Depleted Legal Profession or Banking Faults?

ID@THEWIDOWS

Attitudes towards, and perceptions of, the legal profession in Ireland have changed considerably in recent times. While the profession, in times gone by, was deemed a reputable and distinguished profession, the unscrupulous dealings of a number of, shall we say, 'rogue practitioners' have eroded the high regard in which the profession was held.
Such instances of dishonourable conduct are readily available through out the media, none more so than the dealings of Michael Lynn and Thomas Byrne. Both of the aforementioned parties eluded the policing of the Law Society for a number of years, and indeed, manipulated the banks into numerous illicit dealings that can only be described as a failure to provide a system of checks by those institutions.
Not condemning the actions of these parties, the failure of the bank to do so, left a legacy for illicit conduct to be exploited. When the likes of Michael Lynn and Thomas Byrne received such loans, there were considerable bonuses handed out to the banking executives, who attracted and awarded such loans. The question arises: If these Bankers had a system to provide such checks and balances of awarding loans would we be in this position today?
Clearly this should be a two-way street; the Banks owe a duty of care to its borrowers not to give out excessive loans and are instituting numerous High Court actions for redemption of loans that have defaulted. Clearly, this lack of regulation was only waited to be exploited. It was a pity that it was exploited by professionals who had the Gaul to call themselves members of the legal profession.
. Let it be clear, that there is no relationship with Michael Lynn and Thomas Byrne only the profession that they shared, that of both being registered solicitors. The Law Society alleges that there are shortfalls in the client account of the former, whereas the latter had his practice closed by the Law Society for his unscrupulous dealing.

All views on this, or any matters relating to the lack of regulation would be greatly appreciated

Delancey

There clearly were failings by both the Law Society and the banks in relation to Lynn and Byrne. Those 2 solicitors had long before come to the attention of the Law Society through complaints and Client Account irregularities yet they continued to practice , a complete lack of checks by the banks allowed these men to run up the huge borrowings they did.

It raises the obvious ( and frequently asked ) question of whether the Law Society is the right body to regulate solicitors given that it has a dual mandate in that it also acts as a representative body for the profession.

It is clear the financial regulator was tame and ineffective in dealing with banks - time will tell if that has changed

It's worth noting that Mr Justice Johnson when dealing with the Lynn case in the High Court repeatedly asked the banks to supply details of bonuses paid to bank staff who had dealings with Lynn - the banks failed to provide this information.
As that judge has now retired it would be great to see the next Judge handling that case insist on the information being given to the court.

Bosco boy

What's going to change? There will be a lot of talk about regulation etc but vested interests will win out and nothing will be done, corruption will be allowed to continue, pity for the decent people in the profession who are tarred with the same brush!

dermot_sheehan

...the Banks owe a duty of care to its lenders not to give out excessive loans

This was argued recently in the commercial court and fell flat on its face.

Quite simply if there was a cause of action for "reckless lending", there would be no certainty in the economy.

Parliament, by statute through the Consumer Credit Act already places restrictions on lending to consumers.

There is very little restriction on lending to business since businesses are generally not subject to the same protections as consumers are. If I want to take a risky business decision, that's part and parcel of running a business. I may be rewarded by large profits or my business may fail.

ID@THEWIDOWS

I agree with both your sentiments. I think the era of corruption and collegiality should come to an end. The whole idea of IL scratch your back if you scratch mine should be eradicated and better policed. I find that there has been instances of accepted cute whoreism in Irish politics which has been manifestly led by the last few fianna fail governments.

It is trite to say that there was, and still is, numerous vested interests, that intertwine our banking, legal, and indeed out government. Should such a disregard for the people of our counterparts in France or Germany be treated like this, there would be mass demonstrations and some one would be held accountable for this flagrant disregard of high ranking positions.

Unfortunately, many of these high ranking governmental posts are held by members of the profession, and the ordinary 'Joe soap' can see that, and are tarring us all with the one brush.

Victor

ID@THEWIDOWS wrote: »

Clearly this should be a two-way street; the Banks owe a duty of care to its lenders not to give out excessive loans

Do you mean lenders or borrowers?

ID@THEWIDOWS

Borrowers sorry,

I am very disgruntled with the fact that the Banks are being very aggressive in seeking foreclosure on loans for both commercial and residential loans that have defaulted and are allowing very little leeway for borrowers to manouvere.

Obviously, the banks clearly state in their loan agreements that failure to keep up payment will result in foreclosure but many of these customers have failed to be properly advised on the severity of such loans and banks have lended excessivly without due regard to many of the mortgagee's actual assets and liquidity. I take on board that it is a risk in business but it seems that is has transfered across the constitution of banking lending and this should not be solely the fault of the consumer or indeed business owners.

coylemj

ID@THEWIDOWS wrote: »

Attitudes towards, and perceptions of, the legal profession in Ireland have changed considerably in recent times. While the profession, in times gone by, was deemed a reputable and distinguished profession, the unscrupulous dealings of a number of, shall we say, 'rogue practitioners' have eroded the high regard in which the profession was held.

I think you have your head in the clouds when it comes to the legal profession, go to any small town in the country and people will tell you about rogue solicitors who sat on a client's money for as long as they could or were guilty of gross negligence or were downright crooks.

The legal profession is one of the few (along with stockbrokers) where a professional practitioner often ends up handling huge amounts of other people's money. The doctor might have your life in his hands, the accountant can add up your money but it's the solicitor who actually gets his hands on your cash from time to time and for as long as the temptation has existed there have been rogue solicitors who have squandered clients' money because of gambling, drink or pure recklessness.

ID@THEWIDOWS

While I agree with what your are saying to a certain extent, the number of decent hardworking and reputable solicitors outthere, far outweigh the rogue ones. In times past the solicitor was held in high esteem and often or not was entrusted with these high denominations of cash.

My point is that I think that these rogue traders should be fettered out of the profession with life time practicing bans from the profession if caught doing anything sufficiently irregular as to warrant the ban.

A pertinent point given above is the fact that a group of solicitors should not be policing another group of solicitors when they fail in their obligations, as is the situation at present. More audits should be carried out aswell as is the case at present.

shaneybaby

ID@THEWIDOWS wrote: »

My point is that I think that these rogue traders should be fettered out of the profession with life time practicing bans from the profession if caught doing anything sufficiently irregular as to warrant the ban.

The back pages of the law gazette are full of such people. I don't think michael lynn et alia will ever be practicing here again....

ID@THEWIDOWS wrote: »

A pertinent point given above is the fact that a group of solicitors should not be policing another group of solicitors when they fail in their obligations, as is the situation at present. More audits should be carried out aswell as is the case at present.

Perhaps there should be an independent body over solicitors but unfortunately to actually understand how and why a solicitor would have done whatever it is he/she has done then you'd have to be somewhat versed in the process yourself.

As for audits, i'm not around long enough to be saying they do a lot, but it seems that they're not too shy about telling people to get their house in order as opposed to turning a blind eye.

coylemj

ID@THEWIDOWS wrote: »

While I agree with what your are saying to a certain extent, the number of decent hardworking and reputable solicitors outthere, far outweigh the rogue ones.

Agree 100%

ID@THEWIDOWS wrote: »

In times past the solicitor was held in high esteem and often or not was entrusted with these high denominations of cash.

The solicitor wasn't entrusted with the money because he was held in high esteem, he got to handle the money because that was/is how the system works.

ID@THEWIDOWS wrote: »

My point is that I think that these rogue traders should be fettered out of the profession with life time practicing bans from the profession if caught doing anything sufficiently irregular as to warrant the ban.

A pertinent point given above is the fact that a group of solicitors should not be policing another group of solicitors when they fail in their obligations, as is the situation at present. More audits should be carried out aswell as is the case at present.

Can't argue with that

johnnyskeleton

gabhain7 wrote: »

This was argued recently in the commercial court and fell flat on its face.

Is there a written judgement to that effect? I know it has been thrown about from time to time, but has it been fully argued and ruled against?

FreudianSlippers

ID@THEWIDOWS wrote: »

The whole idea of IL scratch your back if you scratch mine should be eradicated and better policed. I find that there has been instances of accepted cute whoreism in Irish politics which has been manifestly led by the last few fianna fail governments.

It is trite to say that there was, and still is, numerous vested interests, that intertwine our banking, legal, and indeed out government. Should such a disregard for the people of our counterparts in France or Germany be treated like this, there would be mass demonstrations and some one would be held accountable for this flagrant disregard of high ranking positions.

Unfortunately, many of these high ranking governmental posts are held by members of the profession, and the ordinary 'Joe soap' can see that, and are tarring us all with the one brush.

If you think that this is a uniquely Irish thing and/or that this is not going on rampantly in other countries (look at the USA for example) you are sadly mistaken.

Reloc8

johnnyskeleton wrote: »

Is there a written judgement to that effect? I know it has been thrown about from time to time, but has it been fully argued and ruled against?

Yes - not that recent actually.

ICS Building Society v Grant - Charleton J 26 January 2010 [Neutral citation 2010 IEHC 17)

"The argued for tort of reckless lending does not exist in law as a civil wrong. It is not within the competence of the court to invent such a tort. The Oireachtas could if it saw fit pass a law creating a civil wrong. It is difficult to imagine the parameters of such a law since those who seek a loan will have a view as to what should be borrowed, and if a loan is badly made by the bank how can the issue of contribution be escaped by the borrower who sought the money in the first place ?"

johnnyskeleton

Reloc8 wrote: »

Yes - not that recent actually.

ICS Building Society v Grant - Charleton J 26 January 2010 [Neutral citation 2010 IEHC 17)

"The argued for tort of reckless lending does not exist in law as a civil wrong. It is not within the competence of the court to invent such a tort. The Oireachtas could if it saw fit pass a law creating a civil wrong. It is difficult to imagine the parameters of such a law since those who seek a loan will have a view as to what should be borrowed, and if a loan is badly made by the bank how can the issue of contribution be escaped by the borrower who sought the money in the first place ?"

Thanks for that, although it wasn't fully argued there, as the argument there was why should the borrower have to pay when the taxpayer was bailing out the banks. There was no real question of reckless lending. Also, it was a commercial rather than residential mortgage.

It will be interesting to see what happens of those new beginnings cases. I believe they are arguing that a statutory duty arises from the consumer credit act.

Reloc8

Fair point johnny - the isolated passage does however deal with the concept of a reckless lending style tort. I'm not convinced the status of the transaction as a commercial versus consumer matter is net to the principle.

The problem (in my opinion) with the argument regarding statutory duty arising from consumer credit act is that this is very likely to fall foul of the 'duty owed to the world at large' preclusion (Glencar decision), presuming that other legislative requirements are complied with.

bozley

A personal experience of the slackness of both (certain) solicitors and reputable banks. Purchased a brand new house in 2005, fast forward 5 years after major problem with house, we discovered we had no compliance certificate which was a fundamental part of the contract. We actually had a draft cert which stated house was compliant when in fact it breeched a major condition and was effectively worth nothing. Point is, bank released 250,000 without even requesting said certificate, which again was a condition of the mortgage. We're in the process of legal action against solicitor for failure to get cert. This is another example of the lacksidaisy celtic tiger! :rolleyes:

ViP3r

johnnyskeleton wrote: »

Thanks for that, although it wasn't fully argued there, as the argument there was why should the borrower have to pay when the taxpayer was bailing out the banks. There was no real question of reckless lending. Also, it was a commercial rather than residential mortgage.

It will be interesting to see what happens of those new beginnings cases. I believe they are arguing that a statutory duty arises from the consumer credit act.

Myt be an economic disaster, but the courts could always calculate the amount on the individuals head given in tax to the banks and deduct it from the mortgage??

Gazzetta

johnnyskeleton wrote: »

Thanks for that, although it wasn't fully argued there, as the argument there was why should the borrower have to pay when the taxpayer was bailing out the banks. There was no real question of reckless lending. Also, it was a commercial rather than residential mortgage.

It will be interesting to see what happens of those new beginnings cases. I believe they are arguing that a statutory duty arises from the consumer credit act.

But according to the judgement there was apparently no discussion of contributory negligence. I'm not suggesting it's a panacea, but at least a discussion can get passed whether or not it exists. In theory acting recklessly could just be treated as an act of contributory negligence.