Danske Bank is now the most aggressive financial institution in the State when it comes to pursuing its debtors through the courts for summary judgment, an analysis of official court records has shown.
Danske is more than seven times as likely as either of the pillar banks, AIB and Bank of Ireland, to resort to court action against its customers, when the number of cases is measured against the size of the banks’ loan books.
A total of 1,354 cases for summary judgment – where the plaintiff applies for a fast-track ruling from a judge without a trial or witnesses – were recorded on the High Court database in 2014 to the end of last week. Danske, which is winding down its Irish loan book, accounts for almost one in five such applications.
Banks criticised Edmund Honohan, the Master of the High Court and a brother of Central Bank governor Patrick Honohan, has repeatedly criticised banks for their increasing use of summary judgment applications in debt cases.
Mr Honohan has questioned whether the fast-track procedure gives bank borrowers a fair chance to mount a defence.
Danske has issued summary proceedings against 263 of its borrowers so far this year.
This compares to 237 for the AIB group, including its EBS subsidiary, and 245 for Bank of Ireland, including a handful by its building society ICS.
However, Danske’s gross loan book – which is in the region of €7 billion, including the €3.4 billion of loans held in its “non-core” bad bank – is dwarfed by the gross loan books of the two pillar banks.
Bank of Ireland’s gross Irish loans are about €53 billion, while AIB’s domestic book is €48 billion.
Bank of Scotland, which is also winding down its Irish operations, has filed 44 summary judgment cases this year, which suggests it may be cutting deals with many of its indebted borrowers instead of pursuing them through the courts.
Ulster Bank has filed 90 cases so far in 2014, while Rabobank-owned ACC has filed 44 summary judgment proceedings against its borrowers.
The subprime lender Start Mortgages, KBC bank, IBRC and Investec have all resorted to summary judgment in fewer than 20 cases each. Permanent TSB has filed three such cases.
Of AIB group’s 237 applications, just 78 were made in the name of its mortgage bank, suggesting it is primarily using the summary judgment tactic against other borrowers, such as small business owners, and for individual unsecured loans.
About 94 of Bank of Ireland’s 245 applications were from its mortgage bank, suggesting its approach regarding when to seek a summary judgment is similar to AIB’s.
Human rights Writing in The Irish Times earlier this year, Edmund Honohan suggested that the increased use in recent years of summary applications is not "in the interests of justice", adding that their use had been rare when he practised as a barrister.
He has described summary procedures as “plaintiff favoured” and perfunctory”, and suggested earlier this month that some Irish summary judgments could run foul of European human rights law.
“Not many [people] will know that a High Court case will often consist only of the judge reading the sworn written evidence of both sides and [summarily] judging the case on that basis alone,” said Mr Honohan.
“The number of cases being dealt with summarily is on the rise. Should we be concerned? . . I think so.”
Danske said its strategy was to work with distressed borrowers to “achieve the best outcome for both” parties.
“Legal action is only taken by the bank as a last resort in the case of a non-performing loan where the customer is not co-operating with bank,” it said.
AIB and Bank of Ireland were unavailable for comment.
