Ireland's scope to provide a common law option in finance and ITLS - "we are ready and willing and, in my view, very able to take up any slack that becomes available as a result of Brexit"
The potentials for 'Ireland as a Common Law Port' in the EU for Finance Related Professional Services after Brexit were highlighted by Chief Justice Frank Clarke in his speech at Finance Dublin's FCSDublin, 2018 Summit in October in which he elaborated on the financial services aspects of an address he made in September at Fordham University, New York on the overall potential for Ireland to act "as a Common Law Port after Brexit".
Citing his experience as a High Court Judge in the Commercial Court in the claims arising out of the collapse of the Madoff empire in the US where the US Federal courts ceded jurisdiction in favour of the Irish court he expressed confidence that 'the Irish courts were perfectly well able to handle large scale commercial litigation'.
Address at the Financial Centres Summit, Dublin, 2018, October 2nd, by the Chief Justice of Ireland Mr Justice Frank Clarke:

(See video here)

"Brexit is obviously the topic on a lot of peoples’ minds in Ireland at the moment. I think it’s probably fair to say that from an overall perspective no version of Brexit is likely to be anything but negative from an Irish point of view. And I find it difficult to conceive of any outcome - other than Brexit not happening - that would be not significantly negative from Ireland’s perspective.
Mr Justice Clarke: 'I think along with the English bar the Irish bar will be regarded as amongst the best advocates that the European Court feel come before them'
Mr Justice Clarke: 'I think along with the English bar the Irish bar will be regarded as amongst the best advocates that the European Court feel come before them'

But that doesn’t mean that it is negative across the board. And it seems to me that from a national point of view we need to identify ways of mitigating the harm in those areas where there will undoubtedly be harm. But we also need to identify sectors and areas where opportunities arise and do our best to exploit those so that the net affect will be as minimally negative as is possible.

And, curiously, I suspect the areas of finance and internationally traded legal services probably represent two areas with potential to deliver counterbalancing gains from the Irish point of view. I don’t have the expertise to speak about the financial services end of things but we do know that a number of significant financial services companies have announced movement of staff and there has been movement of particular sectors into Ireland.

And I think the same can be said for legal services. Now I don’t think that the provision of internationally traded legal services in London, including litigation, in London is going to stop overnight. London has great expertise, it has a great reputation internationally and it’s not going to disappear.

But there are probably some elements of the package which may not be comfortable in being deployed in a non-EU country and that, I suppose, provides the opportunity from Ireland's point of view. As the ISDA standard agreement shows, there is an appetite for remaining within the EU, being in a common law, English speaking country. So that if you go to litigation you are dealing with a court system with which you are broadly familiar, you are dealing in a language with which you are broadly familiar - but you have the benefits of operating within the EU.

I’d like to highlight maybe three points that derive from what I said in Fordham Fordham University School of Law, 13.9.2018).

The first is that I think the disruption that is likely to be caused to legal systems by Brexit is perhaps a topic that hasn’t been focused on to the extent that it perhaps deserves. It’s understandable [because] from an Irish perspective things like the border issue is hugely to the forefront of people's minds. While movement in financial services has obviously been the topic of some debate, I think what’s often missed is that even in areas that aren't particularly controversial, the 40-odd years that we have all been members of what was once the EEC and is now the EU, has led to a great intertwining of legal systems and legal issues.

There were plenty of things that worked reasonably well on a bilateral basis in the past. When we had extradition from one country to another, for example, that worked OK. But what has happened in 40 years of membership of the EU is that a lot of that has been abandoned and replaced, by in the case of extradition, for example, by the relatively streamlined European arrest warrant system. Now there is no reason in principle why we can’t go back to having an extradition treaty between Ireland and the UK if the UK leaves the EU in circumstances where the jurisdiction of the European courts in relation to European arrest warrants no longer runs. But, someone has to negotiate that treaty. Is it going to be negotiated by next March if there is a departure without an agreement? I’d be very surprised.

And the recognition of legal qualifications? When I was a young barrister there were arrangements between the Irish bar and the English bar for mutual call on 'fair and easy' terms. They got subsumed into European mutual recognition arrangements. Irish solicitors had similar arrangements. And, the list goes on and on; these are only the bits of the picture that I'm personally familiar with.

And I think it’s perhaps missed that there is a huge level of intertwining across a whole range of areas which is capable of being put together again. But it will take time - and it's certainly not capable of being done within a very short time frame if there is a very rapid departure from the EU without some form of ongoing transition agreement. And even then a lot of what may replace what’s currently in place may be more complicated. Some studies have been done in Ireland and other countries that suggest that the judicial and court resources required to deal with a typical extradition application is somewhere between two and three times as much as is needed to deal with a typical European arrest warrant.

And clearly, given proximity, a reasonable chunk of our extradition/surrender applications come from the UK. So even that is a challenge to us if we have to go back to doing old fashioned extradition. And we do extradition, we do it to the US and we do it to other countries that are not within the European transfer system, there is no problem dealing with it. But it’s just is going to be more complicated and that is replicated across a whole range of areas.

So the first thing I’d like to say is that, I think that it is going to be much more legally disruptive than people give it credit for. And even if there is a relatively coherent deal any lawyer I think knows that any new set of arrangements takes time to bed in. There will always be issues of interpretation there will be issues of practice, of how things are going to work in practice. So that even if you have a relatively comprehensive deal there will be debate about what it means, how the new measures are to be interpreted and applied in practice. So I think on any view there is going to be a period of uncertainty lasting for quite some time - and that’s even if there is a relatively coherent departure arrangement entered into.

The second issue is to emphasise what I think are opportunities for Ireland. Obviously there is a limit to the capacity of any country to expand without interfering with quality of any particular activity. But I think I can speak with some confidence about the Irish courts and in particular their commercial context. I spent seven years as a judge of our Commercial Court before I was promoted to the Supreme Court in 2012 and I think it’s fair to say the Irish Commercial Court has a high reputation for delivering first quality litigation services in large scale commercial litigation.

One anecdote illustrates this. As a High Court judge in the Commercial Court I was involved in dealing with a series of significant claims arising out of the collapse of the Madoff empire in the US, the total value of the claims was on the north side of a billion euro. There was parallel proceedings in the southern district in Manhattan which is the US Federal Trial Court. And, as you can imagine, the southern district of New York includes Manhattan. It therefore includes Wall Street and therefore is part of the US Federal Courts that deals with an awful lot of high level financial litigation.

The interesting question arose as to whether it was appropriate legally, both in US law and Irish law, to have these two cases running because there was a very significant overlap between them. The interesting outcome of it all was that the US Federal courts ceded jurisdiction in favour of the Irish court and felt the Irish court was a more appropriate court to deal with a very large piece of litigation.

And as often happens with very large litigation, the case ultimately ran for about five or six weeks and then the parties settled their differences. But there are still other bits of that Madoff litigation doing the rounds of the Irish courts. I think that was a sign of confidence that the Irish courts were perfectly well able to handle large scale commercial litigation. We have experienced commercial judges.

And if I had one comment about all of that, it's that obviously scaling up anything takes a certain amount of work. But my experience of dealing with Irish Government over the last number of months in this context is that the Irish Government is very focused on the Brexit issue at the moment. Certainly, if a credible case is made to government that more resources are needed in a particular area to deal with Brexit related issues, it’s my experience that there is a much more open attitude to providing those resources. They're not being thrown at the question but if you have made a real case that they are needed they are being made available.

From my perspective, I suspect that if I had gone [to Government] a year ago and said: 'We need more judges in the Commercial Court' the answer would have been 'Well we need more hospitals, more schools and more lots of other things. Why should you get them rather than anyone else?' But if you go today and make the same case - but saying 'We really need this because of Brexit-related issues' the answer is: 'Well is that enough; would you like some more?' So I actually think that government is on the right page in this context. If we need to upscale the Commercial Court to deal with an increasing amount of litigation I think the resources would be there.

That leads to another point, do we have the legal expertise to handle this? Well firstly I do think that the Irish bar and the Irish solicitors have shown an ability to deal with the most complex of commercial litigation. If you speak to judges of the European court, as I now do, in the context of the [Article] 255 Committee that was just mentioned, I think along with the English bar the Irish bar will be regarded as amongst the best advocates that the European Court feel come before them. So I think we can hold our own.

But [even] if there is a question of scale, there is a long tradition in Ireland of lawyers from other countries being able to come on a case-by-case basis, if necessary, particularly if there is areas of special expertise needed. Again, when I was a judge at the Commercial Court we would have a relatively small amount of patent litigation in Ireland, [with] a growing amount in some areas such as pharma, where Ireland has a significant business and where there is a number of generic producers who are looking for ways round patents of the large multinationals. But it wouldn’t be unusual for one of the parties to be represented by London counsel in a patent case, because we all know the London bar has great expertise in that area.

And in much the same way, if the Irish examinership corporate recovery model becomes something that people look at as a means of large scale transnational corporate restructuring, then there is no doubt that the expertise is there in the Irish accountancy business. All of the big Irish accountancy firms have arrangements with firms in other countries and they are often part of larger multinational firms and personnel can be transferred. So I have no doubt that if the demand is there, both in terms of expanding the judiciary with high quality commercial judges and the current and perhaps increased availability if necessary by initially at least people with expertise from outside coming in, I think it can be handled.

There is probably a limit. If the business were to increase five-fold I couldn’t guarantee that we would be up to that level of expansion. But I think there is the capacity to maintain what I think is the established quality of the Irish courts litigation system on a significantly expanded scale without interfering with the quality.

So I think the upshot of all of this is that there is an opportunity for Ireland to build a significantly greater presence in international dispute resolution. And I think we already have the expertise to do it and there is the willingness to expand as necessary to meet the needs.

The very fact that we can provide the certainty that come next April, after the first Brexit deadline, or perhaps come January 2021 after the proposed transition period if it’s agreed, we will certainly be in the EU, we will certainly be a common law country providing litigation in a system with which anyone from another common law country will be familiar and we do speak reasonably OK English, I think! So the building blocks are there to make a reasonable pitch for any business that may find that it is no longer comfortable being conducted in London because the UK is no longer a member of the EU.

Just as in financial services, I suspect we’ll have competitors for this business. Interestingly, the Paris Commercial Court has recently set up a division which allows people to plead in English. And the idea of a French court being happy to have cases heard in English is an interesting concept. I wonder what Napoleon would have thought when he was writing Code Napoleon about there being courts within his system which were allowed conduct their business in English? So I'm not suggesting we are the only show in town, but I think we have unique advantages that are not available to everyone else. And the one thing that I can certainly say on behalf of the court system, and perhaps to an extent even the Irish legal system as a whole, is that we are ready and willing and, in my view, very able to take up any slack that becomes available as a result of Brexit".
This article appeared in the October 2018 edition.