IRELAND is officially the second-most expensive country in the eurozone in which to fight legal battles as new research exposes the state's spending of hundreds of millions of euro in fees for solicitors and barristers.

A survey of 26 EU member states found that Ireland is second only to Sweden in the typical cost of a legal action between companies and some eight times more expensive than the cheapest, Cyprus.

The findings come ahead of a report likely to put intense pressure on the government over the spending of hundreds of millions in litigation fees that might be avoided through the alternative approach of mediation.

Friarylaw in Dublin has submitted Freedom of Information requests to 437 state bodies, intent on uncovering mammoth expenditure it believes could be avoided.

The findings, which will be published in full next month, show that the country could save up to €200 million a year in legal expenses if mediation was used instead of full-scale court battles.

The firm points out that, since 2000, Athlone Institute of Technology has spent over €840,000 on legal fees in employment disputes, a figure that could be reduced to just €132,000 if mediation were used.

Mediation is an alternative avenue of dispute resolution which, while potentially involving legal experts, avoids the court system and its costs.

The company also claims that 34% of the overall outlay on army deafness claims, €285 million, went on legal fees, a figure that could have been reduced to just 5%.

Between 2003 and 2007 the Commission for Aviation Regulation spent €3.3 million on legal fees, €2.7 million of which could have been saved.

Friarylaw, a company that promotes and accommodates mediation, believes it would save money without necessarily reducing profits for law firms.

Under EU direction, member states must have mediation facilities in place by March 2011.

According to its report, 'Surveying and Showing the Actual Costs of Intra Community Commercial Litigation', a dispute worth €200,000 would be fought out over 515 days at a cost of €53,800, more than a quarter of the value of the case. In Sweden the same action would cost €65,710 while in Cyprus it would cost €6,800.

According to Friarylaw, solicitors acting for the state charge around 56c on the euro.