Galway solicitor overcharges by € 1.48 million

Legal costs claim slashed from €2.25 million to €765,000. Other solicitors firms also guilty of overcharging. Emma Browne reports.

A  Galway solicitor, Brian Lynch and Associates, overcharged legal costs by €1.485 million, according to a judgment by the Taxing Master, the independent assessor of legal costs. In a judgment issued on 2 July 2004, the Taxing Master upheld an earlier ruling where he reduced the instruction fee for the solicitor, to be paid by the State, from €2.25 million to €765,000, almost a third of the claimed instruction fee.
The instruction fee is the fee charged by the solicitor, aside from the costs of the barristers in the case and all “outlay” costs of photocopying, compilation of documents, legal charges, etc.  It supposedly covers the work put into the case by the solicitor and reflects the complexity and importance of the case and the expertise the solicitor brings to it.
The case in question involved a Galway company, Nestor Bus Limited, which had been refused a licence to provide a bus service between Galway and Dublin. It sued Bus Éireann and CIÉ, the Minister for Public Enterprise, Ireland and the Attorney General. The case against the State was successful. The State agreed to pay the legal costs of Nestor Bus Ltd, whose solicitors were the Galway legal practice.
The State appealed the instruction fee demand of €2.25 million to the Taxing Master, the legal officer responsible for adjudicating on disputes over legal costs. In his first adjudication in this case, the Taxing Master, James Flynn, reduced the instruction fee from €2.25 million to €765,000.
The solicitor was entitled to request the Taxing Master to review his decision in the case and did so. The Taxing Master issued his reviewed judgment in July 2004, in which he reaffirmed his original decision.
In their submissions on the review of the original decision, Brian Lynch and Associates maintained “the particular amalgam of legal and factual issues presented by its claim against the Defendants has no parallel and that there are no appropriate ‘comparator' cases capable of providing assistance as to the appropriate level of instruction fee to allow in the instance”. They also argued that the case was significant as it collapsed an archaic regulatory framework (the way the Government dealt with bus licence applications); the case was of great public importance; was important to the Plaintiff; was urgent and commercially pertinent; and there was a large volume of documentation.
The solicitor's firm claimed its labour costs arising in the case amounted to €1,876,285.20, of which €1.5 million arose in respect of the work done on the case by the main partner in the firm, Brian Lynch. It was claimed he had spent 3,000 hours working on the case at a rate of €500 per hour. The remainder of these €1,876,285.20 fees arose in respect of other personnel in the firm working on the case.
Although the Taxing Master acknowledged Nestor's case was “one of exceptional breadth, complexity and difficulty” and that the elements of the case “would have placed a significant burden on the Plaintiff's legal advisers”, he reaffirmed his earlier ruling in reducing the instructions fee to €765,000. He said: “I am convinced that the amount of time that ought to have been afforded to this case was a fraction of that which is placed before me.” In the same case, senior counsel fees were reduced from €63,486 to €52,500 and junior counsel from €42,324 and €35,000.
Concluding, he said “I am convinced that the amount allowed by me in respect of the instruction fee is fair and reasonable and I consider the amount allowed a fair and proper sum to remunerate the Solicitors for the work that was involved in the case.”
Other judgments by the Taxing Master also show overcharging by other firms of solicitors.
In Lowe Taverns Limited versus the County Council of South Dublin and the Square Management Limited, the Taxing Master considered the claimed instruction fee of solicitors Ivor Fitzpatrick and Co. In this case the Taxing Master dealt with what are known as “party to party” costs (that is, legal costs of one party in a case that have to be paid by the other party to the case) and solicitor and client costs. Solicitor and client costs are defined as “all costs incurred but not necessarily necessary”.
The original case had concerned issues to do with a portion of the car park in the Square shopping centre in Tallaght. Lowe Tavern, the Plaintiffs, was successful in the case. The costs of Lowe Tavern's solicitors, Ivor Fitzpatrick and Co, were to be paid by the county council and the Square Management.
The solicitors originally set out a fee of €375,000 for five day trial. The case lasted 13 days, so they charged €395,000. The Taxing Master reduced this to €320,000 for solicitor and client costs and €260,000 for party to party costs.
In another case considering party to party cost the solicitors – William Fry Solicitors – charged their instruction fee at €195,000. The Taxing Master reduced it to €75,000. In the case the Taxing Master felt that the solicitor was including a lot of items that could be considered a “luxury”, such as: four solicitors being present for a telephone conference; at another stage, five solicitors being present for a consultation with a barrister; and two solicitors reviewing a draft affidavit. He also said that a culling of the files would have reduced the documentation by 50 per cent.