As the taxation of party to party costs, which are costs ordered by a court that must be paid by the loser of the litigation, stands at present, the court makes an order for costs and Government stamp duty is payable on what is known as the certificate of taxation. A substantial sum of money is payable to the Government in this regard. As I understand the position — and I am open to correction — the person in whose favour the order for costs is made must pay the stamp duty to take up the certificate of taxation. One cannot enforce the order for costs without the certificate. The successful litigant pays the stamp duty. I do not want to pretend I have more expertise on this than I have, so I am open to correction but as I understand it the stamp duty itself is ultimately recovered from the defendant in the court proceedings.
I am concerned about the reference in this subsection which states ". . . no solicitor or legal cost accountant or other cost drawer retained to present the bill of costs to the Taxing Master or a County Registrar shall be entitled to be paid any fees, disbursements, charges or expenses in relation to the taxation of costs. . . ". I emphasise the reference to "charges or expenses in relation to the taxation of costs" which is open to the interpretation that a successful litigant may have to pay their own stamp duty on the certificate of taxation and the stamp duty would not then be recoverable from the defendant who was ordered to pay costs. The stamp duty may be interpreted as being a charge arising out of the taxation.
That could substantially change the law in a manner which is to the detriment of litigants. There is sometimes a view of legislation of this sort that one is trying to penalise wayward solicitors for overcharging clients. I am all in favour of penalising wayward solicitors for doing that. However, the legislation is also about seeking to ensure that people who have to resort to the courts are treated fairly and that successful litigants — people who have had to go to court to defend their rights — recover from the person who wronged them the proper expenses of their court action.
If this provision was to prevent the recovery of stamp duty on taxation it would create a situation where many litigants who were successful would end up settling for a far lesser sum than they would be entitled to recover on costs: they would end up with a liability to their own solicitors which would have to be met and they would effectively be stuck with their own stamp duty.
With a view to Report Stage I would indicate to the Minister that this section requires an entirely separate subsection which makes it clear that a successful litigant who has an order for costs made in their favour is entitled to recover the stamp duty charged on the certificate of taxation, and that the stamp duty is not to be regarded as a charge or expense within the terminology of subsections (6) and (7).
As a practising solicitor who, obviously, has an interest in this matter, I think there is a degree of unreality in relation to the manner in which the taxation of costs is dealt with in this Bill and is discussed on a regular basis. I accept the view that any solicitor who provides a service to their client, like any other professional, should be able to draw up a bill of costs which they submit to their client and which their client can assess as to the validity of the charges. An engineer or a builder might prepare their bill in-house, without the assistance of anyone else but what happens in the legal profession is unique, particularly in the context of successful litigants. The cost accountant serves two functions. The first is the preparation of a bill; the second is that the cost accountant effectively acts as an advocate before the Taxing Master.
The Taxing Master performs a judicial function and the cost accountant is an expert. When someone contests a bill, as they are entitled to do, two solicitors do not argue their case before the Taxing Master. Two cost accountants — one for each side who are professionally trained and have a great deal of expertise, argue why a bill is right or wrong. At that stage the cost accountants do not draw up bills; they do not perform the same function of any other professional for the purpose of charging clients. They act as advocates before a court which is a subsidiary court of the High Court. Ultimately, the litigant who has been successful often has to pay the fees of their own cost accountant. They cannot get an order that those fees be paid by the other side.
In my view many taxations take place because defendants are being "a bit thick" about it. They try to put off the day when they have to meet their obligations as ordered by the courts. They know that if a bill goes for taxation it may take six or seven months before the matter is heard and then the certificate of taxation has to be taken up; they can, perhaps, get away with not paying an order for costs for up to a year.
A properly submitted bill may go to taxation and the Taxing Master may confirm the bill in its entirety as submitted by the successful litigant or makes a minor adjustment to the bill. The sort of minor adjustments that can be made may be, for example, where a medical doctor might charge an attendance fee for court of £700 and the Taxing Master might consider it only reasonable the doctor gets £500; that is something outside the control of the solicitor or client. However, where there is a very minor adjustment made to a bill it is wrong the law does not provide that the defendant who forced the taxation is not required to pay the costs, not the costs of the preparation of the bill but those for the cost accountant acting as advocate before the Taxing Master processing it.
The present system acts as an incentive to recalcitrant litigants who have lost their cases and who are trying to put off the day when they have to properly comply with court orders for costs. There is a need for new thinking in this area, not in the interests of the legal profession but to protect people who have properly gone to court, who have had orders for costs made in their favour, whose lawyers have prepared bills of costs which are deemed ultimately to be entirely accurate or to which only minor modifications are required, and who might have to pay £2,000 or £3,000 themselves to their taxing cost accountant to have the matter determined before the taxing master. It is wrong that people who are successful in litigation should be penalised in that way.
I have had that experience in the area of civil litigation and also in the area of family law where people have been through judicial separation cases in the Circuit Court or the High Court. It relates particularly to wives who have been through cases where the husbands have been unsuccessful, orders for costs have been made in favour of wives and there is a reluctance to meet the costs. At the end of the day, because a reasonable bill has gone to the Taxing Master and been upheld, the wife ends up having to foot a bill of anything from £1,000 to £3,000 or £4,000 for her own cost accountant. Often the reasons the bills are so large is that the wife might have succeeded in having the family home transferred into her name and the case is regarded as having a certain value by the court. It might be a modest family home in Dublin terms worth £80,000 with a mortgage on it and has been put in the wife's name. The wife ends up having to pay cost accountants to do a proper job in order to have the legal costs the husband should have paid recouped.
There is a need to look at this. It is an issue which has never been properly debated in the Oireachtas. it arose when the Solicitors (Amendment) Act, 1994, came before us. We succeeded then in having some modifications made. People steered away from the issue because there is a general lack of familiarity with the problems that affect people in this regard. We look at the issue too frequently in the context of the recalcitrant solicitor and not the recalcitrant litigant who uses the system to generate unnecessary expense for someone who has succeeded in the courts, be it in a family case or another case.
