Professional Negligence in Ireland

Introduction

1. Legal framework

General grounds for professional liability and their legal bases

The main grounds for a claim concerning professional liability are breach of contract, negligence and breach of fiduciary duty.

Negligence

The primary line of authority for professional negligence claims stems from the UK decision of Bolam v. Friern Hospital Management Committee² as approved in Ireland by Ward v. McMaster.³ The standard of care applicable in professional negligence cases is by reference to the ‘ordinary skilled man exercising and professing to have that special skill’.

Contract

There is an implied term that a professional will exercise reasonable care and skill in providing services to the client. The scope of the services to be rendered will usually be defined in the contract and disputes frequently arise where there has been an element of ‘mission creep’.

Fiduciary duty

Some professions also owe fiduciary duties to their clients, such as a duty of confidentiality. These may arise where the relationship is one of trust and loyalty. A plaintiff can claim equitable remedies in the event of a breach of fiduciary duty.

Limitations on the extent of the professional’s liability

Professionals may limit their liability with regard to the contractual obligations owed to their clients. This can be done, for example, by way of exclusion clauses, clauses limiting the scope of the duty or indemnity clauses.

Common defences to a liability claim

Defences

A defendant may defend a professional negligence claim by establishing that one of the required elements of negligence was not present. The defendant can argue that the service provided was of a reasonable standard, or that the defendant’s actions did not cause the damage complained of. The defendant may also argue that the particular duty of care owed did not extend to cover the damage complained of, as it was outside the terms of the retainer. A professional has a duty to protect the client’s interests and carry out instructions in the matter to which the retainer relates; however, this duty does not extend to advising on unrelated matters. While this principle can limit the scope of the obligations arising in contract, it does not prevent a duty from arising in tort.

It should be noted that compliance with an accepted practice will not always provide a full defence, and the fact that a practice is universal within a profession will not of itself protect the professional concerned from liability (Roche v. Peilow,⁴ ACC Bank Plc v. Johnston,⁵ Kelleher v. O’Connor⁶).

Partial defences that reduce the level of costs awarded

Section 34 of the Civil Liability Act 1961 provides for apportionment in cases of contributory negligence. The court can reduce damages owed to a plaintiff as ‘the Court thinks just and equitable, having regard to the degrees of fault of the plaintiff and the defendant’.⁷ Further, claimants must mitigate their losses, which is a question of fact as opposed to one of law.

Finally, while not strictly a defence, a professional may also be in a position to seek a contribution or indemnity from another party or a ‘concurrent wrongdoer’, pursuant to the Civil Liability Act 1961. Two or more persons will be concurrent wrongdoers where they are liable to the same party in respect of the same damage. This commonly arises in cases involving construction professionals.

2. Limitation and prescription

Time limits

The Statute of Limitations 1957 (as amended) prescribes the time limits applicable to professional negligence claims. These time limits run from the date the cause of action accrued except in cases of concealment, fraud or mistake, where the limitation periods may be extended. A plaintiff that has a cause of action in both contract and tort is entitled to pursue whichever claim provides the most advantageous limitation period.⁸

Contract

Generally, there is a six-year time limit to institute proceedings based in contract, from the date on which the cause of action accrued, unless otherwise provided in the contract. A 12-year limitation period operates for contracts executed as a deed.

Tort

A six-year time limit applies to bring an action in tort, from the date on which the cause of action accrued. In the case of a personal injury claim against a medical professional, a two-year time limit applies.

3. Dispute fora and resolution

Courts or tribunals in which professional liability claims are in general brought

The jurisdiction in which court proceedings are brought will depend on the monetary value of the claim. The District Court has jurisdiction over claims up to €15,000, and the Circuit Court deals with claims with a value of up to €75,000 (or €60,000 for personal injury claims). Claims with a value in excess of this limit are heard by the High Court, which has an unlimited monetary jurisdiction. Each court has its own set of procedural rules.

High-value professional liability claims may also potentially be heard by the Commercial Court, a fast-track division of the High Court established to deal exclusively with disputes of a commercial nature valued in excess of €1 million. Cases in the Commercial Court are case-managed and tend to progress at a much quicker pace than other High Court cases.

Alternative dispute resolution

Professional liability disputes may also be dealt with by way of alternative dispute resolution (ADR) and it is common for contracts to require disputes to be determined by ADR. Mediation and arbitration are the most common forms of ADR used in Ireland; however, conciliation and adjudication are common in construction disputes. Conciliation is similar to mediation, except that the parties can opt for the conciliator to issue a binding recommendation. Other forms of ADR, such as expert determination and early neutral evaluation, are also available but less commonly used.

In addition, following the Mediation Act 2017, any court may adjourn legal proceedings on application by either party or of its own initiative to allow the parties to engage in mediation. Failure by either party to engage in ADR following such a direction can result in that party being penalised in relation to costs. Further, solicitors must now advise their clients of the option of mediation prior to issuing proceedings.

In Ireland, the law on arbitration is codified in the Arbitration Act 2010, which incorporates the UNCITRAL Model Law on International Commercial Arbitration. The arbitrator’s decision is binding on the parties and there is no means of appeal. Where parties have entered into a valid arbitration agreement, the courts are obliged to stay proceedings. Ireland is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, allowing Irish arbitral awards to be enforced in any of the 157 countries party to the Convention.

The Construction Contracts Act 2013 provides for adjudication in construction disputes regarding payment. The Act applies to all construction contracts entered into after 25 July 2016. Adjudication has the benefit of providing a decision within 28 days of the referral to adjudication (or 42 days if the referring party agrees to this extension). The decision will bind the parties until the dispute is finally settled, such as by arbitral award or a decision of the court.

4. Remedies and loss

Types of remedies

There is a range of remedies available in professional negligence claims, including orders for specific performance, rescission and declarations, as well as interim remedies such as injunctions. Damages, however, are the primary remedy sought.

The method of assessing loss and damage

Calculating loss

Generally, damages for a contractual claim should place the plaintiff in the same situation, in monetary terms, as if the contract had been performed. The courts have developed various means of assessing damage in professional negligence claims. The expectation approach involves assessing the actual financial position of the plaintiff against the position the plaintiff expected to be in as a result of the advice given or the service received.

The decision of the House of Lords in Banque Bruxelles SA v. Eagle Star(SAAMCo)⁹ has been applied in Irish cases, particularly concerning solicitors’ negligence. In that case, the House of Lords held that where a person is under a duty to take reasonable care to provide information on which someone else would decide on a course of action, that person is, if negligent, responsible not for all the consequences of the course of action decided on but only for the foreseeable consequences of the information being wrong.

Further, the ‘no-transaction’ approach to damages has been adopted in a number of cases to compare the actual financial state of the plaintiff with the position it would have been in had it not been provided with the allegedly negligent advice or service.¹⁰

Specific professions

a) Lawyers

Barristers and solicitors are regulated by separate professional bodies. However, the Legal Services Regulation Act 2015 establishes a new Legal Services Regulatory Authority (LSRA), which (once the Act is fully commenced) will regulate the provision of legal services by all legal practitioners. The only sections of the Act that are currently commenced relate to the establishment of the LSRA and public consultations, and consequently solicitors and barristers continue to be regulated separately pending commencement of the relevant provisions. The Law Society of Ireland anticipates that a number of Sections are due to be commenced in the second quarter of 2019, in particular the Sections relating to regulations allowing for limited liability partnerships (LLPs) and legal partnerships formed between two of more legal practitioners, one of whom is a barrister. The provisions that make it a criminal offence to provide legal services as a practising barrister without being entered on the Roll of Practising Barristers are also expected to commence shortly. The Law Society has also confirmed that the LSRA is in the process of drafting regulations regarding barristers’ professional indemnity insurance.

Solicitors

Professional bodies and key regulatory and disciplinary codes and bodies

Solicitors are currently regulated by the Law Society of Ireland pursuant to the Solicitors Acts 1954 to 2015. The Law Society investigates complaints, including allegations of excessive fees, misconduct or inadequate professional services. The Complaints and Client Relations Committee can uphold or reject a complaint, or direct the solicitor to take certain steps, including paying compensation of up to €3,000. The Committee may also refer the solicitor to the Solicitors Disciplinary Tribunal, an independent statutory tribunal that considers complaints of misconduct. A client may also go directly to the Tribunal. The Tribunal may direct restitution of up to €15,000 and may refer its finding to the president of the High Court, who will determine the sanction to be imposed on the solicitor.

Compulsory insurance scheme

Solicitors must maintain a minimum level of professional indemnity cover of €1.5 million for every claim, excluding defence costs, as prescribed by the Solicitors Acts 1954 to 2015 (Professional Indemnity Insurance) Regulations 2017 (as amended). The Regulations also set out additional minimum terms and conditions required in a solicitor’s professional indemnity policy. Cover may only be provided by ‘participating insurers’ with a minimum financial strength rating of BBB.

Barristers

Professional bodies and key regulatory and disciplinary codes and bodies

Barristers are regulated by the Bar Council of Ireland. The Barristers’ Professional Conduct Tribunal hears complaints of misconduct but does not consider claims regarding professional negligence, which are dealt with by the courts. The Tribunal can uphold or reject a complaint and can suspend or disbar a barrister, require return of the client’s fee and impose a fine or a caution. It cannot award compensation. Decisions can be appealed to the Barristers’ Professional Conduct Appeals Board.

Compulsory insurance scheme

The Bar Council Code of Conduct requires barristers to have professional indemnity insurance, currently set at €1.5 million (any one claim).

b) Medical practitioners

Professional bodies and key regulatory and disciplinary codes and bodies

Medical Council

Doctors practising in Ireland are regulated by the Medical Council, which maintains a register of practitioners, sets standards for professional competence and investigates complaints. The Preliminary Proceedings Committee (PPC) considers all complaints that are made to the Medical Council. If there is a prima facie case to warrant further investigation, the PPC must refer the complaint to the Fitness to Practise Committee (FTPC) for a Fitness to Practise Inquiry. If the complaint does not warrant further investigation, the PPC will dismiss the complaint. It is also open to the PPC to make other directions, such as referring the dispute for mediation or referring the doctor to another body or a professional competence scheme. If the complaint proceeds to a full inquiry, the FTPC may recommend: a written censure; a fine not exceeding €5,000; attaching conditions to registration; suspending or cancelling registration; or prohibiting the doctor from applying to have his or her registration restored for a certain period.

Nursing and Midwifery Board of Ireland

The Nursing and Midwifery Board of Ireland (NMBI) is the independent statutory organisation responsible for regulation of nurses and midwives and its functions are defined in the Nurses and Midwives Act 2011. The NMBI complaints procedure is very similar to the Medical Council procedure, as are the available sanctions. All complaints are initially sent to the PPC and transferred to the Fitness to Practise Committee for inquiry where required.

Dental Council of Ireland

The Dental Council of Ireland (DCI) is the regulatory body for the dental profession, created under the Dentists Act 1985. Dentists must be on the DCI register to practise dentistry. Private patients may complain to the Dental Complaints Resolution Service (DCRS), a voluntary service that offers a free mediation service; however, patients must first raise their complaints with the dental practice concerned. Serious complaints and issues relating to fitness to practise may be referred to the DCI by the DCRS, or by patients. In addition, public patients may complain to the Health Service Executive (HSE) Complaints Officer and, if this outcome is not satisfactory, the patient may seek a review from the HSE’s Director of Advocacy, or complain to the Office of the Ombudsman.

Pharmaceutical Society of Ireland

Pharmacists and pharmaceutical assistants must be registered with the Pharmaceutical Society of Ireland (PSI), whose functions are prescribed under the Pharmacy Act 2007. Each pharmacy must have a superintendent pharmacist and a supervising pharmacist, each of whom must have at least three years’ experience. Complaints may be made to the PSI and the procedure is similar to that of the Medical Council, with complaints going to the PPC. If further action is warranted, the complaint will go to mediation or to either the Professional Conduct Committee or the Health Committee for an inquiry (depending on the nature of the complaint). At the conclusion of the inquiry, the committee will prepare a report containing the evidence presented and the committee’s findings. The PSI Council can then decide what, if any, sanctions to impose.

Compulsory insurance scheme

The Medical Practitioners (Amendment) Act 2017 requires registered doctors to obtain medical indemnity insurance, except in certain circumstances. The Act only affects doctors in private practice, as practitioners working in the public health service (including private consultants practising in public hospitals) are covered under the state’s Clinical Indemnity Scheme, which also covers nurses and midwives. Under the NMBI Guidelines, nurses must have professional indemnity insurance. Nurses working in private practice may be covered by their employer’s insurance, and the Irish Nurses and Midwives Organisation Medical Malpractice Scheme provides cover for members who are self-employed or employed outside the public sector. Dentists are required to hold appropriate professional indemnity cover.

Matters varying from Section I or matters from Section I specific to each group of professionals

Medical negligence claims must be brought within two years of the date of injury or negligence or the date of knowledge that an injury or negligence has occurred. This time limit does not apply to cases involving injuries to minors. In general, medical practitioners will not be found negligent if they have followed a general and approved practice; however, practitioners cannot rely on a general and approved practice with inherent defects that ought to be obvious to any person giving the matter due consideration. If the claim is based on the fact that the practitioner has deviated from a general and approved practice, it must be proved that the course taken was one that no medical practitioner of similar specialisation and skill would have followed, taking ordinary care.

c) Banking and finance professionals

Professional bodies and key regulatory and disciplinary codes and bodies

The Central Bank of Ireland

The Central Bank is responsible for the regulation and supervision of financial services firms. It has the power to conduct investigations, issue warnings, impose conditions on licences, revoke licences or impose administrative sanctions. As part of the Central Bank’s Fitness and Probity Regime, it has enforcement powers against individuals found to be in breach when carrying out controlled functions within a financial institution. Finance professionals may appeal certain Central Bank decisions to the Irish Financial Services Appeals Tribunal.

Financial Services and Pensions Ombudsman

Consumers may lodge complaints against a financial services provider or pension provider with the Financial Services and Pensions Ombudsman (FSPO) (formerly two separate bodies, the Financial Services Ombudsman and the Pensions Ombudsman). The FSPO can resolve the matter informally through mediation or provide formal complaint resolution, which is legally binding and may be appealed to the High Court. The FSPO may award compensation of up to €52,000 per year where the subject of a complaint is an annuity, and €500,000 for all other complaints. These levels came into effect on 8 May 2018 and represent a significant increase from the previous maximum award of €250,000. The governing legislation of the FSPO, the Financial Services and Pensions Ombudsman Act 2017, allows the FSPO to publish decisions made, and in January 2019 the FSPO published, for the first time, 228 of the 234 legally binding decisions issued during 2018. In addition to publishing the full decision, the FSPO also published a ‘Digest of 2018 Decisions’, consisting of short summaries of selected decisions. In March 2019, the FSPO published a report entitled ‘Overview of Complaints 2018’, which sets out that of the 5,588 complaints made in 2018, 56 per cent related to banking products and 33 per cent related to insurance.

Compulsory insurance scheme

Investment intermediaries (under the Investment Intermediaries Act 1995) are required to hold adequate professional indemnity insurance of €1.25 million per claim and €1.85 million aggregate cover per annum (as set by the Insurance Mediation Directive). Compliance is monitored by the Central Bank.

d) Real property surveyors

Professional bodies and key regulatory and disciplinary codes and bodies

Society of Chartered Surveyors Ireland

The Society of Chartered Surveyors Ireland (SCSI) is the competent authority for the registration of quantity surveyors and building surveyors under the Building Control Act 2007, and is responsible for regulating its members. Failure to comply with SCSI by-laws may result in an action being taken by the Director of Regulation and the Professional Conduct Committee.

Property Services Regulatory Authority

The Property Services Regulatory Authority (PSRA) is responsible for licensing and regulation of property services providers (including property managers and auctioneers), including the investigation and adjudication of complaints. If the PSRA determines that a provider has engaged in improper conduct, it may caution the provider, revoke or suspend the provider’s licence or impose penalties up to €250,000. Additionally, the Property Services Regulation Act 2011 introduces offences such as providing property services without a licence, obstructing an investigation or mismanaging client funds. These offences carry penalties of up to €5,000 or 12 months’ imprisonment on summary conviction, or both, or fines of up to €50,000 or five years’ imprisonment on indictment, or both.

Compulsory insurance scheme

The SCSI requires members to ensure all work is covered by adequate and appropriate professional indemnity insurance cover.

The Property Services (Regulations) Act 2011 and the Property Services (Regulation) Act 2011 (Professional Indemnity Insurance) Regulations 2012 impose a minimum level of professional indemnity insurance of €500,000 for all property services providers licensed with the PSRA.

e) Construction professionals

Professional bodies and key regulatory and disciplinary codes and bodies

The Royal Institute of the Architects of Ireland

The Royal Institute of the Architects of Ireland (RIAI) is the regulatory and support body for architects, and the official registration body under the Building Control Act 2007. It produces codes of conduct and standards, and complaints regarding poor professional performance may be made to the Professional Conduct Committee.

Engineers Ireland

Engineers Ireland is responsible for the maintenance and development of professional conduct and standards for its members, as well as for enforcement and disciplinary actions. While membership is optional, the title of chartered engineer is reserved to members of Engineers Ireland. Complaints may be made to the Registrar of Engineers Ireland. The Registrar can refer the complaint to the Ethics and Disciplinary Board, which is responsible for enforcing the Code of Ethics. It will appoint an investigative and disciplinary panel to investigate and adjudicate on a complaint of professional misconduct. The panel may require an undertaking from the member not to repeat the conduct complained of, issue a reprimand or suspend or exclude the member from membership. The panel may also require a contribution towards the costs of the investigation and adjudication.

Compulsory insurance scheme

The RIAI requires practising members to hold adequate and appropriate levels of professional indemnity insurance.

Members of Engineers Ireland must comply with the Code of Ethics, which obliges them to maintain appropriate professional indemnity cover.

f) Accountants and auditors

Professional bodies and key regulatory and disciplinary codes and bodies

Irish Auditing and Accounting Supervisory Authority

The Irish Auditing and Accounting Supervisory Authority (IAASA) is responsible for supervising the manner in which the prescribed accountancy bodies regulate their members, including admissions, licensing, complaints, investigations and appeals. It also conducts inspections of auditors and audit firms, investigates auditors and can impose sanctions. The IAASA introduced the Ethical Standard for Auditors (Ireland) 2017, an auditing standard for use in Ireland under licence from the Financial Reporting Council in the UK.

Chartered Accountants Ireland

There are numerous accountancy bodies in Ireland, but Chartered Accountants Ireland (CAI) is the dominant body responsible for regulating members of the audit and accountancy professions. It handles complaints and takes disciplinary action against members, including for misconduct and poor professional performance.

While the CAI Council remains responsible for the regulation and disciplining of members, the CAI established the Chartered Accountants Regulatory Board to oversee the fairness, impartiality and integrity of the regulatory responsibilities of the CAI.

Compulsory insurance scheme

The Companies Act 2014 (Professional Indemnity Insurance) (Liquidators) Regulations 2016 require liquidators (regulated by the IAASA) to hold professional indemnity insurance. The Regulations require a cover of €1.5 million for each and every claim, plus defence costs, provided that this level of insurance is commensurate with the value and nature of the work undertaken by the liquidator.

The CAI requires all members to ensure they are covered by their firm’s professional indemnity insurance policy. The CAI’s Public Practice Regulations set a minimum level of aggregate cover of €2.14 million with some exceptions available. In addition, the CAI’s Public Practice Regulations were amended in October 2018 to reflect the requirements of the Insurance Distribution Directive. This amendment provides that, if a firm is a licensed firm or a firm authorised by the Financial Conduct Authority (or any relevant successor body) to conduct insurance distribution activities, then the minimum limit of indemnity required for those activities must be equivalent to at least €1.25 million for any one claim and €1.85 million in total per annum. This may form part of, or be in addition to, the minimum limit of indemnity required for the firm’s other activities. Failure to adhere to this requirement will result in disciplinary action.

g) Insurance professionals

Professional bodies and key regulatory and disciplinary codes and bodies

The Central Bank of Ireland

The Central Bank is responsible for the prudential supervision of insurance and reinsurance undertakings authorised in Ireland. Undertakings must be authorised by the Central Bank and it is an offence to engage in such activities without prior approval. The Central Bank issues standards, policies and guidance with which undertakings should comply, and has powers of enforcement.

Financial Services and Pensions Ombudsman

Complaints against insurance companies can be lodged with the FSPO, as outlined above.

Compulsory insurance scheme

Insurance intermediaries are required to hold professional indemnity insurance. This is set at €1.25 million per claim and €1.85 million aggregate cover per annum (pursuant to the Insurance Mediation Directive).

Year in review

There have been a number of High Court decisions on cases involving professional negligence in the past year.

The most notable development is the recent High Court decision in Smith v. Cunningham,¹¹ where Meenan J rejected the defendant’s argument that a professional negligence claim against an engineer and a solicitor was statute barred, despite six years having passed since a defective certificate of compliance for planning permission was prepared. The case centred around a defective certificate of compliance, prepared by an engineer in 2006, which only became apparent to the plaintiff in 2008 when he entered into a contract to sell the property. Proceedings were issued in 2014, claiming professional negligence against the engineer and the solicitor. The claim for damages made by the plaintiff related exclusively to the financial loss that arose from the inability to complete the sale of the property. In his judgment, Meenan J relied on the Supreme Court case of Brandley v. Deane. Meenan J held that the date of damage was the date on which the contract of sale was rescinded, despite the fact that the defect (i.e., the defective certificate of compliance) occurred two years earlier. This decision could result in professional negligence claims being brought outside the prescribed six-year limitation period. The case is currently under appeal.

The High Court decision in Power v. Creed¹² involved an unsuccessful motion to strike out a professional negligence claim against a chartered engineer for delay/want of prosecution. The engineer claimed that prejudice had been caused to him by having allegations of professional negligence hanging over him for so many years and as a result of which he has to notify insurers of that fact on renewal. The defendant relied on Farrell v. Arborlane¹³ where Peart J considered that the claim against the architect should be struck out in particular due to the fact that there was evidence that the architect had encountered difficulties renewing his professional indemnity insurance. However, in Power v. Creed, Baker J distinguished the case from Farrell v. Arborlane and considered that the engineer had not provided evidence that he had difficulty obtaining professional indemnity insurance.

In Rossiter v. Donlon, Barr J considered a plaintiff’s claim that a defendant doctor acted negligently and in breach of the National Breast Cancer GP Referral Guidelines by not insisting more strongly that the patient undergo further examination when she heard the plaintiff’s complaint. Having heard evidence from various experts, Barr J found that the doctor was not negligent in failing to push the issue of a breast examination once it had been declined by the plaintiff.

There have also been a number of interesting decisions of the English courts in the past year, in particular in relation to the extent to which, and to whom, professionals can be held liable for losses. For example, the decisions of the Court of Appeal in Manchester Building Society v. Grant Thornton UK LLP,¹⁴ and Lloyds Bank Plc v. McBains Cooper Consulting¹⁵ both applied the distinction between ‘information cases’ and ‘advice cases’ in professional negligence claims, confirmed by the earlier Supreme Court decision in Hughes-Holland v. BPE Solicitors.¹⁶ In both decisions it was held that the liability of a defendant for recoverable losses was limited to the loss for which it had accepted responsibility. In Steel v. NRAM,¹⁷ the Supreme Court considered whether a solicitor acting for a borrower owed a duty of care to a mortgage lender. The Supreme Court held that, on the facts of the case, the solicitor had not assumed responsibility to the lender and that it was neither reasonable nor foreseeable that the lender would rely on information received from the borrower’s solicitor. These cases have not yet been considered by the Irish courts, and it remains to be seen whether they will be adopted.

(i) Legislation affecting the legal profession

The Legal Services Regulation Act 2015 will involve a significant change to the regulation of the legal profession, once fully commenced. It establishes the Legal Services Regulatory Authority (LSRA), which will be responsible for regulating the provision of legal services by barristers and solicitors. It also establishes a Legal Practitioners Disciplinary Tribunal, which will hear complaints against solicitors and barristers. The Act also provides for a mediator to assist in the complaints procedure and, failing this, a determination to be made by the LSRA. It introduces new practice structures and a new costs system. Currently, the only provisions that have been commenced relate to the establishment of the LSRA, a report by the LSRA on the operation of multidisciplinary practices, and public consultation on operation of legal partnerships and issues relating to barristers.

(ii) Legislation affecting banking and finance professionals

A new office of the FSPO was created by the Financial Services and Pensions Ombudsman Act 2017, which came into force on 1 January 2018. Notably, the Act also extends the limitation period for customers to bring a complaint against a financial services provider regarding long-term financial services to either six years from the date of the conduct giving rise to the complaint, or three years from the date on which the person making the complaint first became aware or ought to have become aware of that act or conduct, or such longer period as may be permitted by the FSPO. The matter complained of must have occurred during or after 2002.

The FSPO may award compensation of €52,000 per annum where the subject of the complaint is an annuity, or €500,000 in respect of all other complaints. This is an increase from the previous maximum level of compensation, which was €250,000.

The Minimum Competency Framework comprises the Minimum Competency Code 2017 and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1) Minimum Competency) Regulations 2017. It sets out minimum professional standards for persons providing financial services. It also sets out base levels of qualification and experience for staff of financial services providers.

(iii) Legislation affecting medical practitioners

The Medical Practitioners Amendment Act 2017 Act introduced a mandatory requirement for doctors in private practice to hold professional indemnity insurance (with limited exceptions). Doctors in the public health service are covered under the state’s clinical indemnity scheme.

The Civil Liability Amendment Act 2017 was enacted on 22 November 2017, and Parts 2 and 3 of the Act commenced on 1 October 2018. The Act introduces a legislative basis for the courts to make periodic payment orders in catastrophic injury cases. Periodic payment orders allow a plaintiff to have the compensation paid in a series of index-linked payments, over the course of the plaintiff’s life, limiting the possibility of being undercompensated. New Rules of Court have been introduced in the Irish courts to facilitate the making of periodic payment orders. These new Superior Court Rules came into force in Ireland on 31 October 2018, and the first formal periodic payment order was granted in February 2019.

(iv) General Data Protection Regulation

The General Data Protection Regulation (GDPR) came into force on 25 May 2018, making data protection a priority issue for professionals. The GDPR will have wide-ranging implications for professionals, most notably for solicitors, banking, finance and insurance professionals, given the nature of the data they hold in relation to their clients. In essence, the GDPR strengthens existing protections and introduces new rights for individuals. The obligations that will be imposed on professionals include ensuring appropriate record-keeping and implementing adequate security standards, which will involve cost implications, as well as the possibility of regulatory recourse in the event of a breach.

The Data Protection Act 2018 was signed into law on 24 May 2018 and is intended to give further effect to the GDPR in Ireland and to transpose the accompanying directive into Irish law. The Act outlines additional details regarding the technical and organisational measures that should be implemented to comply with key obligations.

Outlook and future developments

(i) Cyberattacks

Cyberattacks have been on the rise and it is likely that there will continue to be an increased number of cyberattacks against professionals, particularly those who manage client funds or hold valuable data. Law firms hold a vast array of sensitive information on their servers, from intellectual property to medical records and bank details. This information is highly valuable and recently law firms have become popular targets for cyberattacks. The Garda National Cybersecurity Bureau has advised the Law Society of Ireland that various cyberattacks on Irish law firms have been reported recently, with a surge in cyberattacks resulting from business emails being compromised, and has warned of an ongoing campaign against legal firms in Ireland. These attacks appear commonly to be phishing attacks; however, they can also take many other forms, such as using ransomware to lock firms out of their information and firms being targeted by cybercriminals seeking information on mergers to be used for inside trading. Under the GDPR, firms are obliged to report a cyber-breach within 72 hours, which will open the firms up to significant reputational damage, as well as the potential for negligence actions, and, if the firm is in breach of GDPR standards, it may be liable for fines of up to 4 per cent of annual global turnover or €20 million (whichever is greater).

(ii) Increased use of technology

Emerging technologies also present opportunities and challenges for professionals. Automation is increasingly a feature of professional life and various professions, including the legal profession, are investing in new technologies and automation.

The use of commercial drones is increasing in the construction industry, particularly among surveyors. The technology surrounding drones is rapidly developing and, to mirror the emerging technology in this area, legislative reform is proposed. The draft Small Unmanned Aircraft (Drones) Bill 2017 proposes to place an obligation on commercial drone operators to have insurance in place, and imposes criminal liability for certain drone offences. It prohibits the use of a drone for surveillance, capturing images, videos, etc. where there is a reasonable expectation of privacy, and without consent. There is currently no timeline for implementation.

In the insurance sector, in future there is likely to be litigation challenging the claims decisions made by automated claims-processing systems and regarding the interpretation of the specific GDPR articles that confer rights on individuals in relation to automated decision-making.

(iii) Limitation periods

Following the decision of the Supreme Court in Brandley v. Deane & Anor,¹⁸there is potential for claims being successfully brought against construction professionals outside the traditional six-year limitation period on the basis that the damage in question manifested at a later date, and this may lead to an increase in claims by plaintiffs who previously believed their claims were statute-barred. It is unclear whether the decision in Brandley v. Deane & Anorwill apply to non-property damage claims. The High Court case of Smith v. Cunningham appears to apply Brandley v. Deane & Anor to claims for financial loss, however, as noted above, this case is currently under appeal. An extension of the limitation period applicable to claims brought before the FSPO in respect of long-term financial services may also lead to an increase in claims previously thought to be statute-barred being brought against financial services providers.

Footnotes

¹  The information in this chapter is accurate as of May 2019.

² [2000] Lloyd’s Rep PN 823.

³ [1989] ILRM 400.

⁴ [1985] IR 232.

⁵ [2010] 4 IR 605.

⁶ [2010] IEHC 313.

⁷ Carroll v. Clare County Council [1975] IR 221.

⁸ Finlay v. Murtagh [1979] IR 249.

⁹ [1997] AC 191.

¹⁰ For example, Kelleher v. O’Connor [2010] 4 IR 380, ACC v. Johnston [2011] IEHC 376.

¹¹ [2018] IEHC 600.

¹² [2018] IEHC 688.

¹³ [2015] IEHC 535.

¹⁵ [2018] PNLR 23.

¹⁴ [2018] PNLR 27.

¹⁶ [2017] 2 WLR 1029.

¹⁷ [2018] 1 W.L.R. 1190.

¹⁸ [2017] IESC 83