The High Court has heard deregulation of the taxi industry had devastating consequences for drivers who saw the value of their licences wiped out overnight.

Three drivers, Vincent Malone, Thomas Kelly and Alphonsus Muldoon are suing the Minister for the Environment and Dublin City Council over the manner in which the market was liberalised 13 years ago.

Theirs are test cases, which depending on the outcomes, may lead to hundreds of more claims.

Opening proceedings, Michael Collins SC, for the taxi drivers, said some in the industry had paid between £80,000 and £100,000 for a license prior to the liberalisation of the market and some had even mortgaged their homes against the cost of the plate.

Outlining the 'long and tedious' history of taxi regulation in Ireland, he said by the 1990s local authorities were failing in their statutory duty to issue enough licences to meet demand.

He called it a restrictive system that created a barrier to entry into the industry and resulted in high value taxi plates.

He said political and social forces along with consumer demand and the huge controversy about the restriction of taxi licences prompted new regulations in 2000.

The court heard extra licences were to be issued to existing holders along with 500 new licences which were to operate in Dublin.

However, he said the regulations were struck down in a High Court case and as a consequence, the State introduced regulations which liberalised 'almost overnight' the whole regime of the issuing of licences.

Mr. Collins said this had devastating consequences for existing license holders who believe their property rights have been affected.

He said it is the State's case that taxi drivers could still ply their trade and that there had been no infringement of their right to earn a livelihood.