The Gazette 1988

GAZETTE INCORPORATE D LAW SOCIETY OF IRELAND

GAZETTE

JUNE 1988

In this Issue Viewpoint Date of Discoverability Rule and s.11 of the Statute of Limitations

Vol.82 No.5 June 1988

Viewpoint Since the introduction of Value Added Tax it has been the norm for luxuries to be charged at the highest rate of tax. This rate is currently 25%. It is not unreasonable to expect that those who wish to spend their money on luxury goods or the provision of luxury services should pay a higher rate of tax than is levied on necessary goods or services. The rate of VAT on legal services is 25% — equating them with luxuries. People choose to buy luxuries or to have luxury services provided for them. The legal services they require do not constitute luxury. Buying a home is not a luxury. Bringing a law suit to protect one's rights or to claim compensation for personal injuries is not a luxury. Even less is defending a claim, which may have been unjustly brought against one, a luxury. By establishing both Criminal and Civil Legal Aid Schemes, however inadequately funded the latter may be, the State has recognised that citizens w i t h inadequate means should have access to legal advice and assistance. Neither of these Schemes are luxuries for those who are entitled to avail of them and yet VAT charges are attached to them as if they were. The Society's former President, David Pigot, drew attention last year to the discriminatory element of VAT on legal services. It is the ordinary man in the street who actually pays VAT. The former President estimated that the cost of access to the Courts for a person registered for VAT was some 20% less than for a non- registered person. This appears to be a clear discrimination against those who are not registered for VAT. The trader or the limited company, large or small who use legal services, will be registered and can recover the VAT charge. The ordinary individual making a Will, taking out a probate to a father's estate or paying the cost of litigation ends up paying the full charge The rate of VAT on legal services is the highest in any EEC country. Harmonisation of VAT rates may bring about a reduction, but there should be no need to have to rely on the EEC to right this wrong.

Some clients may believe that it is the solicitor who pays the VAT since it appears on his bill. Of course this is not the case — the solicitor is in the usual position for the profession, that of unpaid collector of taxes or duties for the State. Non-commercial clients have no lobbies working for them precisely because they are ordinary individuals — they have no organisations wh i ch can bring pressure to bear on their behalf to lessen this impact. It behoves the legal profession to continue to speak out on behalf of these citizens and draw attention to the inequity of a system which is so clearly discriminatory. In the same speech Mr. Pigot drew attention to another iniquitous burden, this time on house buyers, namely, the high level of stamp duty payable on house purchases. The modest concession in the 1988 budget has hardly relieved the position significantly. The concessions in stamp duty and the grants given to purchasers of new houses have a discriminatory effect. To exclude second hand houses has the inevitable result of driving first time purchasers out to the suburbs of our cities and towns where most new private housing can only be found. The renewal and revival of the older areas of our towns and cities should be assisted by taxation concessions, not made more difficult. Even in the suburban areas the concessions and grants have a distorting effect on the market. A person who has to sell a second hand house on a housing estate which is still being developed cannot hope to achieve the same price for his or her house as the asking price of the new houses on the estate given the stamp duty savings and grants which are available to buyers of the new houses. If first-time buyers are to be given financial incentives to buy houses then those incentives should apply to all houses and not just new ones. A change to this policy would encourage the purchase and renovation of second hand houses and avoid the distortions of the market in housing estates.

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From the President Correspondence Personal Injury and motor accidents in Spain People & Places

135 138 141 142 142

Practice Notes

Younger Members News

For Your Diary

Companies (No. 2) Bill, 1987, Seminar Civil Liability for Communication of AIDS - a Moot Point

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145 147 153

Book Reviews

Professional Information

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Executive Editor: Mary Gaynor Committee: Geraldine Clarke, Chairman

Seamus Brennan John F. Buckley Gary Byrne Michael Carrigan Jim Hickey

Nathaniel Lacy Frank Lanigan Charles R. M. Meredith Desmond Moran

Daire Murphy John Schutte Maxwell Sweeney

Advertising: Liam O hOisin. Telephone: 305236 307860 Printing: Turner's Printing Co. Ltd., Longford. The views expressed in this publication, save where otherwise indicated, are the views of the contributors and not necessarily the views of the Council of the Society. The appearance of an advertisement in this publication does not necessarily indicate approval by the Society for the product or service advertised. Published at Blackhall Place, Dublin 7. Tel.: 710711. Telex: 31219. Fax: 710704.

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