I believe the Minister has-----
Legal Services Regulation Bill 2011: Report Stage (Resumed) and Final Stage
I have no further comments. I understand the discussion on this amendment has concluded.
No. I was cut off the by Leas-Cheann Comhairle and he agreed I could make further comments. I was speaking about multidisciplinary practices.
I do not have a note on it.
I do not have much more to say and I can guarantee we will not be here for much longer. Earlier when the Minister of State, Deputy Dara Murphy, was in the Chamber, I stated I was disappointed that the idea of multidisciplinary practices, which emerging international best practice tells us is not the way to go, was not being scrapped. It was the previous Minister's brainchild and there is no demand for multidisciplinary practices coming from the Irish people. I do not know of any Deputy who has been lobbied that what we need in the area of justice is multidisciplinary practices, where we have the best and brightest accountants, solicitors and barristers in the one building and where those with the most money can access them. The current system works with regard to access. Free Legal Advice Centres, FLAC, has pointed out its concerns that citizens will not be able to access through their solicitors the array of barrister expertise that they now can.
The Minister has put before us six months of research and consultation and she will have the latitude to make a call. I ask her to scrap this and give up Deputy Alan Shatter's brainchild. She is a new Minister with a fresh set of ideas and I ask her to abandon these multidisciplinary practices and maintain the system we have. People are demanding many other reforms, such as a real reduction in the cost of accessing justice and legal practitioners, and the mediation Bill, which is long overdue. This idea of multidisciplinary practices should be scrapped. There is no need or demand for them. They have proven not to be in the best interests of citizens internationally. Very few good case studies argue for them. I ask the Minister to please scrap these multidisciplinary practices and let us not have a year of wasted time.
My colleague adequately went over the ground in terms of the approach we are taking. Clearly the independent referral bar remains. I outlined very clearly how I believe the interests and rights of consumers are being protected. I have also taken a view on multidisciplinary partnerships and the need for research and further understanding of the impact on the market and a referral back to the Minister of the day, which is a very reasonable approach. We have seen the roll-out in England of multidisciplinary practices over a number of years and they have taken time to be established. I will also move ahead on the other partnerships which have been discussed. What is in the Bill is a very reasonable approach. It is the right approach to the development of legal services. We will have a strong independent legal authority, which bodes well for the profession and consumers. This needs to be firmly established and bedded down and the parallel roll-out of legal partnerships will be an initial structural reform. The approach I am taking will allow this to happen while also paving the way for what I believe will be better regulation of multidisciplinary practices as they emerge, if they emerge in the long-term.
Amendments Nos. 49c and 49d are related and will be discussed together.
I move amendment No. 49c:
In page 37, line 39, to delete "Bar Council" and substitute "Authority".
I have tabled these amendments because I believe it is clear that the Bar Council is not the competent authority to supervise professional indemnity insurance. It is not the exclusive regulator of barristers, as the Law Society is for solicitors. One can make a distinction, and there is quite an amount of case law about the Law Society. It is a supplier of insurance services and has no statutory basis for regulating insurance. This is in contrast to the Law Society. This is more properly the responsibility of the authority itself. I hope the Minister will agree that the function should be reserved to the authority, and the amendments seek to achieve this.
I thank Deputy Murphy for these amendments, which helpfully point to the fact that the professional indemnity insurance provisions in section 37 very much remain a work in progress. While the initial approach to professional indemnity insurance under the Bill was to replicate the relevant provisions of the Solicitors Act and apply them across the board to all legal practitioners, be they barristers or solicitors, this has been given subsequent consideration, including in terms of imposing any liabilities on the new authority or on the public purse. The outcome of this consideration is that it is now intended to leave the administration of professional indemnity insurance with the Law Society and the Bar Council in respect of their members who continue to require professional indemnity insurance cover to be practising lawyers. The new legal services regulatory authority will assume the role previously exercised by the Government with regard to solicitors, whereby it will set the minimum level of professional indemnity insurance required for a lawyer to practice. At present, under the relevant statutory instrument, this stands at €1.5 million minimum cover for solicitors. Practising barristers are also required to have professional indemnity insurance cover from the Bar Council. This leaves those barristers who are not members of the Law Library, who will be regulated by the new authority under the Bill, to be subject to minimum level of professional indemnity insurance for good governance and the protection of their clients. I can confirm that the new regulatory authority will promptly regulate for this group of barristers with regard to taking out professional indemnity insurance and the minimum level that will be required. I oppose the amendments on this basis.
Amendments Nos. 50 to 52, inclusive, and amendments Nos. 54 to 59, inclusive, are related and will be discussed together.
I move amendment No. 50:
In page 45, between lines 7 and 8, to insert the following:
"(i) the act or omission, in the case of a legal practitioner who is a legal executive, is likely to bring the legal executives’ profession into disrepute,".
This group of amendments relates to the legal executives who work in the provision of legal services. They have lobbied me and, I am sure, other Deputies and they have met the Minister. They are an integral part of the provision of legal services. They are significant in number and are organised, with their own representative umbrella group. As the Minister appreciates, they seek a degree of formal recognition through the legislation.
This series of amendments seeks to effect recognition for legal services executives.
The combination of amendments proposed by Deputy Collins seeks to bring legal executives directly within the conduct, disciplinary and financial levy provisions of the Bill as a formally recognised and regulated profession. Amendment No. 50 does so in regard to the new complaints regime, while amendments Nos. 51 and 52 relate to striking-off referrals made through the High Court. Amendments Nos. 54 to 58 relate to the calculation of the levy, which will fund the new regulatory regime as it might be applied to legal executives. I have recently met the Irish Institute of Legal Executives and was impressed with the work so many of its members were doing and the case they made. While I am aware of the ongoing initiative of the Irish Institute of Legal Executives to achieve legislative recognition under the Legal Services Regulation Bill, and I have met it to discuss the detail of its proposals and concerns, the body's inclusion in the new regulatory regime is not, for reasons I will set out, something that I consider can be achieved by simple additions to the Legal Services Regulation Bill at this time. However, I am conscious that there are potential benefits and efficiencies to be found for consumers and for the legal services sector in a possibly more developed role for legal executives alongside other legitimate providers of legal services in the future. The time is not yet right to do this and the addition of an array of additional legal service providers would unduly encumber the timely enactment of the Bill. Having said that, the regulation of legal executives and other potentially more competitive providers of legal services is something I would consider appropriate for consideration by the new Legal Services Regulatory Authority at the appropriate time. Once the new regulatory authority has been bedded down with the initial buy-in and involvement of solicitors and barristers, and with the growing confidence of the public in the new regulatory authority, the wider circle of legal services providers can be taken into consideration.
The approach being taken in this regard under the Bill is to look at individual areas of law-related expertise, such as conveyancing, and to consider how best they might be given formal professional recognition, as recommended by the Competition Authority in 2006. This is different from the approach of allowing one particular legal functionary assume multiple functions through the statutory conferment of such a type of role. For example, under section 32 the Bill already provides for public consultations on the establishment of a profession of conveyancer. This will meet one area of long-standing concern to the Institute of Legal Executives, whose submissions will be welcomed in that regard. It will, also under section 32 of the Bill as it stands, be open to the new authority to hold public consultations to consider other aspects of legal service provision and to make recommendations on legislative changes that may arise.
The expansion of the regulatory remit of the Bill would be a substantial departure from its current scope and, if it were to be agreed as policy, would require extensive and detailed work while also incurring additional regulatory burdens and costs. There are also several other providers of legal services who are likely to need consideration in any expanded regulatory setting, such as notaries public, legal costs accountants, licensed conveyancers, patent attorneys, trademark attorneys and probate specialists.
I appreciate that the spirit in which the Deputy tabled the amendment. I am sympathetic to the concerns of the Irish Institute of Legal Executives that its members should be able to achieve professional recognition as a contribution to greater competition and choice in the provision of legal services. This is something that could dovetail with the regulatory framework of the Bill when it has been enacted and its regulatory and legal costs regimes have been established at an operational level. While my immediate objective must be to bring the Bill to enactment in its current form so that the core structural reforms, which the Deputy appreciates must be done, can be spearheaded by the new authority, the status of legal executives and of other legal service providers is appropriate for future consideration. However, it would be premature to do this immediately, for the reasons outlined, and I ask the Deputy to withdraw amendments Nos. 50 to 52, inclusive, and amendments Nos. 54 to 59, inclusive. I am impressed with the work being done and I see the registry authority as having a role in the future with regard to this group and the wider group of legal service providers. At this point, however, the focus must be on the establishment of the registry authority.
I understand what the Minister is saying. I am happy to withdraw the amendment on the basis that it is the intention of the Minister to deal with it after enactment and to charge the new authority with that work.
Amendment No. 53 is out of order.
Amendment No. 53 has been ruled out of order but amendment No. 53a is almost identical. The cost to the Exchequer is almost identical.
The decision has been taken.
Am I not entitled to raise the case where one amendment is ruled out of order and an identical one, submitted afterwards, is accepted? The Acting Chairman can have a look for himself.
I appreciate the comments but the amendment has been ruled out of order.
Whoever checks these things has made a clerical error, because Amendments Nos. 53 and 53a are identical. I want someone in the Bills Office to issue me with clarification on why one was ruled out of order and the other was accepted for tabling. I am pleased that the amendment proposed by Deputy Catherine Murphy has been accepted, but mine should also have been accepted.
I will ask for the Bills Office to have the information brought to the attention of the Deputy.
Amendments Nos. 53a, 56a, 59a, 59b and 60 are related and may be discussed together by agreement.
I move amendment No. 53a:
In page 66, to delete lines 4 to 37, to delete pages 67 and 68 and in page 69, to delete lines 1 to 36 and substitute the following:
“Levy to be paid by Law Society, Bar Council
79. (1) Subject to section 81, the following shall, in accordance with this Part, pay to the Authority in each financial year a levy in the amount determined in accordance with this section:
(a) the Law Society;
(b) the Bar Council.
(2) At the end of each financial year, the Authority shall, with the consent of the Minister for Public Expenditure and Reform, determine for the purposes of this section—
(a) the operating costs and administrative expenses that are properly incurred in that financial year by the Authority in the performance of its functions under this Act (in this section referred to as “approved expenses of the Authority”), and
(b) the operating costs and administrative expenses incurred in that financial year by the Disciplinary Tribunal in the performance of its functions under this Act (in this section referred to as “expenses of the Disciplinary Tribunal”).
(3) The approved expenses of the Authority include—
(a) the remuneration (including allowances for expenses) of the members of the Authority,
(b) the remuneration (including allowances for expenses and superannuation benefits) of inspectors and members of the staff of the Authority,
(c) any superannuation contributions paid in respect of the members of the staff of the Authority out of moneys provided by the Oireachtas,
(d) fees due to consultants and advisers appointed under section 16,
(e) the cost of office premises, and
(f) any costs or expenses, not referred to in paragraphs (a) to (e), incurred by the Authority in the performance of its functions under Part 5.
(4) The Authority shall determine—
(a) the proportion of the approved expenses of the Authority that was incurred by the Authority in the performance of its functions—
(i) under Part 5, and
(ii) under this Act, other than Part 5,
(b) in relation to the approved expenses of the Authority referred to in paragraph (a)(i), the proportion of those expenses that was incurred by the Authority in the consideration and investigation of—
(i) complaints in respect of solicitors, and
(ii) complaints in respect of barristers.
(5) The Authority, in consultation with the Disciplinary Tribunal, shall determine, in relation to the expenses of the Disciplinary Tribunal, the proportion of those expenses that was incurred by the Tribunal in the consideration of applications brought before it that concerned—
(a) complaints in respect of solicitors, and
(b) complaints in respect of barristers.
(6) The amount of the levy payable in each financial year shall be the sum of—
(a) the approved expenses of the Authority, and
(b) the expenses of the Disciplinary Tribunal, in respect of the preceding financial year.
(7) The liability for payment of the amount referred to in subsection (6) shall be apportioned as follows:
(a) in the case of the proportion of the approved expenses of the Authority referred to in subsection (4)(a)(i)—
(i) 10 per cent of that amount shall be apportioned to the Bar Council,
(ii) 10 per cent of that amount shall be apportioned to the Law Society, and
(iii) the remaining 80 per cent of that amount shall be apportioned pro rata among the Law Society and the Bar Council according to the proportion, calculated under subsection (4)(b), of those expenses that was incurred by the Authority in the consideration and investigation of—
(I) complaints in respect of solicitors, and
(II) complaints in respect of barristers;
(b) the proportion of approved expenses referred to in subsection (4)(a)(ii) shall be apportioned pro rata among the Law Society and the Bar Council respectively, according to the number of solicitors on the roll of solicitors, the number of barristers on the roll of practising barristers;
(c) in the case of the expenses of the Disciplinary Tribunal—
(i) 10 per cent of that amount shall be apportioned to the Bar Council,
(ii) 10 per cent of that amount shall be apportioned to the Law Society, and
(iii) the remaining 80 per cent of that amount shall be apportioned pro rata among the Law Society and the Bar Council according to the proportion, calculated under subsection (5), of those expenses that was incurred in the consideration of applications brought before the Tribunal that concerned—
(I) complaints in respect of solicitors, and
(II) complaints in respect of barristers.
(8) The Authority shall calculate, in accordance with subsection (7), the proportion of the amount referred to in subsection (6) that is payable by—
(a) the Law Society, and
(b) the Bar Council.
(9) As soon as practicable after the beginning of each financial year, the Authority shall provide a notice (in this Act referred to as a “levy assessment notice”) to each of the bodies or persons referred to in subsection (1).
(10) A levy assessment notice shall specify—
(a) the approved expenses of the Authority in respect of the preceding financial year,
(b) the proportion of the approved expenses referred to in subparagraphs (i) and (ii) of subsection (4)(a),
(c) the proportion, calculated under subsection (4)(b), of the expenses referred to in subsection (4)(a)(i) that was incurred in the consideration and investigation of—
(i) complaints in respect of solicitors, and
(ii) complaints in respect of barristers,
(d) the expenses of the Disciplinary Tribunal in respect of the preceding financial year,
(e) the proportion, calculated under subsection (5), of the expenses of the Disciplinary Tribunal that was incurred in the consideration of applications brought before it concerning—
(i) complaints in respect of solicitors, and
(ii) complaints in respect of barristers,
(f) the amount of levy payable by the professional body or person concerned, calculated in accordance with subsection (7) and, where applicable, subsection (8)(b),
(g) the date by which the levy becomes payable, and
(h) the rate of interest payable if all or part of the amount specified under paragraph (f) is not paid by the date referred to in paragraph (g).
(11) The levy received under subsection (1) shall be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister for Public Expenditure and Reform directs.
(12) For the purposes of this section—
(a) reference to the number of barristers whose names are on the roll of practising barristers shall be construed as a reference to the number of barristers whose names are on that roll during the financial year to which the expenses concerned relate, less the number of such barristers to whom section 81 applies, and
(b) a reference to the number of solicitors on the roll of solicitors is a reference to the number of solicitors on that roll in the financial year to which the expenses concerned relate, less the number of such solicitors to whom section 81 applies.
(13) In this Part “superannuation benefits” means pensions, gratuities and other allowances payable on resignation, retirement or death.”
I have found myself in the same position as Deputy Pádraig Mac Lochlainn on a number of occasions so, when this happens, it is important that we understand why.
The section deals with the proposed levy on the profession to pay some of the authority's expenses. I am referring to amendments Nos. 53a and 59b. The Bill as worded discriminates heavily between barristers who are members of the Law Library and those who are not. Since the Law Library merely provides commercial services to barristers, the discrimination is not reasonable, and it is unfair. Effectively, it forces barristers who wish to be represented by the Bar Council to purchase services from it. It may be an abuse of a dominant position. In effect, the Bar Council funds its representative and regulatory activities through revenues generated by selling the services offered by the Law Library. Those who are not members of the Law Library often struggle to pay membership fees and are faced with a choice between being disbarred and paying high fees to access services they may not need. There is much talk about barristers and large fees, and we know some high-profile people who can command such fees. Similarly, a large number of barristers will struggle to make ends meet. There is much criticism of big business and small business and we must make sure we do not exclude people who may come to the fore later. They may well be happy to practise at a lower level. The Oireachtas should not enact laws that consolidate monopolies and illegal behaviour or force barristers to purchase certain services in order to gain representation from a certain professional body, which may not be one they require or need to be connected to.
I will first turn to amendment No. 53a, as proposed by Deputy Murphy. This Bill does not discriminate against any type of barrister but recognises them all, including for levy purposes. I think the amendment is based on a misunderstanding of that. This amendment totally replaces section 79 of the Bill with a new text. From what I can see, the main thrust of the proposed replacement of the section is to disapply the levy being imposed to fund the new regulatory regime from non-Law Library barristers. While this could be a workable approach to take where all barristers, regardless of the business model through which they operate, would also be members of the Law Library, the reality could turn out to be different. Consequently, the approach we must take under the Bill for current purposes is to have the regulatory capacity to encapsulate a variety of models of legal practice. I am not, therefore, in a position to agree to the total replacement of section 79 in the manner proposed under amendment No. 53a.
Government amendment No. 56a has been well flagged on Committee Stage. It is being tabled to set right an error in section 79(7), which is in Part 7 of the Bill and which provides, inter alia, for the imposition of a levy on solicitors and barristers. The policy intention is that those who intend to practise as solicitors and barristers in the State and will be regulated under the new legal services regulatory authority will be subject to a levy which will cover the cost of that regulatory regime. Clearly, only those solicitors or barristers who are actually practising the law should have to pay the levy. However, it has been drawn to my attention that section 79(7) currently provides that any solicitor whose name is on the “roll of solicitors”, whether practising or not, would be subject to the levy. That is corrected by this amendment.
Amendment No. 59a is a further clarification that "practising solicitors" are those solicitors who hold a "practising certificate" in the financial year to which the expenses that are to be recouped under the levy relate. These are non-controversial amendments. They clarify an error in the earlier version of the Bill.
Under amendment No. 59b, it is proposed by Deputy Collins that the provisions found in section 80 of the Bill enabling the new regulatory authority to recover outstanding levy payments from non-Law Library barristers be deleted. Again, while I can see this is intended to remove reference to this discrete category of barrister from the Bill, it would, for reasons I have just outlined in relation to the earlier amendment, defeat the working approach of the Bill were we to omit non-Law Library barristers from the enforcement of the levy. This is about making sure that everybody has to pay that levy.
Regarding amendment No. 60, as Members will recall, Part 7 of the Bill deals with the raising of a regulatory levy on the legal professions in support of the operation of the new legal services and legal costs regulatory regimes. It provides that the Law Society will be responsible for paying to the authority the levy amount on behalf of all practising solicitors; the Bar Council will be responsible for paying the levy on behalf of its members who practise in the Law Library; and those barristers who are not members of the Law Library will be individually responsible for paying the levy directly to the authority. Section 80 of the Bill provides for the recoverability of the regulatory levy from the different categories of legal practitioner concerned. Amendment No. 60 proposes the relevant recoverability provision found in subsection 5 of section 80 in relation to the Bar Council should be deleted. However, because of the possibility that in the future non-Law Library barristers will not be taken under the wing of the Bar Council, it has been necessary in the Bill to distinguish for levy purposes between that category of practising barrister and those who do not fall within the Bar Council's preferred membership. It remains essential, therefore, to differentiate in the recovery provisions of the Bill relating to the levy between Law Library and non-Law Library barristers and I cannot, therefore, accept the deletion of that subsection. I ask that the amendment be withdrawn.
I confirm that other concerns have been raised with me regarding the modalities of application of the levy on the legal professions in the Bill. I am giving those matters ongoing consideration and, if necessary, will introduce amendments relating to that at a future date.
I am in favour of the different models and I think we are at one on that. I will withdraw the amendments I tabled.
Just to clarify, I had submitted this amendment and others at earlier Stages of the Bill regarding the allocation of fees to the Bar Council and the Law Society. This amendment emanated from the Bar Council. Its concern was that the levies applied would reflect the number of cases. If many complaints are made against solicitors, the Law Society would deal with that pro rata and then the Bar Council would deal with whatever percentage applied to barristers after a certain point. That is the intent of the amendment. If the Minister is not accepting these amendments, will she bring in a system at a later stage that lays out clearly and fairly what each representative body should pay? If 80% of complaints relate to solicitors and 20% relate to barristers, after a certain point, it should apply pro rata to those two organisations. While some barristers are making a lot of money, many are genuinely struggling, and one would not want the fee to be disproportionate to the number of complaints made against barristers or to cause barristers, particularly young barristers, to struggle. That is the point of those amendments.
I do not think Deputy Mac Lochlainn has tabled a particular amendment at this point.
I am speaking about amendment No. 53a.
On Committee Stage, the Bill was amended to provide in detail for a fair and equitable calculation and payment of a levy on legal practitioners in order to fund the operational expenses of both the legal services regulatory authority and the legal practitioners disciplinary tribunal. The new levy provisions reflect a broadening of the traditional model of the provision of legal services by the inclusion of three categories of practising legal practitioners. The Law Society will be responsible for paying to the authority the levy amount on behalf of solicitors, as I have said, and the Bar Council will be responsible for paying the levy on behalf of its members. Those barristers who are not members of the Law Library will be individually responsible for paying the levy directly to the authority. These expenses shall be divided equitably between the three categories of legal practitioners, with some stated exceptions. I need not go over the calculation ratio that has been arrived at, as I think it has been accepted. The expenses incurred by the authority in fulfilling its non-compliance related functions will be apportioned pro rata between the three groups. I believe the authority will have sufficient power to compel payment of the levy by the relevant persons within a reasonable three month framework. Failure to pay the levy may result in an individual legal practitioner being prevented from providing legal services or may result in the authority suing the Law Society or the Bar Council until payment is made. The initial set-up costs for the new bodies will be paid by the Exchequer on a recoupable basis, via the levy, and €500,000 has been set aside for that purpose under the justice Vote for this year.
I move amendment No. 56a:
In page 68, line 1, to delete “of solicitors on the roll of solicitors” and substitute “of practising solicitors”.
I move amendment No. 59a:
In page 69, to delete lines 26 to 28 and substitute the following:
“(b) a reference to the number of practising solicitors is a reference to the number of solicitors holding a practising certificate in the financial year to which the expenses concerned relate, less the number of such solicitors to whom section 81 applies.”.
I move amendment No. 61a:
In page 71, to delete lines 16 to 19 and substitute the following:
“ “contentious matter” means a matter that arises in, and that relates to the subject matter of, proceedings before any court, tribunal or other body or person before which the respective legal rights and obligations of two or more parties are determined, to which the person instructing the barrister concerned is a party;”.
Amendments Nos. 61b, 66a, 66b, 68a to 68c, inclusive, 69a, 74a, 76a and 76b will be discussed together.
I move amendment No. 61b:
In page 71, line 24, to delete “persons” and substitute “individuals”.
This group of amendments tightens up the governance of the new legal practice models, namely, legal partnerships and multidisciplinary practices. This will be subject to public consultation under the amendment taken earlier today in this area. Amendment No. 61b precludes corporate participation or investment in multidisciplinary practices, and although some believe it should be included now, it might be allowed at some later stage under the new authority. Amendments Nos. 66a, 66b and 74a strengthen the regulation of legal partnerships, for example, regarding professional indemnity insurance notification of commencement or cessation while protecting the solicitors' compensation fund. Amendments Nos. 68a and 68b are drafting adjustments, while amendment No. 68c sets out a list of those who cannot be partners in a multidisciplinary practice. Amendment No. 69a ensures that a managing legal partner in a multidisciplinary practice is not just an employee but a partner, and amendment No. 76a sets out the policies and principles for the making of regulations on multidisciplinary practices and legal partnerships. Amendment No. 76b allows the new regulatory authority to maintain a public register of the new multidisciplinary practices and legal partnerships, which is very important. I commend these enhanced governance amendments to the House.
I move amendment No. 66a:
In page 71, after line 35, to insert the following:
“Notification of Authority of commencement, cessation of provision of legal services by a legal partnership
87. (1) A legal partnership that intends to provide legal services—
(a) shall notify the Authority, in accordance with subsection (3), of that fact, and
(b) shall not provide such services until it has complied with paragraph (a).
(2) A legal partnership that ceases providing legal services shall—
(a) notify the Authority in accordance with subsection (3) of that fact, and
(b) having complied with paragraph (a), shall not provide legal services without providing the Authority with a further notification under subsection (1).
(3) A notification under subsection (1) or (2) shall be in writing and in such form as may be prescribed.”.
I move amendment No. 66b:
In page 71, after line 35, to insert the following:
“Legal partnership to have professional indemnity insurance
88. (1) A legal partnership shall not provide legal services unless there is in force, at the time of the provision of such services, a policy of professional indemnity insurance which adequately covers the legal partnership in the provision of those legal services.
(2) This section is without prejudice to any obligation of a legal partnership under section 37 or any regulations made under it.
(3) For the purpose of subsection (1), a policy of professional indemnity insurance referred to in that subsection shall not adequately cover a legal partnership in the provision of legal services unless it complies with section 37 and any applicable regulations made under it.
(4) In this section, “professional indemnity insurance” means a policy of indemnity insurance against losses arising from claims in respect of any description of civil liability incurred—
(a) by a legal partnership arising from the provision of legal services, or
(b) by a partner, employee or agent or former partner, employee or agent of the legal partnership arising from such provision.”.
I move amendment No. 68a:
In page 72, line 24, to delete “The following” and substitute “Subject to subsection (5), the following”.
I move amendment No. 68b:
In page 72, line 35, to delete “solicitors.” and substitute “solicitors;”.
I move amendment No. 68c:
In page 72, between lines 35 and 36, to insert the following:
“(d) a person who is an unqualified person;
(e) a person who, having been a qualified barrister, is disbarred (other than a person who has procured himself to be disbarred with a view to being admitted as a solicitor);
(f) a person who, being a solicitor in another jurisdiction, is not a solicitor qualified to practice in that jurisdiction by reason of a sanction equivalent to a sanction specified in subsection (7) having been imposed on him or her in accordance with the law of that jurisdiction;
(g) a person who, having been a barrister in another jurisdiction, has been disbarred in accordance with the law of that jurisdiction;
(h) a person who has a declaration under section 150 of the Companies Act 1990 made against him or her or is subject or is deemed to be subject to a disqualification order by virtue of Part VII of that Act;
(i) a person who is convicted on indictment of an offence;
(j) a person who is convicted of an offence involving fraud or dishonesty or breach of trust;
(k) a person who is convicted of an offence involving money laundering or terrorist financing (both within the meaning of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010);
(l) a person who is an undischarged bankrupt;
(m) a person who is insolvent and has entered into a Debt Settlement Arrangement or a Personal Insolvency Arrangement (both within the meaning of section 2 of the Personal Insolvency Act 2012) with his or her creditors;
(n) a person who is convicted outside the State for an offence consisting of acts or omissions that, if done or made in the State, would constitute an offence triable on indictment;
(o) a person who is disqualified under the law of another state (whether pursuant to an order of a judge or a tribunal or otherwise) from being appointed or acting as a director or secretary of a body corporate or an undertaking.
(5) The High Court may, on application to it by a person to whom subsection (4) (other than paragraphs (a) to (c) of that subsection) applies, grant the person an order permitting him or her to be a partner in a multi-disciplinary practice where it is of the opinion that it is reasonable and proportionate to do so, having regard to the circumstances of the person, including the circumstances that gave rise to subsection (4) applying to him or her.
(6) Nothing in this section shall be construed as permitting investment in a multidisciplinary practice by a person other than an individual.
(7) In this section, “unqualified person” means a solicitor who is not a solicitor qualified to practise, within the meaning of the Solicitor’s Act 1954, by reason of—
(a) his or her name having been struck off the roll of solicitors,
(b) his or her suspension from practice,
(c) his or her having had the issue to him or her of a practising certificate refused under section 49 of that Act,
(d) his or her having his or her practising certificate suspended under section 58 of the Solicitors (Amendment) Act 1994, or
(e) his or her having given to the High Court an undertaking not to practise as a solicitor.”.
I move amendment No. 69a:
In pages 72, line 38 and in page 73, line 1, to delete “or an employee of”.
I move amendment No. 74a:
In page 75, line 30, after “of” where it secondly occurs to insert “a legal partnership or, as the case may be,”
I move amendment No. 76a:
In page 77, between lines 30 and 31, to insert the following:
“Regulations on operation of legal partnerships and multi-disciplinary practices
97. (1) Subject to this section, the Authority may make regulations in relation to the operation and management of—
(a) legal partnerships, and
(b) multi-disciplinary practices.
(2) The Authority shall—
(a) upon the commencement of section 84 or as soon as practicable thereafter, make regulations under subsection (1)(a), and
(b) upon the commencement of section 86 or as soon as practicable thereafter, make regulations under subsection (1)(b).
(3) Without prejudice to the generality of subsection (1), regulations under that subsection may provide for—
(a) the standards to be observed in the provision by the practice of services to clients, including standards relating to:
(i) the professional and ethical conduct of persons providing legal services to clients;
(ii) the obligation of such persons to keep the affairs of clients confidential;
(iii) the provision of information to a client in relation to the duties owed by the practice to him or her,
(b) the rights, duties and responsibilities of a practice in respect of moneys received from clients,
(c) the management and control of the practice so as to ensure that:
(i) the standards referred to in paragraph (a) are at all times observed;
(ii) it has in place appropriate systems of control, including systems for risk management and financial control;
(iii) where, in the provision by it of services, a conflict of interest or potential conflict of interest arises, this is dealt with adequately and in accordance with any relevant code of conduct or professional codes;
(iv) its obligations under this Act and regulations made under it are complied with,
(d) the maintenance by the practice of records,
(e) the regulation of the names that may be used by a practice,
(f) the regulation of the advertising by the practice of its services.
(4) Without prejudice to the generality of subsection (1), regulations under subsection (1)(b) may—
(a) specify procedures that are to be included in the written procedures referred to in section 91(1), and
(b) provide for:
(i) the type or types of bank accounts that may be opened and kept by a multidisciplinary practice, and the opening and keeping of such accounts;
(ii) the accounting records to be maintained by a legal practitioner who is a partner in or an employee of a multi-disciplinary practice arising from the provision by him or her of legal services, including the minimum period or periods for which accounting records shall be retained by a legal practitioner during the period of, and following the conclusion of, the provision of legal services;
(iii) the keeping by a legal practitioner referred to in subparagraph (ii) of accounting records containing particulars of and information as to moneys received, held, controlled or paid by him or her arising from the provision by him or her of legal services, for or on account of a client or any other person or himself.
(5) In making regulations under this Part, the Authority shall have regard to the objectives specified in section 12(4) and to the following:
(a) the need to ensure that the provision by a practice of legal services to its clients is of a standard that it is reasonable to expect of a legal practitioner in the provision of those services;
(b) the need to ensure that a practice is operated or managed in such a way as to ensure that a legal practitioner who is a partner of or an employee in that practice has, in the provision by him or her of legal services, adequate regard to—
(i) the codes of practice and professional codes that are applicable to him or her, and
(ii) the professional principles specified in section 12(5);
(c) the need to ensure that the interests of clients of practices are protected and that the duties owed to them by practices are complied with and, in particular, that the activities of a practice do not expose the interests of a client to risk or pose a risk to monies received by it from a client;
(d) the need, in the case of a multi-disciplinary practice, to ensure that the provision by it of services other than legal services does not have the effect of lowering the standard referred to in paragraph (a) or the regard by legal practitioners referred to in paragraph (b) to the matters specified in that paragraph;
(e) the need to ensure that public confidence in practices is maintained.
(6) In subsections (3) and (5), “practice” means a legal partnership or a multi-disciplinary practice.”.
I move amendment No. 76b:
In page 77, to delete lines 31 to 40, and in page 78, to delete lines 1 to 13 and substitute the following:
“Authority to maintain register of legal partnerships and multi-disciplinary practices
98. (1) The Authority shall maintain a register of—
(a) legal partnerships that have notified it in accordance with section 87(1)(a), and
(b) multi-disciplinary practices that have notified it in accordance with section 87(1)(a).
(2) Where a legal partnership or a multi-disciplinary practice referred to in subsection (1) notifies the Authority in accordance with section 87(2)(a) or 87(2)(a), as the case may be, the Authority shall remove the name of that legal partnership or multidisciplinary practice from the register referred to in that subsection.
(3) The Authority shall make the register referred to in subsection (1) available in an appropriate format to members of the public for inspection free of charge.”.
I move amendment No. 77a:
In page 78, to delete lines 14 to 26 and substitute the following:
“Public consultation on operation etc., of legal partnerships
98. (1) The Authority—
(a) immediately following its establishment, shall, and
(b) periodically thereafter, may,
engage in a public consultation process in relation to the regulation, monitoring and operation of legal partnerships.
(2) The Authority shall conduct its initial consultation referred to in subsection (1)(a) and report to the Minister within a period of 6 months following its establishment.
(3) Following any consultation conducted under subsection (1), and having regard to any submissions duly received, the Authority shall prepare a report to the Minister setting out any recommendations in relation to the matters specified in subsection (1).
(4) The Minister shall cause copies of any such report to be laid before each House of the Oireachtas within 30 days of its receipt by him or her.”.
I move amendment No. 78a:
In page 78, between lines 26 and 27, to insert the following:
“Report on operation etc., of multi-disciplinary practices
99. (1) The Authority shall, no later than 6 months following the establishment day, make a report (“initial report”) to the Minister on the establishment, regulation, monitoring, operation and impact of multi-disciplinary practices in the State.
(2) The initial report shall include information on—
(a) the operation of similar practices in other jurisdictions, including the—
(i) length of time in which such practices have been operating,
(ii) legislative and regulatory measures relating to such practice that are in place in the jurisdictions concerned, and the effect of those measures, and
(iii) impact of the operation of the practices on the matters referred to in paragraph (d),
(b) the likely consequences, including the changes to the operation of existing models of legal practice in the State, of the operation in the State of multidisciplinary practices,
(c) the likely impact of the operation of multi-disciplinary practices in the State on—
(i) legal costs,
(ii) the provision of legal services to consumers, and
(iii) the access of persons to legal practitioners,
(d) the likely effect of the operation of multi-disciplinary practices in the State on the achievement of the objectives specified in section 12(4).
(3) The Authority shall engage in a public consultation process in relation to the matters specified in subsection (1) and, not later than 6 months after the making to the Minister of the initial report, make a report (“final report”) to the Minister on those matters.
(4) The final report shall—
(a) have regard to the information contained in the initial report, and to any submissions received in the course of the public consultation under subsection (3), and
(b) set out the recommendations of the Authority in relation to the establishment, regulation, monitoring and operation of multi-disciplinary practices in the State.
(5) The Minister shall cause copies of the initial report and the final report to be laid before each House of the Oireachtas within 30 days of its receipt by him or her.”.
Amendments Nos. 79 and 80 are out of order.
I move amendment No. 80a:
In page 79, between lines 27 and 28, to insert the following:
“Review of operation of this Part
100. (1) The Authority shall—
(a) not later than 4 years after the commencement of section 84, and every 5 years thereafter, commence a review of the operation of this Part, insofar as it relates to legal partnerships, and
(b) not later than 1 year after the commencement of the review referred to in paragraph (a), make a report to the Minister on its findings and conclusions resulting from that review.
(2) The Authority shall—
(a) not later than 2 years after the commencement of section 86, and every 5 years thereafter, commence a review of the operation of this Part, insofar as it relates to multi-disciplinary practices, and
(b) not later than 1 year after the commencement of the review referred to in paragraph (a), make a report to the Minister on its findings and conclusions resulting from that review.
(3) A report under subsection (1)(b) or (2)(b) may include such recommendations (including recommendations for the amendment of any provision of this Part that is the subject of the review) as the Authority considers necessary.
(4) The Minister shall cause copies of any report under subsection (1)(b) or (2)(b) to be laid before each House of the Oireachtas within 30 days of its receipt by him or her.”.
I move amendment No. 80b:
In page 80, to delete line 6.
Amendments Nos. 82a, 82b, 82c, 82d and 83 are related and will be discussed together.
I move amendment No. 82a:
In page 87, to delete lines 11 to 19 and substitute the following:
“Review of scales of fees
110. The Superior Courts Rules Committee shall, whenever it considers it appropriate to do so and, in any case, not less than once every 2 years, review the scales of fees for contentious and non-contentious business set out in Appendix W to the Rules of the Superior Courts.”.
These amendments relate to keeping schedule fees for routine legal transactions up to date under Appendix W of the superior court rules. Amendment No. 82c clarifies the length of time of office of the legal costs adjudicators at five years, once renewable. Amendment No. 82d is an adjustment to reflect the rules of court and procedures relating to the Office of the Taxing Master.
I move amendment No. 82b:
In page 88, between lines 37 and 38, to insert the following:
“(6) A Legal Costs Adjudicator shall provide such information on his or her activities as the Chief Legal Costs Adjudicator may, for the purpose of discharging his or her functions under sections 111 and 112 and this section, require.”.
I move amendment No. 82c:
In page 90, to delete lines 26 and 27 and substitute the following:
“(c) shall, subject to paragraph (b), be eligible for re-appointment or to have the term of appointment extended, but shall not hold office for periods the aggregate of which exceeds 10 years.”.
I move amendment No. 82d:
In page 99, line 7, after “direct,” to insert “including the manner in which notice is to be given,”.
Amendments Nos. 82e, 82f, 82g, 82h, 82i, and 82j are related and will be discussed together.
I move amendment No. 82e:
In page 108, line 20, to delete “at the Bar”.
The purpose of amendments Nos. 82e and 82f is the straightforward matter of my concern that the phrase "at the Bar" might imply that a lawyer, in order to gain the title of senior counsel, must already be, or must at some time become, a member of the Law Library. Deputies will be aware that from the time of the inception of the Bill the Government's intention has been to broaden the practice options available to qualified barristers alongside the traditional model of the Law Library. As a result, it is the intention of these amendments to make it clear, in the context of a solicitor or barrister gaining a patent of precedence - that is, the title of senior counsel - that the solicitor or barrister concerned will not necessarily have to be operating within the Bar Council or Law Library model.
Amendment No. 82g is a technical amendment to a cross-reference to facilitate amendment No. 82j. Amendment No. 82h represents the deletion of section 139(8) and is purely a tidying-up exercise in drafting terms. As it stands, subsection (8) rather awkwardly provides that the committee charged with considering applications for the granting of the title of senior counsel shall not recommend the granting of that title to one of its own members. It makes this prohibition subject to subsection (9), which in turn allows the committee to recommend the granting of the patent as long as such a member is not involved in the deliberations. It is therefore considered more straightforward to delete subsection (8) and let subsection (9) speak for itself in avoiding any conflicts of interest that might arise.
Amendment No. 82i reflects the desired policy position that while a capacity for advocacy, more typically exercised by a barrister, shall be a relevant criterion in the consideration of whether a person should be granted a patent of precedence, a capacity for specialist litigation or a specialist knowledge of an area of law shall be an equally valid alternative. The purpose of the amendment is to enhance the scope of what it is to be senior counsel and to move away from a more narrow consideration of the proficiencies concerned, which could rule out eligible candidates.
It has come to my attention that there are some experienced senior counsel who are switching to the solicitors' profession in order to be allowed to practise as employees of legal firms, something that is currently prohibited for barristers but is to be opened up under the Bill. It would be regrettable if such practitioners, even temporarily, lost the title of senior counsel and then had to go through the process of reapplying for the title under the Bill's patents of precedence process in Part 12. Therefore, amendment No. 82j seeks to allow someone who has already gained the title of senior counsel while they were practising as a barrister to hold on to the title if they switch to practising as a solicitor. It should be noted that there is no need to insert an equivalent provision for solicitors who switch to being barristers, because the title of senior counsel is not yet available to solicitors. This is something that section 137 of this Bill will rectify.
I move amendment No. 82f:
In page 108, line 23, to delete “at the Bar”.
I move amendment No. 82g:
In page 108, line 33, to delete “subsection (1)(b) and section 142,” and substitute “subsection (1)(b), section 142 and section 143,”.
I move amendment No. 82h:
In page 109, to delete lines 23 and 24.
I move amendment No. 82i:
In page 110, to delete lines 4 to 6 and substitute the following:
“(ii) either or both of the following—
(I) a capacity for advocacy, or
(II) a capacity for specialist litigation or a specialist knowledge of an area of law,”.
I move amendment No. 82j:
In page 112, between lines 11 and 12, to insert the following:
“Solicitor granted Patent while barrister
143. A solicitor to whom, before the commencement of this section and while he or she was a barrister, a Patent was granted, shall be entitled to use the title of “Senior Counsel”.”.
I move amendment No. 84:
In page 113, line 6, to delete “in court” and substitute "in a court, tribunal or forum for arbitration".
I move amendment No. 85:
In page 113, line 13, to delete "in court" and substitute "in a court, tribunal or forum for arbitration".
I move amendment No. 86:
In page 113, lines 17 and 18, to delete "part-time employment, but does not include employment by a solicitor" and substitute "part-time employment".
I move amendment No. 87:
In page 117, lines 5 and 6, to delete "the Authority may, with the consent of the Minister, by regulation provide” and substitute “the Authority may by regulation provide".
I move amendment No. 88:
In page 118, line 18, to delete "practice" and substitute "practise".
I move amendment No. 89:
In page 118, line 22, to delete "as the case may be;" and substitute "as the case may be.".
I move amendment No. 90:
In page 118, to delete lines 23 to 25.
I move amendment No. 91:
In page 118, to delete lines 26 to 39, to delete page 119 and in page 120, to delete lines 1 to 4 and substitute the following:
"151. (1) The Authority may, with the consent of the Minister, make regulations in relation to commercial communications by providers of legal services in a regulated profession that relate to—
(a) the independence, dignity and integrity of the profession, and
(b) professional secrecy,
in a matter consistent with the specific nature of the profession.
(2) Without prejudice to the generality of subsection (1), regulations made under that subsection or any professional code—
(a) may not make rules in relation to commercial communications by providers of a legal service in a regulated profession unless the rules—
(i) are non-discriminatory, and
(ii) are justified by an overriding reason relating to the public interest, and
(iii) are proportionate,
(b) may not impose any total prohibitions on the use of any form of commercial communications by providers of a legal service in a regulated profession,
(c) may provide for the manner in which the Authority is to determine whether any particular commercial communication by a provider of a legal service in a regulated profession is in contravention of any provision of, or regulations under, this section.
(3) A provider of legal services in a regulated profession shall not publish or cause to be published commercial communications which do not comply with regulations under subsection (1).
(4) No professional code shall operate to prevent a group of practising barristers, who share a facility, premises or cost of practice, from advertising themselves as such a group."
This amendment proposes to remove the ban on making unsolicited approaches to people, as provided for in section 151(2)(d) of the original Bill. It is, in effect, a ban on advertising services in certain circumstances. The European Court of Justice found in the Grand Chamber hearing of case C-119/09 that such a ban is unlawful. The relevant extract from paragraph 38 of the judgment states:
It follows from those elements that canvassing constitutes a form of communication of information intended to seek new clients. However, as the Commission maintains, canvassing involves personal contact between the provider and a potential client, in order to offer the latter services. It can, therefore, be classified as direct marketing. Consequently, canvassing comes within the concept of 'commercial communication', within the meaning of Articles 4(12) and 24 of Directive 2006/123.
I understand the State is in violation of the EU services directive in this matter. I hope the Minister will be minded to accept this amendment for that reason. In light of the potential for legal cases, it is important for this amendment to be accepted to ensure we are indemnified into the future. If one looks at the relevant graph, one will see how many advertising infringements are being pursued at the moment and one will appreciate that this has become a much more urgent issue.
I thank the Deputy for tabling amendment No. 91, as it gives me an opportunity to set out my intentions for aligning the Bill's provisions in relation to legal services advertising with the EU services directive. Clearly, this is something the Deputy also wishes to achieve. The European Commission has expressed concern that Ireland's current legal services advertising regime may be in breach of Article 24 of Directive 2006/123/EC, which is known as the services directive. In general terms, while the directive permits the imposition of certain restrictions on legal services advertising that are informed by the public interest, the Commission has found that some of the current restrictions being applied in this jurisdiction may be disproportionate. A letter of formal notice to that effect issued in October 2014.
I wish to inform the Deputy that the Department of Justice and Equality is engaged in ongoing correspondence and consultation with the Commission with a view to finding an appropriate balance between the exigencies of the services directive and those of Government policy, including as part of the ongoing reform of the legal services sector. Therefore, it is anticipated that advertising provisions that meet the concerns arising with regard to the services directive will be put forward by way of amendment to this Bill when it comes before the Seanad. As I have said, we are in discussions with the Commission as part of an attempt to work out how the appropriate amendment will be drafted. Section 151 of the Bill will enable the new legal services regulatory authority to make regulations with regard to the advertising of legal services by solicitors and barristers. Detailed work on the revised advertising provisions continues on this basis in my Department. We are doing this in consultation with the Commission and with the assistance of the Office of the Attorney General and the Office of the Parliamentary Counsel.
I believe this matter can be satisfactorily resolved. I recognise the urgency of it. The aim is to ensure the legislative basis of the State's legal services advertising regime is fully aligned with national policy imperatives and the broader EU competition imperative. On the basis that the redrafting of section 151 of the Bill is at a very advanced stage, I ask the Deputy to consider withdrawing her amendment. Although I am not supporting the amendment at this time, I note and welcome the fact that the Deputy has sought in amendment No. 91 to retain the Bill's prohibition, as set out in section 151, of a professional code that seeks to stop a group of practising barristers who share a facility, premises or cost of practice from advertising themselves as such a group. I fully intend to deal with this issue. As I have said during this debate when we discussed a number of issues, I intend to introduce some amendments in the Seanad, which means there will be further discussion of this section when the amended Bill returns to the Dáil.
I am happy to accept the Minister's bona fides on this issue. I am worried that it if this is not done in the Seanad, it will not be done in primary legislation. If the Minister can give me an absolute assurance that this change will be made in the Seanad and will subsequently be considered here, I will be very happy to withdraw this amendment.
I can confirm that it will be dealt with in primary legislation. Obviously, some regulations will be necessary as well. Provision will be made in the general framework and in the detailed regulations as well.
Okay. I thank the Minister.
I might take a moment to thank all the Deputies for the contributions they have made and amendments they have proposed, not just today but on other days as well. All the Deputies with responsibility for the justice area have done a great deal of work in this House and in committee since this Bill was published in 2011. I thank them for their constructive approach to this Stage of the Bill. Today, we have made progress with the introduction of a range of legal practice models. I think the Bill has been greatly strengthened during its passage through this House. I want to pay tribute to Deputy Shatter, who introduced this Bill in the first instance. I believe it will deliver the structural reform of legal services and legal costs that is necessary. I recognise that some fairly major additional amendments will have to be made in the Seanad.
I am very pleased that we have reached this point and that we had a very constructive debate while consolidating this reforming Bill, which is probably overdue but certainly welcome. There will be further engagement with stakeholders in advance of the discussion of the Bill in the Seanad, following which the Bill will be back before this House with some further key enhancements, as I indicated during our discussion in the House. The further enhancements, which need to be made, will help to deliver more independent regulation of the legal profession and services, which will be to the benefit of consumers, enterprise and the legal profession itself.
I thank Deputies for their contribution during the long and detailed discussions on the Bill.