The Competition Authority could be facing a legal bill of up to €3 million - half its 2007 budget - resulting from an unsuccessful court action against credit unions. Barry O'Halloranreports.
The Supreme Court yesterday ordered the authority to pay the costs of the case it took against the Irish League of Credit Unions (ILCU) claiming that a savings protection scheme operated by the organisation was anti-competitive.
Following the hearing, an authority spokesman said that it did not know what the final bill would be as it had no way of knowing what the ILCU's costs were. However, sources told The Irish Times that the final tally could run to somewhere between €2 million and €3 million.
The authority's budget for this year is €6.1 million.
The authority's spokesman said that it would wait until the ILCU had informed it what the organisation's legal bill is.
"If we are not happy with that, we can always go to the High Court taxing master," he said.
The taxing master can rule on costs in cases where there is a dispute. The spokesman pointed out that the Competition Authority did not hire external solicitors, and instead used its own in-house lawyers.
However, it did hire barristers for both the High Court and Supreme Court hearings, which took a total of 14 days.
The Competition Authority, the State's monopolies and price-fixing watchdog, took the action in the High Court earlier this year following a complaint.
It alleged that by offering a savings protection scheme, a type of insurance policy designed to protect member credit unions' assets, it was abusing a dominant position in the market.
The authority based its claim on the fact that a credit union has to be an ILCU member to get access to the protection scheme. It is not a breach of competition law to have a dominant position in a given market, but it is against the law to abuse it.
The Competition Authority was not prosecuting the ILCU, but was taking a civil case seeking an order that it stop abusing its position.
While the High Court ruled for the authority, the Supreme Court ruled against it in May, following an appeal lodged by the ILCU.
The judgment stated that in future, the authority should produce "cogent factual evidence" to support any case it brings to court. Commenting yesterday, ILCU legal officer John O'Halloran, said it was "wholly unsatisfactory" that the authority could allege anti-competitive behaviour without producing factual evidence.
