Fáilte go...Irish maritime law

"BEFORE we go any further, it is important to point out that Ireland's maritime industry is very small, but we provide the very best maritime lawyers you will find anywhere," says Vincent Power, a partner in Dublin-based A&L Goodbody. This comment reflects the general feeling among the maritime lawyers in a country where, until recently, it was a struggle to encourage companies to select Ireland as a jurisdiction for any maritime-related business. The last ten years has seen a mass of legislation enter force, however, and the level of government support for the country's maritime industries increase appreciably.

Maritime law in Ireland is dominated by ship arrest, closely followed by ship finance, and claims for loss and damage. "We also get a lot of appointments from overseas law firms and P&I clubs in the UK," says Petria McDonnell, senior partner in the shipping department of leading law firm McCann Fitzgerald. Local knowledge has a large part to play in referred business. "Referrals are very important for overseas law firms requiring local expertise," says Petria. "There are differences in our legal system that only local experts are aware of."

Irish maritime law has come of age, leaving behind a period when the 1894 Merchant Shipping Act was the industry's bible. This legislation, while still the mainstay of Ireland's maritime law, has been supplemented by a host of new acts designed to fill the gaps in the old law and to reflect the country's growing reliance on the sea as a means of facilitating international trade. But Irish maritime law has inherited some problems, too, mainly involving size. "People are inclined to over-exaggerate what they do in this area because Ireland is a small maritime jurisdiction," says Vincent Power. Ireland's fleet is small, so work mainly centres on arrest, or cargo claims."

Petria McDonnell also points to the lack of an established shipping heritage as a problem. "I have no doubt that Ireland's importance as a forum will grow, but we have the disadvantage of not having a big native shipping industry to begin with," she says.

Rather than ignoring the problems, the Irish government and organisations like the Irish Maritime Law Association have decided to tackle them head on. "The IMLA has started encouraging members to include Ireland in their arbitration clauses," says McDonnell, who is also on the IMLA executive committee, "and Ireland has speed and cost advantages." Lawyers just need to co-ordinate their efforts to exploit that potential.

The government is keen to encourage more shipping into the country. "Shipping legislation has undergone a revolution since the 1980s," McDonnell explains. "Although mainly in answer to a series of losses along the coast, this is also a response to increasing political awareness of the coastline's vulnerability to pollution from marine sources."

Recent legislation includes the Merchant Shipping (Miscellaneous Provisions) Act 1998, the Sea Pollution (Amendment) Act 1999, and other acts designed to make Ireland more appealing to shipping interests, and to promote it as a forum for hearing maritime disputes.

Infrastructure to support arbitration/litigation is already in place, with a purpose-built arbitration suite in the building of Ireland's Law Society having recently been opened. "The arbitration suite has huge potential," says Michael Carrigan, senior litigation partner at commercial law firm Eugene F Collins, and former chairman of the Chartered Institute of Arbitrators in Ireland. "We have already fielded enquiries from overseas." Carrigan is also author of the Irish Law Society's publication, Handbook on Arbitration in Ireland. He believes in Ireland's potential as a forum for dispute resolution. "We have a strong background in arbitration here, not necessarily in shipping, but when it arises, dispute resolution can be accommodated very easily," he says.

Carrigan points to Ireland's ratification of the UNCITRAL Model Law last year. "The Arbitration (International Commercial) Act 1998 adopts the model law in its entirety," he says. "Amendments are added in appendices, but the main body of the text is unchanged. This means that countries applying for arbitration in Ireland can do so safe in the knowledge that the law applied will be the same law they have agreed to, without amendment.

It is this effort to change with the times that will encourage more business. Owen O'Sullivan, a litigation partner in Dublin-based William Fry, thinks that Ireland's advantages will mark it out from the rest. "Our proximity to London helps of course," he says, "but Ireland also has other commercial advantages that companies seeking dispute resolution might opt for."

Petria McDonnell lists these advantages as, "Proximity to London, the ease of access to experts, and fewer and less-expensive overheads, allowing us to provide better-value arbitration than some other shipping centres."

O'Sullivan adds, "It is certainly helpful to know that the government hasn't just forgotten about shipping in its hunger to develop other sectors of industry in the country."

As further evidence of the government's commitment to the maritime industries, the Minister for the Marine and Natural Resources, Michael Woods, recently announced the setting up a new development body to promote the Irish shipping industry. The Irish Maritime Development Office will promote the Irish fleet, consolidate and develop employment at sea, and make Ireland attractive for ship registration.

When Ireland ratified the Limitation of Liability Convention, it brought the country into the modern world of commercial reality, no longer dependent on the1894 act.

Reasons for further change involve membership of the European Union, which has already affected Ireland when the EU ruled that its legislation breached competition rules. "The legislation prevented other European owners from registering vessels under the Irish flag if they were not based here," says Petria McDonnell. This situation was reassessed in the drafting of the Merchant Shipping (Miscellaneous Provisions) Act 1998, making the Irish register more accessible to other EU-based companies.

Seafarers' pay has also been addressed in the new legislation, with proposed changes to the country's existing 'pay as you earn' tax system designed to encourage more Irish people into shipping. The government has secured EU approval for the Seafarers Employer PRSI Refund Scheme, which is expected to give IR£2 million back to shipping company employees each year.

Ireland has made major changes to its shipping legislation in a short period of time. But has it made any difference to the amount of maritime work Irish law firms see? "The impact of the new legislation has led to a increase in the amount of business we receive from maritime appointments," says Petria McDonnell, "but not enough to justify partners specialising in one area of marine work." Irish maritime lawyers work in all areas of shipping.

But there are other reasons to explain the slow uptake in new work. Michael Carrigan points out, "The reason there has been so little new work since the legislation came into effect is that we are trying to promote Dublin as the stated jurisdiction in contract disputes. This has to be written into contracts now, but claims may not be made for a number of years. "

But even this may not bring a huge increase in the arbitrations going through Dublin. Petria McDonnell highlights the effective court system in Dublin, where cases can be heard quickly. "A designated admiralty judge sits in Dublin," she explains, "and because there is relatively little marine work for the admiralty court, shipping cases can be heard in court faster than they can in more traditional shipping centres."

Dates for hearings are given for the near future. This provides obvious cost advantages. McDonnell says, "There is no need to pay for the travel, accommodation, or fees of an arbitrator, as the judge is already in place. And the rulings are legally binding. But it is the speed with which cases can be heard here that will encourage contract terms stipulating Irish jurisdiction."

Michael Carrigan agrees. "Dispute resolution in Ireland usually ends before reaching the courts," he says. "If companies agreed to submit to Irish jurisdiction before signing the contract, a lot of time and energy would be saved, with resulting cost savings for the parties involved." Carrigan also favours an increase in the number of recognised mediators used in the industry.

There is a visible change sweeping all areas of industry in Ireland. But, in shipping, it is the rapid development of law firms that stands out. As the government has supported change in the shipping industry, the law firms in Dublin have been quick to realise that a new market is opening up. "The problem is breaking into the business," says Owen O'Sullivan. "Some firms have been concentrating resources on shipping for years, while others have only taken marine work when asked to do so by clients or overseas affiliate offices."

Of the law firms that haven't moved into shipping, William Fry is probably the largest. "We maintain good relationships with other law firms which have substantial shipping practices," says O'Sullivan. "When they request it, we do marine work for them. But we don't actively seek it at the moment. When new legislation starts to bite, and more arbitration or mediation work comes into the country, we will reassess our business in the maritime field.

"Unfortunately, because the Dublin market is so small, we would have to import a specialist marine lawyer to fill any vacancy. It is a long-term commitment."

Ireland has potential. Its main problem is how to encourage more business. Construction arbitration has been a major source of work in recent years, but it is the shipping industry that most lawyers realise they must capitalise on.

The infrastructure to successfully and quickly hear maritime disputes is already in place. Growth will continue, slowly. But expect Dublin to give other, more currently fashionable forums, a run for their money.