Legal Services Regulation Bill 2011: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

Deputy Alex White was in possession and has nine minutes remaining. Other speakers who may follow have 20 minutes each. I welcome the Minister for Justice and Equality, Deputy Alan Shatter, to the House.

I was commenting on the provisions in the Bill on the independent regulatory authority. I know there is a willingness on the part of the Minister to examine reasonable suggestions on the manner in which the members of the authority should be appointed. There are reasonable suggestions in play in terms of this debate and it is important to recognise this. I commented on what I have regarded over the years as the slowness of the willingness to reform that has affected not only perhaps the professions and the Government; across the board in public life very often there is a sense that if something appears to be working why would one change it or address it. Not only for reasons of the troika intervention - if I can call it that - but for good public policy reasons it is important that these types of issues should be revisited, certainly once in every generation if not more often. It is quite fair that these issues should be addressed now.

Notwithstanding what I have said about the lethargy in attitude that one finds, there are now some very reasonable proposals, including from the professions, in respect of, for example, this question of the independent authority and how members might be appointed to it. I do not state the proposals from the professions should be taken lock, stock and barrel and adopted, or that the professions themselves would expect it, but close regard should be had to them. The Minister will be prepared to do this.

The Law Society has made a number of comments in recent days on the complaints procedure and I welcome this. I also welcome the engagement of the society in this discussion. I very much welcome the engagement of the Bar Council in this discussion. Looking at its document on alternative proposals in respect of the independent authority, it is not fair to state on any reasonable reading, that it is trying to avoid independent regulation. There are various views on the nature and type of independent regulation that should be put in place, but the proposals which have been brought forward by it and others on the independent regulatory authority are very reasonable and bear very close scrutiny. In many cases they might commend themselves to the Minister in terms of how we might proceed on that basis.

The one area of the Bill that has been universally welcomed, and rightly so, is the reforms proposed regarding costs, particularly in respect of the detailed proposals which will bring about greater transparency, supervision and scrutiny of the level of legal costs. That is a hugely important issue for public confidence in the system. People often say cynically or jokingly, particularly to lawyers, that the tribunals were the best thing that ever happened to the legal profession. I believe strongly that the tribunals were the worst thing that ever happened to the legal profession because the manner in which the fees were initially allocated and determined was damaging and wrong. In many cases the fees ended up being excessive, largely because they were based on a daily rate. That was a terrible mistake on the part of the State. The State has a very important role in the fixing of fees as a huge proportion of work is done, for example at the Bar, on behalf of the State. That was wrong, and it had a corrosive effect in terms of public confidence in the legal profession. A great deal of ground and confidence needs to be regained now by the professions in that regard. The level of fees set for the tribunals does not reflect the level of fees people earn at the Bar across the board. No one could suggest that. I accept there are a number of very-high-earning lawyers, and in many cases perhaps justifiably so, but it is not the norm by any stretch of the imagination. The issue must be addressed, and I very much welcome the principles and the provisions set out in this legislation in that regard.

I turn now to what is sometimes described as the changes contemplated in the so-called business structures in regard to the provision of legal services. Serious issues arise regarding what we as an Oireachtas and the Government should put in place in terms of the best way to have legal services provided throughout the State. We must examine that matter closely. There is provision in the Bill for a period of consultation. I hope there is not a settled position because my concern about it, whatever other people's intentions might be, is not about protection of the status quo. If it can be demonstrated that a change is in the best interests of the public and is in the public interest in terms of access to legal services, access to advice and access to court, regardless of whether the case is big or small, there is plenty of money involved or no money involved, it would be churlish and wrong to stand in the way of those changes but I do not believe that has been demonstrated and there remains a genuine concern that, for example, the more experienced practitioners, particularly at the Bar, will gravitate into specialised units, perhaps part of the existing big firms, that will undermine the current valuable access to barristers across the State.

I am in favour of the costs issue being addressed even more aggressively than is contemplated in the Bill. I do not hold any brief for most of the physical trappings of the Bar, whether they are to do with dress, address of the court or any of those issues. I have no problem with those issues being addressed but the system in place should ensure a quick level of access to expertise and that people do not have to rely on a system whereby they must go to the larger firms, and the implications in that regard for costs.

It cannot be assumed that we will reduce costs by introducing multi-disciplinary partnerships, MDPs. That has not been demonstrated. If we are talking about driving down costs that must be demonstrated. That is the reason a regulatory impact assessment is important if we are thinking about making this change. Nor do I believe that multi-disciplinary partnerships will necessarily work to the benefit of the younger, newer practitioners. A concern has been expressed rightly that we should spread the work at the Bar and the access to work across the profession. I do not see how multi-disciplinary partnerships will do that. A great deal of work must be done on it. If I have a regret about the manner in which it appears in the Bill it is that we are talking about a consultation process that is more about how we would introduce MDPs than whether we would introduce them, and the debate about whether to introduce them remains a live issue. The Competition Authority did not recommend it. A report in Northern Ireland has set its face against that. There is more work to be done on it.

I am not saying definitively that such MDPs would necessarily damage the system. I do not have the quote to hand but the Bar Council has said that if they were introduced they will damage and undermine the process. I will not go so far as to say that but it is necessary to have careful consultation with an open mind. I know the Minister would not want to see a two-tier system of legal services, and that there are other issues as well.

Whatever about the arguments about the nature of its oversight and so on, and it is a big infrastructure that is proposed and perhaps the level of insight should not be microscopic but a little more at arm's length. One of the great advantages of an authority will be that it will have the time, space and public credibility to examine all of these issues such as the desirability of multi-disciplinary practices, because they should be examined. There is no question about that but it cannot be definitively said that they are in the public interest.

I call Deputy John Halligan who has 15 minutes.

I appreciate that this sector is in need of reform. For too long costs associated with the legal sector have been far above those in the rest of Europe, for instance. The State spends approximately €500 million a year on legal services and I accept that needs to be reduced. I believe, as I am sure does the Minister, that all citizens should have full access to legal services as they require them, as is their constitutional right. I welcome especially the provisions in the Bill which will make it easier for younger new entrants to qualify either as a barrister or a solicitor. I hope this Bill will make it easier for ordinary people to challenge costs they regard as unfair and unjustifiable by means of the new office of the legal costs adjudicator. However, the Bill makes sweeping changes that are not welcome, do not stand up to scrutiny and could have a negative impact on the ability of some people to access fair justice. A rights based approach must be at the centre of any reform of the legal system.

The scale, cost and power of the five new quangos, for instance, are too extensive, particularly given the lack of detail and absence of regular impact assessment, which is needed. That does not appear to be in the Bill. Currently, 71 people are involved in regulation in the law society and one assumes the new quangos, for instance, will need highly skilled and well paid staff. What budget does the Minister envisage will be needed to staff these new quangos?

I wonder whether the variety of functions to be undertaken by the legal services regulatory authority, the office of the legal costs adjudicator and the legal professions disciplinary tribunal could be undertaken by a single agency. Has much thought has gone into that? Although no cost assessment has been made public yet, it is clear that a large body of investigators will be required and this extensive set-up will be directly responsible for solicitors passing on their costs to their clients or leaving the profession.

Regarding its independence, the legal services regulatory authority is fundamentally different from the type of regulation recommended by the Competition Authority in its 2006 report. This type of regulation is unprecedented in the EU and North America. Furthermore, it was rejected after consideration by the authorities in England and Wales due to concerns about its impact on the independence of the profession and the costs involved. That the Minister will be responsible for the appointment of seven of the 11 members of the so-called independent regulatory authority is a cause of concern in terms of its independence. That is not a slight on the Minister, but that would be the general perception in terms of its independence projects itself. I am especially concerned that there is no specific criteria for appointment to this regulatory authority unlike appointments to the Medical Council, the Dental Council and other similar regulatory bodies. The Minister for Health does not control of the newly constituted Medical Council even though the role of that council parallels in many ways that of the proposed legal services authority.

The State or a Government is a litigant or a defendant in approximately 50% of all cases. People are entitled to have a lawyer or a barrister, who is independent and not concerned with what a Government body will have to do or say, who can act free from concern in defending a citizen's rights against an organisation. For instance, a Minister may at any time decide to challenge the authority or to change the powers of the authority by means of the seven ministerial appointments. The Minister might clarify if that is the position. If that is the case, I would not consider it to be a truly independent authority. If the Minister disagrees on this point, then we are not using the same standards of independence.

The Government has a policy of publicly advertising for appointments to be made but in this case the Minister is choosing to maintain a traditional role in the establishment of this body. A study conducted by the regulatory authority argued that direct access for advice would destroy the system of independent referral, which is in the public interest and promotes access to justice. Direct access would squeeze out the smaller practitioners, even small solicitors' practices who employ a staff of two or three in their offices. Will such small business get recognition for what they do? Direct access is contentious. It is not permitted in Northern Ireland, Scotland, Wales, Australia or New Zealand. I accept the need for reform in the area but I do not know why the position here should be so different. I would like to Minister to respond to that point.

Multidisciplinary partnerships may be advantageous to some in the bigger law firms but will they be detrimental to the ordinary person seeking free legal aid? Many people have asked about this. Currently, a legal aid client can get one of the best barristers in the country but the growth of multidisciplinary partnerships will severely hamper the ability of those who do not live in the capital to access the best barristers, as has become the norm in the United States of America. We need to debate this issue further.

The programme for Government undertakes to establish independent regulation of the legal profession to improve access and competition, to make legal costs more transparent and to ensure adequate procedures for addressing consumer complaints. In terms of consultation, the Bill was published in quite a rushed manner, although I understand this was due to the pressure of the ubiquitous troika, and we all know from where that came. No regulatory impact assessment appears to have been carried out and such an assessment might demonstrate the cost benefit of the proposed new system. The Minister might respond to that point. There was no assessment or briefing as to the costs, independence of means of operation and there is considerable speculation that costs are likely to increase considerably.

I welcome the introduction of the Bill, which is timely, particularly given that considerable public concern has been voiced by other speakers about the operation of the legal profession, the costs involved and access to legal advice, and we all recognise those concerns. I to compliment members of the legal profession who regularly take on cases on a pro bono basis. In many cases, they fail to get paid and obtain compensation through the swings and balances throughout their career. We should recognise that. There are quite a number of old fashioned, traditional firms who have done that.

Another aspect that has come to my attention in recent years is the vast discrepancies in the legal profession in general where young energetic and enthusiastic solicitors or barristers find it extremely difficult to get into the business. It operates almost like a closed profession. I am not being critical of it but that is the way it has grown with the passage of time. It is sad but that is the way it is. It creates a certain degree of cynicism among young people who might consider a career in law and have something to bring to it. We need to be mindful of that as we discuss the Bill.

Deputy Alex White referred to some of the archaic procedures and attitudes, for want of a better description, throughout the courts and the legal profession. There are two issues involved here, one is the regulation of the legal profession and the other is the procedures in the courts, which we need to revisit, otherwise, we will remain where we were. I was in this House many years ago when much play was made of modernising the courts and the legal profession together but, unfortunately, that has not happened yet. I have had occasion in recent years, along with constituents who have fallen on difficult times, to be in the courts and have observed at first hand the way the law treats the individual and, depending on a person's circumstances, there is no doubt there is a vast difference in how individuals are treated. The person who is without influence and poor will have greater difficulty getting his or her share of fair play in the system that currently exists than a person who is wealthy and can afford to pay. That should not be the case because the law is not supposed to be dispensed in that fashion and neither is access to the law supposed to be dispensed in that fashion. That is an issue that must be addressed. There is an opportunity to address that in the context of this Bill. It is a fundamental flaw in the system.

A sizeable number of legal professionals take on cases, in the knowledge that they will lose money, in order to represent the case and ensure a certain amount of fair play prevails. They do it all the time. However, other legal professionals have a different perspective and in recent years, rightly or wrongly, and Deputy Alex White referred to this, the tribunals were seen as a goldmine in some quarters. It is not necessary in the course of an inquiry for a particular firm to achieve multiples of millions of euros. That should not be possible. To those who would say they were told at the start of an inquiry that it would only take place for one, two or ten months or year, that can all be re-arranged. It is not beyond the bounds of possibility to re-arrange one's schedule. I cannot understand how that position can be countenanced. We will hear about the costs of the tribunals in the next six months. We have asked questions about them since some of us were sitting on the opposite side of the House. Deputy White asked questions about them when he was in the other House. The questions must be answered sooner rather than later. I refer to questions on how we got into the situation where this goldmine draws on the system and the State pays. The State will pay and continue to pay at a time when it can ill afford to pay, and that is the sad part of it. It will be seen as a bad reflection on the profession, on the administration of the institutions of the State and on all of us.

The Deputy is in possession and as he will know that possession is nine tenths of the law.

I recognise that one should not drop the ball especially when one is in possession and I will do my best not to do that.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.