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

[One]

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.

 

[One]

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.

 

[McCrack]

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.

 

[McCrack]

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.

 

[Padraigb]

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.

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.

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.

 

[Bronte]

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.

 

[Bronte]

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.

 

[One]

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.

 

[One]

“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.

 

[Brendan Burgess]

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.

 

[callybags]

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.

 

[Padraigb]

... 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.

 

[Brendan Burgess]

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?

 

[DB74]

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?

 

[mf1]

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."

 

[Vanilla]

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.

 

[Purple]

“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.

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?

 

[Vanilla]

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?

 

[Purple]

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.

 

[Vanilla]

No, it was all gigbberish to me

There you go.