I move amendment No. 139:
In page 79, line 48, before "to" to insert "so".
SECTION 76.
I will accept that.
Amendment agreed to.
Section 76, as amended, agreed to.
Section 77 agreed to.
NEW SECTION.
Acceptance of amendment No. 140 involves the deletion of section 78 of the Bill.
I move amendment No. 140:
In page 83, before section 78, to insert the following new section:
78.—(1) Notwithstanding anything to the contrary in the Principal Act, the Minister may, after consultation with the Minister for Enterprise and Employment, make regulations authorising credit unions to provide services as follows—
(a) to draw up or prepare a will or other testamentary instrument, or
(b) to take instructions for a grant of probate or administration, or
(c) to draw or prepare any papers on which to found or oppose any such grants.
(2) The services referred to in subsection(1) of this section may be provided by credit unions in accordance with the provisions of regulations made under this section and in compliance with the requirements of this section.
(3) Regulations under this section may include provisions for all or any of the following, namely—
(a) the protection of persons for whom services are provided under this section by credit unions from conflicts of interest that might otherwise arise in connection with the provision of the services,
(b) securing that adequate compensation is available to such persons in respect of negligence, fraud or other dishonesty on the part of officers or employees of credit unions in connection with the provision of the services,
(c) (i) the extent to which and the manner in which services provided under this section would require the involvement of persons qualified to practise as solicitors within the meaning of the Principal Act, and
(ii) the qualifications and experience of personnel generally engaged in the provision of the services,
(d) the class or classes of persons to whom the services may be provided,
(e) requirements relating to the approval by the Registrar of Friendly Societies of a credit union proposing to provide services,
(f) the restriction of the power to provide the services to credit unions of a specified class or classes,
(g) maximum rates or scales of fees, costs or expenses which may be charged by credit unions for the provision of the services,
(h) taxation by a Taxing Master of the High Court of fees, costs or expenses charged by credit unions for the services,
(i) such further conditions in relation to the provision of the services as the Minister may prescribe in accordance with this section.
(4) In this section "probate" and "administration" have the meanings assigned to them by section 3 of the Succession Act, 1965.
(5) Any communication made to or by a credit union (including a communication made to or by an officer or employee of a credit union) in the course of its acting as such for a person in connection with providing services under subsection (l) of this section shall in any legal proceedings be privileged from disclosure in like manner as if the credit union had at all material times been acting as that person’s solicitor.
(6) (a)A credit union providing services under subsection (l) of this section shall not in relation to the provision of such services be an unqualified person within the meaning of the Principal Act.
(b) A credit union which provides any of the services mentioned in subsection (l)of this section otherwise than in accordance with the provisions of this section or of any regulations made under this section shall be guilty of an offence under section 58 (2) (as amended by this Act) of the Principal Act.
(7) Section 58 (as amended by this Act) of the Principal Act shall not apply to—
(a) a credit union,
(b) any officer or employee of a credit union by reason of any act done by him in the course of his office or employment on behalf of the credit union, where the credit union is providing services in accordance with subsection (l) of this section.
(8) Section 59 of the Principle Act shall not apply to any solicitor by reason of any act done by him as an officer or employee of a credit union where that credit union is providing services in accordance with subsection(1) of this section.
(9) Where a credit union provides services under subsection (1) of this section it shall include in any document or advertisement issued to the public, which contains a reference to the provision of the services, a statement of the charges or the basis for the charges in respect of the services and a client shall be entitled to ask for and to be furnished with an itemised statement of that credit union’s charges in respect of services provided by the credit union under subsection (1) of this section.
(10) On the taking of instructions to provide services under this section to a person, or as soon as is practicable thereafter, a credit union shall provide the person with particulars in writing of—
(a) the actual charges, or
(b) where the provision of particulars of the actual charges is not in the circumstances possible or practicable, an estimate (as near as may be) of the charges, or
(c) where the provision of particulars of the actual charges or an estimate of such charges is not in the circumstances possible or practicable, the basis on which the charges are to be made, by that credit union for the provision of such services.
(11) Any information which comes into the possession of an officer or employee of a credit union by virtue of his involvement in the provision of services under subsection (1) of this section by a credit union shall not be used by him or by the credit union to promote the business of the credit union.
(12) (a)A credit union providing services under subsection (1) of this section shall maintain separate accounting records and prepare accounts in respect of each year showing—
(i) the cost to the credit union of providing the services, and
(ii) the income accruing to the credit union from the charges made for the services,
and, subject to subsection(3) (g) of this section, shall so provide and charge for the services that the income from the provision of the services is not less than sufficient to meet all costs properly attributable to the provision of the services taking one year with another.
(b) A statement attesting the correctness of the accounts prepared in accordance with paragraph (a) of this subsection and confirming that such accounts have not been distorted as a result of any arrangement which would affect the apportionment of costs and income associated with the provision of the services and that such apportionments as have been made have been properly made shall be signed by the chairperson and treasurer of the credit union and attached to the annual accounts of the credit union.
(13) A credit union shall not provide services under the provisions of this section unless at least one of the following conditions is satisfied:
(a) regulations have been made under section 80* of this Act, or
(b) the credit union is a member of a scheme (other than a scheme established under section 80* of this Act) which has been established for the investigation of complaints against the credit union in relation to the provision of services under this section and which has been approved of by the Minister.
(14) If a person exercising any right under this section or a person acting on behalf of such a person applies for any grant of probate or letters of administration and—
(a) makes a statement in the application, or supports the application with a document, which he knows to be false or misleading in a material particular, or
(b) recklessly makes a statement in the application, or supports the application with a document, which is false or misleading in a material particular,
he shall be guilty of an offence.
(15) Any person guilty of an offence under subsection (14) of this section shall be liable—
(a) on conviction on indictment thereof, to a fine not exceeding £10,000,
(b) on summary conviction thereof, to a fine not exceeding £1,000.
(16) Every regulation made under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.
(17) In this section "credit union" means an industrial and provident society registered as a credit union under the Credit Union Act, 1966.".
Deputies will be aware that I have looked at the provisions of section 78 again and have decided to amend them in the light of views expressed to me and having regard to the public interest. Section 78 was included in the Bill for the purpose of increasing competition in the provision of probate and will-making services. I have now reviewed these provisions having regard to representations which I have received from across a wide spectrum of views and I am satisfied that they are not the best way forward.
There has been a substantial increase in the numbers qualifying as solicitors in recent years. This was due to some extent to the relaxation of the rules for entry to the society's law school introduced in 1990. Within the profession there are now many more solicitors competing against each other for available business including probate and will-making services. Consumers must ultimately benefit from this competition.
Banks, building societies and insurance companies are economically powerful organisations which already exercise considerable power and influence in our economy. I am concerned about concentrating further power in these large financial institutions. It may not be in the best long term interests of consumers to grant further powers to financial institutions in property-related matters. It is my view that an expanded profession can provide greater competition if that is what is needed in these areas.
My concern is not to protect the interests of solicitors or to preserve any monopoly which they may enjoy. My primary concern is to do what is best in the interests of the consumer. Competition in the provision of probate and will-making services will be further enhanced by section 69. That section lifts the Law Society's prohibition on price advertising of legal services. The increase in the number of solicitors combined with changes in advertising arrangements should ensure that there will be adequate competition in the provision of these services to the benefit of the consumer. However, the concerns which have been expressed to me in relation to these sections do not extend to all financial institutions equally. I consider credit unions to be in a somewhat different category to other financial institutions. They are, on the whole, relatively small organisations operating at local or community level and function on a non-profit making basis for the benefit of their members. It seems appropriate that they should be entitled to provide will-making and probate services subject to the safeguards in section 78.
From the word go, I was against the idea of the banks having the right to deal in probate and so on, because I felt that institutions that had the power to give money and to look for it back could easily have an influence on people that would not be to their benefit. At this stage I am surprised that, in the interests of equity, credit unions will be enabled to operate in that area. While I know they would perhaps not have the same ruthless pursuit of money as banks, will it not cause a slight difficulty in that one lending society will be able to do it and the other one will not?
They are a different type of organisation.
Yes, but anyone who owes money should have independent advice when it comes to doing anything with money. In the long run if you are getting advice from the person who gave you money you can take it that the interest will be on their own behalf. They will try to make sure that whatever agreement is reached will favour them more than the borrower. I can accept that there is a slight difference between banks and credit unions but at the same time they are financial institutions.
It is ironic that we are dealing with what was originally probably one of the most contentious sections of the Bill at the dimming of the day when everybody is tired. However, the Progressive Democrats welcome the fact that those sections which propose to allow banks and buildings societies to engage in services traditionally undertaken by solicitors, such as conveyancing, etc., have been removed. We believe that they have been removed in the public interest. The original motivation for allowing the opening up of that work to banks and building societies was founded in stopping any restrictive practices.
However, as the Minister has admitted, there is plenty of competition within the legal profession and among solicitors. That is in the public interest. There would be a serious conflict of interest if the banks and building societies were involved in such work while lending money at the same time. There would have been a danger that the banks would have taken the lucrative work and would not have been interested in ordinary conveyance. Their interest in commercial work would have been to the detriment of the continuing success of many small firms of solicitors who get a slice of that action at present. That work buttresses the viability of small practices.
I am also concerned that, having taken this giant step in policy, it is left open to credit unions. It is anomalous and the Minister has not justified his decision to allow credit unions to involve themselves in the making of wills and in probate services. The National League of Credit Unions is a well organised and reputable organisation. However, I would be concerned about standards in credit unions around the country and whether they would have the wherewithal and professional competence to deal with complicated matters of probate and will making. The Minister says there is not the same danger of conflict of interest. He says the credit unions are altruistic and that there would be no question of them behaving like vultures looking for business. It would be seen as part of their general service to the consumer and particularly to consumers in poor circumstances.
Is the Minister satisfied that adequate standards will prevail? Is it envisaged that only solicitors employed by the credit unions would be involved in will making and probate services? If not, I would be concerned that there might be a danger of shoddy workmanship. This Bill seeks to address the problem of shoddy workmanship. Probate and will making is getting more complicated in the context of family law and I fear that people who avail of such services in credit unions might be given incorrect and unprofessional advice. Such advice would not be given out of malice — quite the contrary. The people involved in credit unions are caring and community conscious individuals. However, I would be concerned about the standard of the advice. I would be concerned that incorrect and negligent advice would be given, particularly on will making, which is a complicated matter due to marital breakdown and other complications.
: I welcome the extension of this facility to credit unions because they enjoy the confidence of the public. I have not heard of credit unions getting into trouble. They are well supervised and most if not all credit unions would have an accredited solicitor to advise them on such matters. The credit unions would be conscious that if they are guilty of negligence that they would be open to legal action. The Minister can correct me if I am wrong in this regard. The services would stay within the legal profession in so far as the solicitors would be employed by the credit unions.
The provision regarding credit unions responds to many of the arguments made on Second Stage about conflicts of interest. It is true that credit unions either cannot or would not wish to bring clients under pressure in the same way as banks or building societies frequently do in order to have their business completed in a particular way or place. I do not have a problem with credit unions being allowed to engage in probate services.
However, I share some of Deputy O'Donnell's concern. I used to act on behalf of two credit unions. In both cases they are almost exclusively run by voluntary personnel who, although well meaning and hard working, do not have financial or legal expertise. I would be concerned that the level of advice — given with the best intentions — might not necessarily meet the standard people should be entitled to expect. Perhaps we are going too far in assuming that each and every credit union will provide these services. In reality, only the larger ones will. However, although I do not have a problem in principle with the provision, that issue could perhaps be covered by regulation.
I share Deputy McDowell's point of view. The section does not bring this system into operation. It does not state that henceforth credit unions can provide will making and probate services. Subsection (2) states:
The services referred to in subsection (1) of this section may be provided by credit unions in accordance with the provisions of regulations made under this section and in compliance with the requirements of this section.
We are giving ourselves the right to introduce regulations to cover this matter. The Minister for Justice may make the regulations. She will be obliged to consult with the Minister for Enterprise and Employment before the regulations go into effect. The regulations, under subsection (3), will cover such matters as the protection of persons for whom services are provided — in other words, an adjudication system of complaints — secure that adequate compensation is available for such persons in respect of negligence, fraud or other dishonesty — in other words, the compulsory insurance by analogy with the solicitors' profession — and:
(c) (i) the extent to which and the manner in which services provided under this section would require the involvement of persons qualified to practice as solicitors within the meaning of the Principal Act, and
(ii) the qualfications and experience of personnel generally engaged in the provision of the services. . .
The regulations — before they are approved by the Minister and a second Minister — will be such as to make the playing pitch level and the people in respect of whom the services are provided will be fully protected. We have no intention of approving regulations which will leave people vulnerable.
The remarks of Deputy McDowell and others about credit unions are correct. Credit unions do not put the same pressure on people as banks. They are not as rapacious as banks or large financial institutions. One never hears of people being imprisoned or evicted at the behest of credit unions. They are different institutions. They are owned by the members and are there to help the members, unlike the banks which in their glossy advertisements say they will look after all our problems. They will, until we owe them money. Then we can see how well they look after us.
We and the Minister for Enterprise and Employment have no intention of making regulations which do anything less than level the playing pitch and secure adequate protection for the consumers of those services when they are provided by credit unions.
Amendment agreed to.
Section 78 deleted.
Question: "That section 79 be deleted from the Bill" put and agreed to.
NEW SECTION.
Acceptance of amendment No. 141 involves the deletion of section 80 of the Bill.
I move amendment No. 141:
In page 89, before section 80, to insert the following new section:
80.—(1) The Minister may, by regulations, made after consultation with the Minister for Enterprise and Employment, require a credit union to establish, or join in establishing, and to maintain and fund a scheme or schemes for the investigation of complaints against a credit union in relation to any services provided or any act done by such a credit union under the provisions of section 78 of this Act.
(2) Without prejudice to the generality of subsection (1) of this section, regulations under this section may make provision in relation to any one or more of the following—
(a) the establishment and administration of a scheme,
(b) the manner of appointment of an independent adjudicator to conduct investigations,
(c) the matters to be subject to investigation under the scheme,
(d) the grounds on which a complaint must be based,
(e) the powers of, and procedure to be followed in the conduct of investigations by the adjudicator,
(f) the circumstances in and the extent to which determinations are binding,
(g) the procedures for the making of complaints,
(h) the publication of the adjudicator's findings.
(3) Subject to subsection (4) of this section, the reference of a complaint under a scheme established under this section shall not affect the rights of any person to have a dispute determined in any other manner provided by law.
(4) Where on a complaint under a scheme established under this section the parties concerned agree that a determination in accordance with the scheme shall be binding on them and the scheme provides for such an agreement, then the determination shall be binding on the parties.
(5) Every regulation made by the Minister under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which the House has sat after the regulations is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.".
The new section which I propose to insert contains technical changes consequent to the amendments already discusssed in relation to sections 78 and 79. The effect of the new section 80 will be to require a credit union, under regulations that the Minister is empowered to make, to establish, join and fund a scheme for the investigation of complaints in relation to the provision by the credit union of probate and will making services under section 78 of the Bill.
With regard to the investigation of complaints, is there compensation?
The mechanism for complaining that the credit union did not draw up the will properly or——
We have been discusing the increase in the solicitors £250,000 compensation fund. Is there any point in making a complaint when one's affairs are bungled and one cannot get compensation?
No, the regulations allowing credit unions to operate in this way will not go into effect until regulations are in place to the satisfaction of the Minister for Justice, with the concurrence of the Minister for Enterprise and Employment, that people afflicted by dishonesty or other malpractice on the part of credit unions or their officers will have exactly the same remedies as those afflicted by the dishonesty of solicitors. That is the intention.
Could it not have been included? The provision relates to funding for schemes to investigate complaints and there is no follow through provision for compensation. Perhaps regulations will provide for this but would it not have been better if it was in the Bill?
If I can devise a subsection to indicate there will be equality in the regulations I will do so.
Amendment agreed to.
Acceptance of this amendment involves the deletion of section 80 from the Bill. Is that agreed? Agreed.
Section 80 deleted.
Sections 81 to 83, inclusive, agreed to.
Title agreed to.
Report of the Select Committee.
I propose the following draft report: "The Select Committee has considered the Bill and has made amendments thereto. The Bill, as amended, is reported to the Dáil."
Report agreed to.
Ordered to report to the Dáil accordingly.
I thank all those who participated in the debate. I thank the Minister and his officials. He was most forthcoming and accepted many amendments from the Opposition. This shows how important the committee system is. We saw it working extremely well today. I also thank the Clerk of the committee for his co-operation and assistance.
The committee will meet again tomorrow in private session at 11 o'clock for a briefing on the Family Law Bill, 1994. The public session will begin at 11.45 a.m.
The Select Committee adjourned at 7.35 p.m.