knowledge | 12 April 2019 |
2018 in the Commercial Court
2018 remained a busy year for Ireland’s Commercial Court.
Our research identified that 161 new cases were admitted to the Commercial List of the Irish High Court during the calendar year 2018. While this was more in line with the number of cases admitted in 2016, it reflected a decrease from the 216 cases admitted during the calendar year 2017. The number of cases admitted will not of course directly reflect how busy the court is, as a great deal of the court’s time is taken up on trials, and many of the longest trials are the conclusion of cases admitted in previous years.
Similarly to previous years, the Commercial Court’s new caseload in 2018 spread across plenary actions, summary judgment claims, applications under the Companies Acts and analogous matters, (particularly in relation to court-sanctioned reorganisations, cross-border mergers and share capital reductions), judicial reviews, miscellaneous common law actions and one case initiated by way of special summons.
The general decrease in cases admitted is not confined to particular types of case, but rather comes from a slight decrease across several areas including plenary actions, summary judgment claims and judicial reviews. The reduction in the number of summary judgment claims admitted to the Commercial Court is likely to be, at least partly, attributable to (i) the continued growth of the Irish economy and increased ability of borrowers to meet their financial obligations, and (ii) most financial institutions having already dealt with defaulting debtors arising from the economic crisis who are worth pursuing; though most of the debt actions now are taken by acquirers of distressed portfolios.
Some of the significant 38% increase in the number of applications admitted under the Companies Acts or the Cross-Border Merger Regulations are attributable to Brexit and the increased attractiveness of Ireland (as a common law, English speaking country within the European Union) as a primary EU establishment for multinationals who rely on an EU presence or regulatory passport.
In addition to the broad spread of types of actions the Commercial Court deals with, our research indicated that the industries represented in that court span almost every sector of the economy. Despite the decrease in the number of summary judgment claims, the largest proportion of cases admitted to the Commercial Court in 2018 continued to come from the banking and financial services industry; almost half of these cases still appear to be debt enforcement proceedings by banks and loan portfolio acquirers, or defensive proceedings against such banks or acquirers. Similarly to 2017, the second highest number of cases came from the construction and infrastructure sector. As a significant number of these cases involved judicial review proceedings, it appears that there continues to be buoyancy in major development projects, which attract risks of legal challenge.
Our research identified that the combination of the banking and financial services industry and the construction and infrastructure industry accounted for almost half of the cases admitted to the Commercial Court in 2018. The concentration of cases is much less pronounced beyond these two industries. Given the large number of multinationals operating in and from Ireland, it is unsurprising that the next highest numbers of cases came from insurance and reinsurance; pharmaceuticals and life sciences and architecture and engineering. There was a very significant increase of 60% in the number of cases originating in the insurance and reinsurance industry. As the global economy becomes increasingly reliant on technology, it is also unsurprising that cases coming from the communications, technology and media sectors featured more prominently among those dealt with by the Commercial Court in 2018 in comparison to previous years.
Our research revealed that 19 cases were not admitted to the Commercial Court during 2018. This was significantly higher than the 11 cases refused entry in 2017. Given that the vast majority of applicant cases are still admitted to the Commercial Court, it is clear that the court continues to adopt a broad view of the meaning of ‘commercial matters’. It also appears that the Commercial Court will not admit cases unless the list judge is satisfied that the cases are of a commercial nature and that the parties will be in a position to comply with the Commercial Court’s directions. The list judge does not appear to be prepared to risk wasting scarce Commercial Court resources on cases that are not suitable for entry to that court.
As the court which most closely reflects where we are as an economy, it is interesting to see the slight decrease in the new caseload of the Commercial Court, but more interesting to observe the evolving changes in the types of cases which are coming before that court.
This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.