you may yet be successful in persuading me to your way of thinking, but certainly not on the merits of this case.


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## McCrack (2 Feb 2012)

One said:


> Look at the very first sentence here.....
> 
> In the [broken link removed] yesterday, the MD of Scotchstone Capital tried to represent the company in an action against the state.
> 
> In other words, a man who is not a legal professional wants to represent a company (who has the status of another person) not in the Small Claims Court, not in the District Court, not in the Circuit Court but in the High Court against the state itself. Any sensible judge would say that that man could not possibly have the requisite skills and knowledge to represent the company as well as the compnay could and should be represented.



Yes, thank you and to flesh it out it is proper to point out that the only persons permitted to practice law in this jurisdiction are trained and licensed (i.e. holding practising certs and professional indemnity insurance) are lawyers (solicitors and barristers).

And just so there is no confusion by practising I mean representing and pleading ANOTHER PERSON'S (e.g. a company) case before a court/tribunal.


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## McCrack (2 Feb 2012)

Brendan Burgess said:


> 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.



http://en.wikipedia.org/wiki/Flogging_a_dead_horse

Your second paragraph is a rant and not relevant to this thread.

Your last paragraph doesnt make any sense in the context of separate legal personality that a company enjoys. Owners/directors are not lawyers. They cannot legally represent another person in a court.


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## Padraigb (2 Feb 2012)

One said:


> 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.


While it is usual to engage solicitors to deal with conveyancing issues, it is not actually required by law. 


> 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.


The distinction is not absolute. A company must have officers, and they hold office because of the existence of the company. In certain senses, the officers are the eyes, ears, hands, and intellect of the company, which can do nothing without them.


One said:


> Look at the very first sentence here.....
> 
> In the [broken link removed] yesterday, the MD of Scotchstone Capital tried to represent the company in an action against the state.
> 
> In other words, a man who is not a legal professional wants to represent a company (who has the status of another person) not in the Small Claims Court, not in the District Court, not in the Circuit Court but in the High Court against the state itself. Any sensible judge would say that that man could not possibly have the requisite skills and knowledge to represent the company as well as the compnay could and should be represented.


If I, as an individual, wished to argue my own case in the High Court, I have that right. A judge might say that I could not have the requisite skills and knowledge to do so, but that does not remove my right.



One said:


> Their cause of action is "challenging the recapitalisation on grounds including that it unlawfully imposes an unacceptable €2.7 billion burden on Irish and other EU taxpayers". At first instance this seems a battle of David versus Goliath. By that I mean that the plaintiff would have a very difficult battle on his hands to win. No wonder no solicitor would agree to a no win no fee agreement. They would have little hope of getting paid.
> 
> If you are determined that a director should be able to legally represent his own company (in certain limited ways) you may yet be successful in persuading me to your way of thinking, but certainly not on the merits of this case.


We are discussing a general principle here, and a general principle should not be decided on the difficulty or likelihood of a body winning a particular case.

From the IT report linked in the opening post:


> 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”.


That is quite an alarming suggestion - that the pursuit of justice should be limited by the funds available to the plaintiff.


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## Bronte (3 Feb 2012)

One said:


> Any sensible judge would say that that man could not possibly have the requisite skills and knowledge to represent the company as well as the compnay could and should be represented.


 
I beg to differ, it is entirely possible that the man knows the company inside out and knows all the details of the case and would represent it better than a barrister who has many cases.


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## Bronte (3 Feb 2012)

Padraigb said:


> That is quite an alarming suggestion - that the pursuit of justice should be limited by the funds available to the plaintiff.


 
Lets say one were a husband and wife small company with only 10K in the accounts, would that cover you even for a High court case if you had to pay your own costs and theirs.  Would you be able to even hire legal advice for that sum if you were going to the High court.  Anyway the figures are even more outrageous at 850K.  

What this case seems to mean is that the company should begger itself and use up the cash assets of 200K on lawyers and maybe that would put the company out of business, but never mind that is the law.


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## One (3 Feb 2012)

Bronte said:


> I beg to differ, it is entirely possible that the man knows the company inside out and knows all the details of the case and would represent it better than a barrister who has many cases.


 
I agree. But what would happen if the judge let a person who was not able to sufficiently represent the company go ahead and represent the company anyway, and that man lost the case? How does a judge know, before the case is heard, who is and who isn't capable of representing a company in court? At the outset he insists companies are represented by legal professionals. Seems reasonable to me.


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## One (3 Feb 2012)

“If I, as an individual, wished to argue my own case in the High Court, I have that right. A judge might say that I could not have the requisite skills and knowledge to do so, but that does not remove my right”. 

I fully agree with you. But with no disrespect, the matter here is not about the right of an individual to represent himself. The matter here is about the right of an individual to represent somebody else. The company is legally “somebody else”. You don’t have a right to represent somebody else. You may actually have all the ability in the world to represent somebody else, but you don’t have that right. The court won’t allow a lay person to represent somebody else, and the court is correct. The court is insisting that, at a minimum it must be a legal professional that represents that other person. The action of the court sounds sensible to me.

I have made a few posts on this thread, so I’ll finish with the following. I understand the frustration of a company director chasing debt and being confronted with high legal costs in order to chase those debts. If the company director cannot recuperate those debts because of high legal costs justice has not been served. Time and time again I have spoken to people who are owed thousands of Euros and are unable to recuperate the debt. In fairness it is a problem area and does need legal reform or at least review. I understand the sense of frustration being increased because the director thinks he is capable of representing the company in what may in reality be a straightforward matter.

It has been suggested that in order to improve the situation an officer of the company should be able to represent that company in court. But to allow a lay person to represent a company doesn’t seem to me to be the correct avenue to take to achieve the necessary reform. And certainly in the Scotchstone case, the refusal to allow a lay person to represent the company in the High Court was correct. It was not the place for a lay person to try to do his best. That company has duties, obligations and responsibilities to people other than its director and professional legal representation must be provided to ensure those duties, obligations and responsibilities are fulfilled. This issue goes to the very core concepts of what a company is, the concept of a company being a separate legal identity. The judge had no choice in this matter. Any other decision would have meant that one of the most fundamental foundations of the legal concept of a company would be undermined. I am in support of a review of the debt collection laws, but I am against the director’s attempt to represent the company in the Scotchstone case. It just seems utterly reckless to me.


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## Brendan Burgess (3 Feb 2012)

It seems to me that Scotchstone has the following choices

1) Take a case and use one of its directors to represent itself.
2) Take no case. 
3) Take a huge risk and pay lawyers up front to take the case

Scotchstone has a very good case. Option 1) is illegal. Option 2) is not possible as it does not have the money.

So the law forces it to drop the case. 

It is denying access to the courts to a company which cannot afford to pay lawyers. This is wrong. This is very wrong and should be changed.


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## callybags (3 Feb 2012)

> Scotchstone has a very good case. Option 1) is illegal. Option 2) is not possible as it does not have the money


 
How do you know they have a very good case?
Obviously the lawyers don't think so or they would have taken it on a "no win, no fee" basis.

As I see it, Scotchstone and it's directors are looking for a free bet... have their day in court and if they lose nothing is lost.

If any joe soap is allowed take a case in the high court there would be chaos and the system would collapse.


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## Padraigb (3 Feb 2012)

One said:


> ... But with no disrespect, the matter here is not about the right of an individual to represent himself. The matter here is about the right of an individual to represent somebody else. The company is legally “somebody else”....


I know the law gives a company a separate identity, but I don't think that discussion should be arrested because of that. The capacities of a body corporate differ from those of an individual - for example, a company can not hold a driving licence.

One could cavil forever on the notion that a company has a separate legal persona, but it is absurd to dissociate the company entirely from the fact that it is ultimately comprised of persons (shareholders) and individuals (officers), can act only in accordance with their lawful decisions, and only through individuals.

The separateness of a company is a legal contrivance. It is quite possible to amend the law to modify that separateness.


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## Brendan Burgess (3 Feb 2012)

callybags said:


> How do you know they have a very good case?
> 
> 
> 
> .



Hi Joe

Because I raised the issue myself back in April long before I ever heard of Scotchstone. 

They might not win it, but they have a good case. 


> As I see it, Scotchstone and it's directors are looking for a free  bet... have their day in court and if they lose nothing is lost.



This is a tough one. If the state wins the case and gets an order for costs, then, they would find it difficult to enforce. Is there not a procedure whereby the state could ask for their costs to be lodged in advance?


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## DB74 (3 Feb 2012)

One said:


> That company has duties, obligations and responsibilities to people other than its director and professional legal representation must be provided to ensure those duties, obligations and responsibilities are fulfilled.



The only obligations that a company has which a sole trader wouldn't have are to its shareholders. The shareholders have already appointed the directors to act on the company's behalf in every single other aspect of running the business. They are effectively given carte blanche to run the company as and how they see fit and they will be judged by the shareholders at the AGM where a vote will be taken to either re-appoint the director for another term or not.

A director can open a bank a/c on behalf the company and write cheques drawn on that bank a/c. They do not need prior professional approval or representation to do so.

A director can purchase valuable assets on behalf of the company. Again they are under no obligation whatsoever to have these assets valued either prior to or after purchase by a professional valuer.

A director can choose to do business with whoever he or she wishes. Again no obligation to engage a professional to ascertain whether the person they do business with is suitable or not.

The legal distinction between a director and a limited company is effectively irrelevant in virtually all aspects of running the business, especially in small 2-director-2 shareholder companies.

So what is so different about a director representing a company in a court of law?


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## mf1 (3 Feb 2012)

We're not alone...............

This is a report on a very recent case in Scotland. 

mf
"In Secretary of State for Business, Enterprise and Regulatory Reform v UK Bankruptcy Ltd [2010] CSIH 80, 2011 SC 115, it was held that in Scotland a company could not be represented in proceedings by anyone other than an advocate or solicitor possessing a right of audience. This rule has been considered again by the Court of Session in an opinion delivered earlier this week - Apollo Engineering Ltd (In Liquidation) v James Scott Ltd [2012] CSIH 4 - in which one of Apollo's directors sought permission to represent the company in legal proceedings where the company was unable to afford legal representation.

The court unanimously held that the director should not be permitted to represent the company. Different reasons for reaching this conclusion were given by Lady Paton and Lord Reed (Lord Bracadale supported Lord Reed's position). In Apollo and unlike the earlier Bankruptcy case, the court considered the relevance of Article 6 ("Right to a fair trial") of the European Convention on Human Rights. Nevertheless, with reference to Airey v Ireland (1979) 2 EHRR 305, Lord Reed found that Article 6(1) did not require the court to give the director permission to represent the company because this would not provide the company with an effective right of access to the court."


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## Vanilla (3 Feb 2012)

I agree that a director should be able to appear on behalf of a company in court and that some mechanisms should be put in place to allow for this. 

It might be that shareholders approval would be needed or an EGM. 

It might be that the director would become personally liable for costs awarded against him/her  or that the shareholders would have to agree to be personally liable for those potential costs or even put the potential costs on deposit in court. These aspects would have to be explored as in normal circumstances a lay litigant exposes themselves to that liability.


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## Purple (3 Feb 2012)

One said:


> “If I, as an individual, wished to argue my own case in the High Court, I have that right. A judge might say that I could not have the requisite skills and knowledge to do so, but that does not remove my right”.
> 
> I fully agree with you. But with no disrespect, the matter here is not about the right of an individual to represent himself. The matter here is about the right of an individual to represent somebody else. The company is legally “somebody else”. You don’t have a right to represent somebody else. You may actually have all the ability in the world to represent somebody else, but you don’t have that right. The court won’t allow a lay person to represent somebody else, and the court is correct. The court is insisting that, at a minimum it must be a legal professional that represents that other person. The action of the court sounds sensible to me.
> 
> ...



I was in the district court a few weeks back (having a minor case struck out). I sat there for 4 hours watching proceedings, waiting for the case I was concerned with to be called.
I was staggered by the ineptitude of the majority of the lawyers who faced the judge. In many cases he had to prompt them to ask for documents, forms etc to be filled in/submitted. It seems bizarre that someone of such a low calibre could legally represent a company but an experienced director of that company who knows the issues inside out and has previously taken legal advice on the pertinent issues cannot represent the company. 

My own experience of solicitors has been, to say the least, unimpressive. Thankfully I now know two very good ones but my god there was some dross to sift through before I found them. 

How often does a judge refuse to allow a Lawyer to represent a company because the judge forms the opinion that the lawyer is a mutton-head?


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## Vanilla (3 Feb 2012)

Purple said:


> I was in the district court a few weeks back (having a minor case struck out). I sat there for 4 hours watching proceedings, waiting for the case I was concerned with to be called.
> I was staggered by the ineptitude of the majority of the lawyers who faced the judge. In many cases he had to prompt them to ask for documents, forms etc to be filled in/submitted.



Instead of a sweeping generalisation can you give us a concrete example of one case and what forms/documents were missing?


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## Purple (3 Feb 2012)

Vanilla said:


> Instead of a sweeping generalisation can you give us a concrete example of one case and what forms/documents were missing?



No, it was all gigbberish to me but the jusge was getting miffed by some of open-mouthed pauses as he led them through whatever they were meant to do.
I can PM you the court number and date if you like.


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## Vanilla (3 Feb 2012)

Purple said:


> No, it was all gigbberish to me



There you go.


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## Brendan Burgess (3 Feb 2012)

> I was staggered by the ineptitude of the majority of the lawyers who faced the judge.



I was involved in a probate case and sat waiting for the case I was involved with to come up and got exactly the same impression. The saving grace was that the judge was excellent. 

A typical exchange would be 

Barrister: I want to apply for an x,y, z...
Judge: Why do you want to apply for an x, y,z...
Barrister:  "genuinely nonsensical answer" I don't think it was just because I did not understand the terminology. 
Judge: Have you applied for the standard A, B, C first? 
Barrister: No. 
Judge: Why not? 
Barrister: Because we want an xyz
Judge: Well you know that you must apply for an ABC and if you don't get that, you can apply for an xyz.  Application thrown out

Another, very funny exchange, 

Barrister: I want to apply for an animal grant of xyz
Judge: a what? 
Barrister : an animal grant of xyz
Judge: I have never heard of an animal grant of xyz
Barrister: I hadn't heard of it either myself Judge,  until yesterday. 
Another barrister intervenes - I think he means an annual grant of...
Judge -Ok, I have heard of an annual grant of.
Barrister: That must be it so... 

Gilbert & Sullivan would only need to take it down. there would be no need to make it up.

Like Purple, I know one or two good solicitors and have been let down by many others.  I would be very happy to take a relatively straightforward debt collection case to a court against solicitors or barristers if I was allowed to do so. 

Brendan


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## Vanilla (3 Feb 2012)

Another interesting thread has disintegrated into a general rant against lawyers on AAM, such a pity.


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## Brendan Burgess (3 Feb 2012)

Vanilla said:


> Another interesting thread has disintegrated into a general rant against lawyers on AAM, such a pity.



I don't agree at all. 

A director of a company has been prevented from taking a case, because he is not a lawyer. 
He felt that he could present the case better than the solicitors he could afford. 
Purple and I feel the exact same. 
We have pointed that out.

You asked specifically



> Instead of a sweeping generalisation can you give us a concrete example of one case and what forms/documents were missing?



I gave you two examples.


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## Vanilla (3 Feb 2012)

With all due respect Brendan, I asked Purple for a concrete example and he failed to give one. He spent 4 hours listening to gibberish ( in his own words) so he clearly did not understand what was going on. I believe he was listening to the civil list and I can perfectly imagine what he was listening to and understand fairly well what was going on.

You then took the opportunity to launch your own personal view point of the inadequacies of barristers from your own personal experience of seeing two barristers motions in the masters court ( I assume), neither of which was a concrete example and neither of which had anything to do with the thread.

And, in case you missed it, I agreed that a director should be allowed to represent his company but with power comes responsibility. No lawyer is immune to a professional negligence suit, no lay litigant is immune to costs being awarded against them and hence, a director who wants to represent his company must also be open to one or the other. Will they have professional indemnity insurance to fall back on? Will they have a compensation fund available to claim on for the shareholders? All of these matters must be thought through- that's going back to the thread, which I hope is allowed.


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## Purple (3 Feb 2012)

Vanilla said:


> There you go.



If I saw an argument between two people who were speaking Russian I would be aware that they were having an argument, even if I didn’t know what it was about.
Working on the assumption that the judge knew what he was talking about, hearing his sighs and listening to him lead the solicitors who faced his through the procedures that they were attempting to execute led me to that conclusion.
He also seemed genuinely happy when a solicitor who was on top of their game faced him, he sat up an engaged with then.  
As I said I can’t give concrete examples as I don’t remember the form numbers/ applications as they meant nothing to me but it was something along the lines of the examples  Brendan gave.

Maybe the judge should have to satisfy themselves that the person representing the company is competent to do so. I fully accept that in the majority of cases that person will be a lawyer. There’s no way, for example, that I would ever attempt to represent my company or myself in court.


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## DB74 (3 Feb 2012)

Vanilla said:


> And, in case you missed it, I agreed that a director should be allowed to represent his company but with power comes responsibility. No lawyer is immune to a professional negligence suit, no lay litigant is immune to costs being awarded against them and hence, a director who wants to represent his company must also be open to one or the other. Will they have professional indemnity insurance to fall back on? Will they have a compensation fund available to claim on for the shareholders? All of these matters must be thought through- that's going back to the thread, which I hope is allowed.



Why can't the costs be awarded against the company, just as they would be with a lay person defending himself or herself?

Is that not what could happen if a barrister represented the company?

A shareholder cannot sue a director for incompetence AFAIK so why should a director representing a company in a court of law be any different from a director representing the company in a boardroom?


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## Vanilla (3 Feb 2012)

DB74 said:


> Why can't the costs be awarded against the company, just as they would be with a lay person defending himself or herself?




Never said they couldn't- in fact in my previous post I presented that as another option- it should all be open for discussion. However a lay litigant is personally liable which is totally different. If a director failed in a court action and the costs were awarded against the company he or she would not be personally liable- there they would differ. 

In relation to your second point, should the director turn out to be negligent in the legal action why shouldn't they be pursued by the shareholders on that basis in the same way that a lawyer could be? If they are holding themselves out to have sufficient expertise to take the case in court, then why not?

In fact if we were to follow the logic that a director should be allowed to represent his or her company in court, with any potential costs being awarded against the company and could not be held liable for professional negligence we would have a whole new category of litigant who would have nothing or no-one to fear, no personal or professional liability.


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## Vanilla (3 Feb 2012)

Purple said:


> As I said I can’t give concrete examples as I don’t remember the form numbers/ applications as they meant nothing to me but it was something along the lines of the examples  Brendan gave.



Indeed.


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## DB74 (3 Feb 2012)

Vanilla said:


> Never said they couldn't- in fact in my previous post I presented that as another option- it should all be open for discussion. However a lay litigant is personally liable which is totally different. If a director failed in a court action and the costs were awarded against the company he or she would not be personally liable- there they would differ.



If a barrister represents a company in court and loses and costs are awarded against the company, the barrister isn't responsible for the costs, the company is so I fail to see the difference

The only difference is the person representing the company




Vanilla said:


> In relation to your second point, should the director turn out to be negligent in the legal action why shouldn't they be pursued by the shareholders on that basis in the same way that a lawyer could be? If they are holding themselves out to have sufficient expertise to take the case in court, then why not?



But the shareholders have already appointed the director to act on the company's behalf in boardrooms, bank meetings, supplier meetings etc etc etc with virtually no protection for any type of negligence. So why shouldn't that extend to courtrooms.


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## Vanilla (3 Feb 2012)

The difference is that in any normal court action there is either:

1. A lay litigant who is exposed to costs in the event of an order against them or
2. A professional representative who is exposed to a potential suit for professional negligence and potential for costs against the party.

In the case of a director taking an action on behalf of a company neither applies. If I were a shareholder I would have a new level of risk where I have both an exposure to costs and no protection against professional negligence. If you think this is fine, then that's your point of view, but I'm presenting another point of view.


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## Purple (3 Feb 2012)

Vanilla said:


> In the case of a director taking an action on behalf of a company neither applies. If I were a shareholder I would have a new level of risk where I have both an exposure to costs and no protection against professional negligence. If you think this is fine, then that's your point of view, but I'm presenting another point of view.


If it was me taking the case I'd agree with you. The point of the thread is should others have the option of taking a different path. From your previous posts it seems you agree.


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## DB74 (3 Feb 2012)

Companies are entitled to file accounts and tax returns and all manner of documents without qualified professional help, all of which can leave the company open to fines, claims etc where false declarations are made.

Also I don't understand how a professional legal representative is "exposed to ... potential for costs against the party" but maybe I'm not fully understanding your point here.

Most of the thrust of your argument seems to be focusing on potential negligence by the legal representative but realistically how often is this an issue?

Can you give me an example of where having a director represent a company is somehow  a worse option than having to pay for legal counsel, assuming the company loses the case.


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## csirl (3 Feb 2012)

I dont agree with the argument that a Director does not have the skills to represent a limited company in court. 

A lot of lay litigants do a good job of representing themselves and often beat experienced legal professionals. A lay litigant who knows their business inside out and who is good a public speaking can often be better than a barrister who is dealing with something complex and technical for the first time. Alternatively, you can have some simple straight forward cases e.g. many debt collection cases, whereby its quite easy for the lay litigant to put together the necessary documentation to easily prove their case.

If a lay litigant can do it, I dont see why a company director or CEO cant do it. Having the director/CEO specifically authorised to do so by the shareholders gets over the liability hurdles. 

I fully agree that not all directors/CEOs are capable of this, and there are some complex legal cases that require professional legal knowledge, but, we should respect the right of shareholders to say who they want to represent their company in court.


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## McCrack (3 Feb 2012)

Purple said:


> If it was me taking the case I'd agree with you. The point of the thread is should others have the option of taking a different path. From your previous posts it seems you agree.


 
No. If you set up business and you want to have the option of representing your business before the courts in litigation then don't incorporate it. There are other business models that will allow you do that such as a partnership.

If you incorporate you take the benefit of limited liability which is based on seperate legal personality.

You can't have it both ways unfortunately.


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## DB74 (3 Feb 2012)

I don't see what extra protection there is for anyone by having the company represented by a legal professional

I can see the advantages of it but I don't see why it should be an obligation as opposed to a choice


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## T McGibney (3 Feb 2012)

McCrack said:


> No. If you set up business and you want to have the option of representing your business before the courts in litigation then don't incorporate it. There are other business models that will allow you do that such as a partnership.
> 
> If you incorporate you take the benefit of limited liability which is based on seperate legal personality.
> 
> You can't have it both ways unfortunately.



Sorry, I don't understand why, for example,Tesco (a limited liability company) or Dunnes Stores (an unlimited company) are prohibited from mandating their MD to represent their interests in court, but Price Waterhouse Coopers (a partnership) aren't?


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## Purple (4 Feb 2012)

McCrack said:


> No. If you set up business and you want to have the option of representing your business before the courts in litigation then don't incorporate it. There are other business models that will allow you do that such as a partnership.
> 
> If you incorporate you take the benefit of limited liability which is based on seperate legal personality.
> 
> You can't have it both ways unfortunately.




We all know what the legal positing is. The point of the discussion is whether or not that should be changed. 
I see no logical reason why a majority of the shareholders and/or directors should not be able to appoint a director to represent the company in court. 

Take, for example, a two or three person highly specialised software company. They take a case against a larger software company for breach of a patent. The only real issue at hand is whether one company's code was the same as another company's code. How on earth can a lawyer better argue the technicalities of the case than a director who wrote the code, took extensive legal advice on the patent issue and has vast experience pitching to multinationals so won't be intimidated by the court and is used to public speaking?


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## One (4 Feb 2012)

One said:


> That company has duties, obligations and responsibilities to people other than its director and professional legal representation must be provided to ensure those duties, obligations and responsibilities are fulfilled.


 
I know there are many people here who can easily point out some incorrect thinking in the two following exaggerated scenarios if they wish. But they are only hypothetical briefly composed examples. They are not meant to be watertight arguments. I only want to get the gist of my point across.

Scenario 1
Many companies (for example restaurants or building companies) have unsecured creditors (such as general suppliers). If the director of the company decides that he wants to represent the company as a defendant in a case where;
§a claim of several million Euros is being made against the company, 
§for damages for an uninsured accident to an employee,
§and he loses this case solely because he didn’t do a good job of representing the company,
§but his incompetence was not so bad that it would amount to the legal definition of negligent representation,
§and the monetary value of the claim against the company as well as the plaintiff’s legal costs are enormous,
§and the company is forced out of business because of those costs,
§and the creditors who are owed tens of thousands of Euros cannot recuperate all of those costs,
is that fair on those unsecured creditors?

Scenario 2
If I owned an €400K apartment in a block of apartments where there was a management company involved, and the director decided to represent the company in court I would be quite worried. Even if all the other apartment owners (shareholders) agreed with the director and out voted me on this, I think it is far too much at stake to allow a lay person to represent the company in this case.


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## One (4 Feb 2012)

Many of the arguments for allowing directors to represent companies in court seem to be based on:

Inability to get good legal representation.
The high legal costs.
I find it easy to believe there are some poor legal professionals practicing law, but I find it impossible to believe that good representation cannot easily be obtained. Of course it can.

I find it easy to believe that the legal costs can out weigh the amount of debt. This is apparent even in the district court. If you are chasing a debt as small as €350 no solicitor will want to attend court on your behalf. If a small company was owed €350 by one person, €600 by another, €420 by yet another person it may easily find itself in a position that the legal costs can out weigh the amount of debt owed. Perhaps there is a case to be made for allowing a director to represent a company in a limited types of straightforward cases like those, or perhaps debt collection law needs further reform?


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## Vanilla (4 Feb 2012)

The only difficulty they might encounter would be not knowing the rules/practices of the particular court so they would need help with that. It would be very unusual for someone who doesn't work in law to know enough to be able to run a case and present it in court- not to say it couldn't be done, but it would be an exceptional person who could be both their own expert witness and litigant. 

I had a client call recently who was served with a Circuit Court Civil Bill and had decided to defend the action himself to save on legal costs- a very intelligent man, he came in to me simply to swear an affidavit which he said a 'barrister' friend had helped him to draft. He was due in court later that morning. Problem was that what was on in court was actually a motion for judgement in default of appearance but he didn't understand that. He thought he could turn up with his, no doubt, intelligently drafted, affadavit and present his case. That's just one very simple example.


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## One (4 Feb 2012)

The Scotchstone case does not serve as an example of a shockingly unjust result that should be the initiator for a change in the law, in order for justice to be served in the future. If anything, it in part serves as an example of why the law should stay as it is. I don't want to sound like I am attacking the MD here, but I can't agree with his choice of action. The fact is an MD appeared in court thinking he was competent enough to represent his company in a tricky High Court case, and yet didn’t seem to realise that the most probable outcome of his representation was that the case would be dismissed instantly.

He thought he was competent at the law. Yet he didn’t seem to know the law that was most immediately relevant to his case (which is directors cannot represent their companies in court), and the case was dismissed straight away. There is a lesson in that. I am not being sarcastic when I say I am sure he probably is a very intelligent man, but at the same time he didn’t manage to represent his company in its case very well did he? I don’t think any solicitor, barrister or judge in Ireland would say he represented the company very well, yet he thinks directors should be allowed to represent their companies. There is a little irony there.


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## Purple (4 Feb 2012)

Vanilla said:


> The only difficulty they might encounter would be not knowing the rules/practices of the particular court so they would need help with that. It would be very unusual for someone who doesn't work in law to know enough to be able to run a case and present it in court- not to say it couldn't be done, but it would be an exceptional person who could be both their own expert witness and litigant.
> 
> I had a client call recently who was served with a Circuit Court Civil Bill and had decided to defend the action himself to save on legal costs- a very intelligent man, he came in to me simply to swear an affidavit which he said a 'barrister' friend had helped him to draft. He was due in court later that morning. Problem was that what was on in court was actually a motion for judgement in default of appearance but he didn't understand that. He thought he could turn up with his, no doubt, intelligently drafted, affadavit and present his case. That's just one very simple example.




I agree. In the vast majority of cases it would be stupid for a non-lawyer to represent their business. The question here though is should the law therefore not allow such representation in any circumstance?
By the way, it was these sort of procedural errors that  the judge was steering young lawyers through the day I was in court. I didn’t understand the issues but it was clear that some of the legal professionals didn’t either.


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## Brendan Burgess (4 Feb 2012)

> I find it impossible to believe that good representation cannot easily be obtained.



I can speak from my own personal experience - I have been let down by lawyers on many occasions through dishonesty and through inaction. I have got good service on much fewer occasions than I have got bad service.

I have worked with many victims of the Irish Nationwide Buidling Society, and I have seen two solicitor/barrister combinations which have done a decent job. The others were atrocious, mind-bogglingly bad. 

It is much harder than you think to find a good solicitor.


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## Time (4 Feb 2012)

Indeed Vanilla. Not knowing the procedures would be enough to derail any defence by a lay person.


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## Purple (4 Feb 2012)

Time said:


> Indeed Vanilla. Not knowing the procedures would be enough to derail any defence by a lay person.



Would not knowing the procedures be enough to derail any defence by a lawyer?


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## Vanilla (4 Feb 2012)

Purple said:


> Would not knowing the procedures be enough to derail any defence by a lawyer?


 
Let's assume for a minute that it is impossible to find a lawyer who knows the procedures, or difficult. 

If you lose your case due to the negligence of your lawyer you can successfully sue them and you WILL be covered by their insurance or their professional compensation fund.


But I don't, for one minute, accept that you or Brendan are correct in your shockingly blatant generalisations in which you are trying to blacken the entire legal profession.


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## Purple (5 Feb 2012)

I'm not trying to blacken the whole legal profession; my own exposure to the sector has been too limited for that so I only speak from personal experience. I’m sure there's good and bad lawyers just as there are good and bad plumbers, engineers, doctors, plasterers etc. No industry has a monopoly on idiots and chancers or brilliant practitioners of their chosen field. 
I’ve spent the last few months trying to find competent companies within my own field to sub-contract work into and they are few and far between so my own sector isn’t flowing over with competence either.


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## Vanilla (5 Feb 2012)

Purple said:


> I was staggered by the ineptitude of the majority of the lawyers who faced the judge. ... It seems bizarre that someone of such a low calibre could legally represent a company but an experienced director of that company who knows the issues inside out and has previously taken legal advice on the pertinent issues cannot represent the company....
> 
> How often does a judge refuse to allow a Lawyer to represent a company because the judge forms the opinion that the lawyer is a mutton-head?


 
This is how your post reads. 

The contention seems to be that the majority of lawyers are incompetent therefore the director of this company should be allowed to represent it. 

I have much more experience of court, barristers and other solicitors than either you or Brendan and I can tell you that your last post is accurate- yes there are good and bad- but natural selection ensures that if you have the right Senior Counsel represent you in the High Court they are superb.


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## osullivant (5 Feb 2012)

*Can a Director of a company hold a "Practicing cert"*

I have read the posts on this subject and they seem to skirt around the principle involved.

These days the corporate veil is pierced/lifted in more and more situations,  with responsibility falling onto the shoulders of the directors for corporate acts. Not to mention personal guarantees, where a small company can well find itself unable to be represented on a matter that will undoubtedly result in the director/owner having to honour a  personal guarantee.

If the Company Directors believe that they can make a better attempt at a case then no representation, then that should be their choice. (If the shareholders are happy to give them them this power)

All of the arguments against letting a Director represent a Co are based on situations where a "human person" would equally be at risk of making errors.

Whatever about a rule forbidding the company as plaintiff and being represented by a "Non Lawyer" The rule preventing a Company being represented as a defendant by an officer of the company should be removed.

But what is the situation where the director has a Law degree or even a professional qualification. Is it still correct in principle to say that the company must pay a representative.


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## Bronte (9 Feb 2012)

Vanilla said:


> If you lose your case due to the negligence of your lawyer you can successfully sue them and you WILL be covered by their insurance or their professional compensation fund.


 
Has there ever been a case of a client suing a barrister for not representing them properly in court?  Who would decide this, a judge, who comes from the banks of barristers?  How would a client know they had not been correctly represented?  Is the work and competence of barristers overseen and monitered by anyone (other than themselves).


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## csirl (9 Feb 2012)

Bronte said:


> Has there ever been a case of a client suing a barrister for not representing them properly in court?


 
These happen from time to time. In my experience, a victory by the client (usually having to act as a lay litigant for obvious reasons) is rare - would be interested in seeing the actual stats for win/lose for these.


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## Time (9 Feb 2012)

I would think that they would settle out of court rather than risk a trial.


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