The same but worse is one way of summing up the latest year on year High Court litigation data. After another ghost year in the Four Courts marked by remote hearings and increasing delays in many of the judge’s lists, the sharp decline in new legal activity in 2020 continued into year two of the pandemic, albeit at a somewhat slower pace.

When The Currency launched in autumn 2019, we decided to monitor High Court litigation trends at the beginning of each year to complement the breakdown of official data compiled by the Courts Service in its annual report every July.

The total number of incoming cases tumbled for the fifth consecutive year from 11,858 in 2020 to 10,349 in 2021, roughly a 13 per cent drop compared to 20 per cent the year before, making last year the slowest year for new High Court actions this century. 

One of the few areas of litigation bucking the trend is the rise in judicial review cases, much of it driven by the high number of challenges to strategic infrastructure developments, particularly housing. But generally speaking, case numbers are low. If corporate advisory work is thriving, and the big law firms say it is, the market for litigation is depressed. So what is driving down the numbers?

It is easy to point the finger at Covid-19, and realistically the pandemic has been a disruptive force for society and business. Economic inactivity in sectors like hospitality, travel and high street retail, and the work from home mandate are bound to have had an impact on litigation activity eg a decline in cars on the road or fewer workplace accidents will have an impact on the number of personal injury claims. If it’s full steam ahead among the large corporates, anecdotally lawyers suspect there has been an increased reluctance among small and medium businesses to litigate during the pandemic, possibly over costs concerns in a period of uncertainty. 

Nor has there been much by way of a pandemic bounce in the courts. Covid related proceedings have been confined to a sprinkling of high-profile business interruption claims by pubs and hotels - including the landmark action against FBD; commercial landlord suits for rent arrears; and the odd procurement row involving the HSE. Government supports have offered a lifeline to many businesses that have kept corporate insolvencies down, perhaps at artificially low levels. Deloitte recently reported 111 corporate insolvencies in Ireland in the first quarter of 2021, a decrease of 30 per cent from the same quarter in 2020 when 159 incidents were recorded. 

Why the decline?

The truth is there is no pat explanation as to why new litigation activity has become sluggish. A combination of factors appear to be at play from the increasing popularity of mediation as a means of dispute resolution to the steady demise in insolvency cases that flooded the courts for about a decade after the 2008 global economic crisis. These have largely sifted through the system. Take bankruptcy where adjudications fell from 479 in 2015 to 200 last year. As the chart below shows, summary debt actions rose last year but are nowhere near where they were two or three years ago or a decade before in 2011 when the number of summary claims breached the 5,000 mark. Seen like this, the overall downward trend in new High Court cases can be viewed – at least in part - as something of a natural correction. It is a truism, and one frequently cited by commercial lawyers that litigation broadly mirrors, or perhaps more accurately shadows, economic cycles. What is happening in the world today becomes tomorrow's court case. When the event is something as monumental as the fallout from the 2008 crash then the shadow is exceptionally long.

That said, the last time the number of incoming cases for the year was down as low as the 10,000s was in 2005 when an outcry over rising insurance costs led to an overhaul of the personal injuries regime. Claims peaked in 2004 (15,293) when over 800 summonses per day were issued during July, tumbling to a mere 746 High Court summonses for the whole of 2005 following the introduction of the Civil Liability and Courts Act. The depressing effect those rule changes had on overall High Court case numbers that year is clear as day.

Despite the reforms and the establishment of the Personal Injuries Assessment Board in 2003, PI claims quickly began to rise again, climbing to 8,909 High Court summonses in 2017. Again an outcry over the impact of bogus and exaggerated PI claims on rising insurance costs (predominantly in the Circuit Court) led to the introduction of new guidelines by the Judicial Council last March slashing compensation levels. 

Along with Covid, could the culture that led to these well-flagged reforms have had a chilling effect on PI claims that might explain the overall reduction in cases lodged in the High Court? Possibly. Courts Service data shows that High Court PI summonses have been in decline in recent years falling by 16 per cent from 7,987 in 2019 to to 6,682 cases in the High Court in 2020. There is certainly an argument among some lawyers that personal injury claimants have been unduly demonised by insurers and the media in recent years and that some are now loath to bring legitimate compensation claims to court except in serious cases.

Roadblocks in the legal system

However other factors, like inefficiencies in the system and the introduction of new fora to deal with statutory disputes, also help to explain the downward trend in High Court litigation since 2017. “The overall reduction in the volume of High Court litigation is partly attributable to parties availing of access to other dispute resolution fora, including mediation and arbitration. It is also partly accounted for by the legislative reform of recent years that resulted in the expansion of the jurisdiction of statutory dispute resolution bodies. These included the Financial Services and Pensions Ombudsman, the Tax Appeals Commission, the Employment Appeals Tribunal and the Personal Injuries Assessment Board,” said Enda Hurley, partner and co-head of A&L Goodbody's Disputes & Investigations team.

“In the commercial arena, we saw an enlarged appetite amongst clients to participate in mediation to avoid delays that were either a consequence of the curtailment in the operation of the Courts as a result of the pandemic or the shortage of judges available to hear cases – an issue that has been widely reported. The European Commission Report on Justice for 2021 highlights the fact that Ireland is the jurisdiction in the EU with the lowest number of judges per capita,” he added.

The rise of mediation and delays of up to two years in getting cases on for hearing and months-long waiting times for judgments were raised by a number of lawyers who spoke to The Currency. While the overall number of new cases is in decline, fewer court sittings due to covid combined with the increased complexity of many claims at High Court level, due to the growing number of EU directives and regulations and protracted electronic discovery processes involving trawls through thousands of documents, has meant delays with insufficient judicial resources to meet demand.

Under the Irish legal system, a judge may finish hearing a complex business dispute lasting several days, and start another case almost immediately afterward with no time set aside to work on a judgment. This has repercussions. Six-month wait times for judgments have become an unwelcome reality. Even rulings on pre-trial motions can be subject to excessive delays. As one lawyer put it, justice is a commodity, particularly in commercial disputes, and very often getting it delivered quickly is more important than getting it delivered well. “It's like going to a restaurant. You want the meal on your table after 15 or 20 minutes.  Even if it's better, you just don't want to wait 40 minutes.”

Some lists have managed admirably, such as the Commercial list and the Commercial Planning and Strategic Infrastructure list, the latter of which has only two judges assigned to it. While there are delays, they are nothing compared to the pressures experienced in the Chancery division, for example, which deals with business disputes that fall under the €1 million threshold typically required for entry into the fast-track Commercial Court. One obvious difference during the pandemic is that litigants in large commercial rows have been able to avail of software that facilitates remote plenary hearings with witnesses. Trialview has been used in the Mater Hospital Group's dispute with the HSE over Covid-19 payments, the Department of Education's row with Western Building Systems for alleged negligence in school building projects and in the Ronan Group's compromised row with US investment firm Colony Capital. This technology comes at a cost and is therefore not readily available to most parties that wind up in court.

Improving efficiencies and access to justice by lowering legal costs and reviewing the numbers and types of judges are part of the programme for government which aims to implement the Report of the Review of Administration of Civil Justice by former High Court president Peter Kelly. But it may not be enough. Last year, High Court President Mary Irvine said the court was in a "desperate scenario" and required 17 new judges to make a difference. At the time there were 37 High Court judges, now there are 45.

The rise of the mediator

Maurice Phelan, head of the dispute resolution team at Mason Hayes & Curran, notes that in February 2020 before Covid-19 struck in Ireland, there was one Monday when not a single case was listed for entry into the Commercial division of the High Court. 

“Commercial disputes always lag behind a period of commercial activity. We've had a very strong market in commercial, corporate, M&A, particularly in 2021. It's cyclical, so we would expect to see the fall out that comes from those deals happening probably in the latter part of this year. I suspect the number of cases coming before the Commercial Court will probably dial up towards the end of this year. That's my read of it," he said.

In general, the nature of business in the court has remained relatively steady; plenary actions are steadily rising. The exception is summary judgment matters which have fallen off a cliff since 2017, reflecting the move away from the Nama years of defaults, bust developers and the pursuit of multimillion euro bank debts.

“Another trend that we're seeing in practice a lot is cases being resolved through sensible and pragmatic negotiation without the need for formal court proceedings and that's, of course, good for clients,” Phelan said.

Since the introduction of the Mediation Act in 2017, solicitors are obliged to advise clients, before initiating a court action, to consider mediation to resolve a dispute. In Phelan’s view this has led to a shift in the mindset of lawyers who previously may have been concerned their clients would consider them weak if they pushed mediation as an alternative to litigation too early in the process. He said it is now seen as a natural part of dispute resolution.

“I'm 20 years in the practice. In my first 10 years, mediation was more of the exception, whereas now it's rare that mediation isn't given serious consideration. And a lot of the bigger disputes that are resolved outside of court proceedings are resolved through mediation.”

Karyn Harty, partner at McCann Fitzgerald, also cites the 2017 legislative change as the reason for the upswing in mediation, a trend likely to have been accelerated by the pandemic with fewer court sittings. “It probably has given a little bit of a boost to the mediation initiative. Commercial clients are very pragmatic. They work with what they've got to work with,” she said. 

She notes that the focus of her team's work has shifted since the pandemic struck. “There's been a lot more advisory work, a lot more work around internal investigations, and regulatory advisory work. And a bit less of the big ticket commercial litigation. What I don't know is whether that is, to some extent, pandemic related. I think a proportion of it is but it's hard to quantify,” she said. 

Mediation is by nature a private matter. Negotiations take place behind closed doors away from the public gaze. Or more often these days on zoom calls which gives the parties greater time flexibility. The process often goes on for several days, especially if there are multiple parties involved. That can lead to substantial costs savings when compared with litigation. Built-in arbitration clauses in business contracts, such as in the construction sector, have also kept numerous disputes out of the courts. 

However, in the round it is hard to gauge the impact alternative methods of dispute resolution are having on litigation stats, particularly mediation, as there is a dearth of even basic information around the number of legal rows referred to mediators in a given year. All that's possible is a sort of quasi reverse engineering of available court data.

It seems the legal work is still there. It's just that its nature is shifting.

The detail of the data

In the High Court, incoming civil proceedings are broken down by case type. The different categories include summary proceedings, cases brought under the Companies Act, judicial reviews, plenary disputes, Circuit Court appeals etc. However, extrapolating information from High Court filings is not always straightforward. For example, PI summonses are filed under the heading of a plenary action by the Courts Service, which means they are bundled in with various actions from business disputes to defamation. While it is clear is that the number of plenary actions fell by nearly a fifth last year, getting a nuanced picture of the different types of plenary actions launched will not be possible until a comprehensive breakdown of the stats is made available by the Courts Service in its annual report in the summer. Arguably there is a public interest, or at least a benefit for the legal services sector, in separating out the different categories of plenary summonses at the beginning of the process so litigation trends can be assessed contemporaneously.