The Supreme Court dismissed an appeal by solicitor Giles J. Kennedy against the refusal of his damages claim against the Law Society of Ireland and two of its officers.
The appeal concerned whether the Society was liable in damages for investigating suspected fraudulent claims through a process that the Supreme Court had previously found was not authorised by the Solicitors Accounts Regulations 1984. The earlier ruling had left the question of damages for the High Court to consider. It did not establish that Kennedy was entitled to compensation.
The investigation had two purposes: to check compliance with the accounts regulations and to examine suspected litigation processed by Kennedy’s practice. The second purpose was not disclosed at the outset. In earlier proceedings, the Supreme Court held that investigating fraudulent claims was not an authorised purpose under those regulations. It also said that evidence acquired unlawfully might still be relied on if it could have been obtained lawfully, absent evidence of deliberate and known abuse.
After the case returned to the High Court, Kennedy sought to amend his claim to add causes of action and substantially increase the damages sought. The High Court refused that application on 14 February 2003, and no appeal was brought against that order. The Supreme Court said that refusal could not be challenged through the appeal before it.
The High Court then considered whether the Society had committed misfeasance in public office, negligence or breach of statutory duty. The Supreme Court said that lack of statutory authority alone did not give rise to damages. For misfeasance, the relevant question was whether the Society acted in bad faith, including with actual knowledge that it lacked authority or reckless indifference to that possibility and likely harm.
The Supreme Court upheld the High Court’s finding that Kennedy had not proved misfeasance on the balance of probabilities. The High Court had relied on evidence supporting a basis for investigating, the Society’s prior use of the regulations in similar investigations, and its explanation that the undisclosed purpose was intended to prevent files from being removed or altered. The Supreme Court found no basis to interfere with the High Court’s factual findings or inferences.
The court also rejected the appeal grounds based on negligence and breach of statutory duty. It said the negligence case had not been properly pleaded and that an alleged failure to obtain independent legal advice had not been raised at trial. The judgment did not award damages; the appeal was dismissed.