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News : Irish Last Updated: Apr 9, 2013 - 10:34 AM


Tuesday Newspaper Review - Irish Business News and International Stories - - April 09, 2013
By Finfacts Team
Apr 9, 2013 - 9:13 AM

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The Irish Independent reports that a new report says the legal profession still restricts competition and that its prices are "extremely sticky" relative to other professions, and not reflective of the current economy.

Forfas, the Department of Enterprise policy body, says that while the cost of most business and professional services has fallen since 2006, legal costs have not dropped.

It says the Legal Services Bill currently making its way through the Dail needs a number of amendments.

The report recommends removing the two-tier system that divides barristers into junior and senior counsel.

About 12pc of Irish barristers are senior counsel according to the Bar Council, a position awarded by the Government to barristers who usually have over 10 to 15 years of experience.

The report says this distinction allows for higher fees to be charged by senior counsel, but does not offer a definitive guide as to the quality of the barrister in question.

The new report says that, to enhance competition, solicitors should be able to act as lead counsel when working with a barrister on a court case.

It criticises the high cost of transferring property – conveyancing – in Ireland and calls for a new of conveyancing professionals to do the work instead of solicitors. That happened in the UK in 1987.

While noting a significant reduction in business costs in recent years, the report also found that Ireland's rate of income tax for high earners, at 52pc for employees and 55pc for the self-employed, is higher than most of its competitors.

Enterprise and Jobs Minister Richard Bruton said this "damages inward investment and entrepreneurship, and makes too many people question whether they would be better off not working at all".

The Irish Independent also reports that more than 550 jobs are at stake in a bitter legal dispute over alleged trespass at the Cork offices from which the 'Irish Examiner' and 'Evening Echo' newspapers are now operating following restructuring of the Thomas Crosbie media group.

Kilquane Ltd, the landlord of the City Quarter Building at Lapps Quay, Cork, will next month apply to the Commercial Court for injunctions restraining Irish Examiner Ltd (IEL) occupying offices governed by leases between Kilquane and Examiner Publications Cork Ltd (in receivership).

Kilquane has "absolutely no interest" in dealing with IEL given its behaviour to date and "cynical" attitude concerning contractual and leasehold obligations, a solicitor for Kilquane said. The property at issue is valued at some €7.32m with an estimated rental value of €650,000 a year.

Kilquane claims Examiner Publications Cork Ltd (EPC) entered in 2008 into 20-year leases, dating from 2006, with Kilquane to occupy parts of the building over three floors and was not entitled to assign leases to IEL as part of the Thomas Crosbie Holdings (TCH) restructuring. That restructuring included EPC and various TCH companies being placed in receivership last month.

Kilquane also claims default for more than two years on rent payments with some €900,000 in outstanding arrears. Separate proceedings have been taken over the rent issues.

Michael Howard, for Kilquane, told Mr Justice Peter Kelly yesterday that his client was not interested in mediation as IEL was trespassing on the premises and rent payments had been "unilaterally halved" for some two years. The lease was between Kilquane and TCH and could not and should not have been assigned without Kilquane's consent, he said.

Any risk to jobs was created entirely as a result of the restructuring and the ignoring of obligations to Kilquane, counsel said.

The court heard IEL's solicitors wrote to Kilquane last month stating it wished to agree a new tenancy and was willing to pay, as an interim measure, some 50pc of rent due under the leases.

Kilquane refused to meet and said it would not accept a cheque from IEL for some €100,000 to cover rent from March to May 2013.

Una Tighe, for IEL, urged mediation of the dispute, stressing that 550 jobs were involved and a business continued to operate from the premises. The new company operating the 'Irish Examiner' is a highly regarded business achieving significant cost savings and it expects to be profitable by the end of this year, she said.

Mr Justice Kelly remarked what has happened to date had been "anything but an orderly transfer of property" and asked what entitlement had the occupier of the premises to be there.

Ms Tighe said her client was in possession with the agreement of the tenant although there was an issue with the landlord. There should be mediation, the dispute should be resolved and no indication had been given that any other tenant was lined up, she added.

Mr Justice Kelly made orders for the fast-tracking of the proceedings in the Commercial Court and listed the injunction application for hearing on May 8. Rent arrears issues were also adjourned to that date.

The Irish Times reports that a final decision on the adjustment of Ireland and Portugal’s bailout loans will not be reached until the May meeting of European finance ministers, Minister for Finance Michael Noonan has confirmed.

Speaking in Limerick yesterday, Mr Noonan said he had never given any assurance that the deal would be signed off in April.

“I don’t think I ever said that, but other people gave an indication that it might come to a head in Dublin.”

Mr Noonan said he hopes progress will be made at this week’s meeting of euro zone finance ministers in Dublin, but insisted it was an “informal Ecofin”.

“There will certainly be discussions about the extension of maturities at the meetings on Friday but the meeting on Friday is called the informal EcoFin and at the informal ecofin while you can progress matters to the point of a solution, you can’t take a formal decision because it’s informal, so whatever happens or whatever progress is made on Friday, the formal decision won’t be until the May Ecofin.”

While a formal decision cannot be made at Friday’s meeting, senior EU figures, including economics and monetary affairs commissioner Olli Rehn, have consistently indicated that the issue would be concluded at the April meeting. As reported in The Irish Times last week, final agreement is now likely to be delayed.

Mr Noonan’s comments came as Portugal upped the pressure on Europe to sanction the adjustment of the loans, ahead of Friday’s scheduled gathering. In a televised address on Sunday evening, Portuguese prime minister Pedro Passos Coelho said that agreement on an adjustment to the bailout loans was “decisive” for the country.

‘Determined implementation’

But the European Commission said that “continued and determined implementation” of the bailout programme was a “precondition” for a decision on the lengthening of the loans.

“The commission supports that such a decision be taken soon,” it added in a statement.

Portugal is likely to take centre stage at the meeting of euro zone finance ministers following the rejection by the constitutional court of a series of austerity measures proposed by the Government to meet its deficit reduction targets.

The court’s decision has left Portugal searching for alternative ways to generate €1.3 billion in savings, and thrown Portugal’s plan to return to the markets by the end of the year into question, with Opposition leaders calling for the government to resign.

While the court’s decision was not unexpected – it made a similar ruling last year – the scale of the measures rejected took market watchers by surprise, with the court rejecting proposed cuts to public sector pay and pensions as unconstitutional.

Portugal has already implemented a range of austerity measures as part of its €78 billion bailout programme, including steep tax rises and extra charges on healthcare.

Its economy is struggling under the weight of unemployment, with the unemployment rate expected to peak at almost 19 per cent by the end of this year. Mr Coelho ruled out any further tax rises, indicating that the savings are likely to come from the areas of health and education.

Friday’s meeting of euro zone finance ministers, which will be followed by a meeting of all 27 European Union finance ministers, is the first since the controversial Cypriot bailout.

The meeting, which will take place in Dublin Castle, will be used to showcase Ireland’s technology industry and highlight Ireland as a destination for foreign direct investment.

The Irish Times also reports that Kerry Group’s directors took home pay worth more than €6 million last year, according to the annual report.

Chief executive Stan McCarthy earned €1.8 million in 2011, but saw his pay increase to €2.02 million last year.

His pay package was made up of €979,000 basic salary, €263,000 in pension contributions, €65,000 benefits-in-kind and a performance-related bonus of €722,000. His performance-related bonus was up by nearly 5 per cent on the 2011 figure of €689,000.

His deputy – chief financial officer Brian Mehigan – took home €980,000 last year, including a performance related bonus of €327,000. His overall remuneration package was €958,000 in 2011.

Flor Healy, chief executive of Kerry Foods, got €958,000 for the year, up from €750,000 in 2011.

The fourth-top executive at Kerry Group is Gerry Behan, head of the group’s US ingredients and flavours division, which accounts for a substantial part of total group sales and earnings. He took home €1.3 million in 2012. His remuneration package, up from the 2011 figure of €1.08 million, included a basic salary of €605,000 and pension contributions of €170,000.

The four directors will see an average increase of 2.2 per cent in their 2013 basic pay. Last year the directors basic pay was increased by 1.5 per cent on average in deference to inflation.

Chairman Denis Buckley was the best-paid non-executive director at the company last year, receiving total payments of €209,000, unchanged since 2011.

The food ingredients company achieved string growth last year, increases in size by more than 2.3 times from a value of €3.5 billion in 2008 to €8.2 billion at the end of December 2012.

The company increased sales revenue by 10.3 per cent to €5.8 billion last year, while trading profits climbed 10.8 per cent to €555 million.

The Irish Examiner reports that Kinsale’s Blue Haven Food Company has been selected by the Smurfit School of Business and the Irish Exporters’ Association as a case study to develop its business into the US market.

One of the two founders of the of the Blue Haven Food Company, Cormac Fitzgerald, said he expects exports to thrive.

“We developed the Blue Haven Food Company a number of years ago, which is the food manufacturing part of our business, and we feel that this will be probably our biggest growth area for the next few years as agri-food, seafood and food exports are a massive growth sector.”

The firm will launch in Boston in the next three months after receiving intensive mentoring from the IEA and Smurfit School of Business.

Mr Fitzgerald said they could not have gone to the US without the support of the likes of Musgrave, who helped the brand gain traction.

The inclusion of Blue Haven Food Company in the selection caps off a remarkable turnaround for the company which is part of the Blue Haven Collection.

The Blue Haven Collection was served with a winding-up petition by Revenue following a tax issue. The was resolved by an agreement between both parties which resulted in 110 jobs being saved.

The company is now focused on becoming the leading supplier of quality seafood, according to chief executive Tommy Doyle.

“Our vision is to become an international food brand, producing top-quality niche seafood products for both the domestic and international market underpinned by the world renowned Gourmet Capital of Ireland, Kinsale.”

The Blue Haven Food Company represents the pinnacle of the industry, having won innovation awards in the food and beverage sector, Blás na hÉireann food awards, and the UK Great Taste Award.

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