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

[Brendan Burgess]

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

 

[Vanilla]

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

 

[Brendan Burgess]

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.

 

[Vanilla]

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.

 

[Purple]

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.

 

[DB74]

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?

 

[Vanilla]

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.

 

[Vanilla]

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.

 

[DB74]

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

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.

 

[Vanilla]

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.

 

[Purple]

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.

 

[DB74]

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.

 

[csirl]

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.

 

[McCrack]

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.

 

[DB74]

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

 

[T McGibney]

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?

 

[Purple]

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?

 

[One]

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.

 

[One]

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?

 

[Vanilla]

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.