Wednesday, 27 February 2013

Questions (226)

Peadar Tóibín


226. Deputy Peadar Tóibín asked the Minister for Justice and Equality the efforts he has undertaken to reduce service costs such as legal costs on business. [3242/13]

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Written answers (Question to Justice)

The Legal Services Regulation Bill 2011, which has completed Second Stage and is due to commence Committee Stage during this Session, gives legislative expression to the commitment in the Programme for Government to "establish independent regulation of the legal professions to improve access and competition, make legal costs more transparent and ensure adequate procedures for addressing consumer complaints".Furthermore, as a sectoral objective under the EU/IMF/ECB Troika Memorandum of Understanding, it supports the objectives of structural reform, national competitiveness and early economic recovery, building on the relevant recommendations of the Legal Costs Working Group and the Competition Authority. The Bill is, therefore, a key component of the Government's strategy to reduce legal costs in this country by way of increasing our competitiveness, both sectorally and nationally.

The Legal Services Regulation Bill makes extensive provision, particularly in Part 9, for a new and enhanced legal costs regime that will bring greater transparency to how legal costs are charged along with a better balance between the interests of legal practitioners and those of their clients. The Bill sets out, for the first time in legislation, a series of Legal Costs Principles. These are contained in Schedule One and enumerate the various matters that may be taken into account if disputed costs are submitted for adjudication. These cost transparency measures will apply to barristers as well as to solicitors.

Under the Bill it will no longer be permissible to set fees as a specified percentage or proportion of damages payable to a client from contentious business. It will no longer be permissible to charge Junior Counsel fees as a specified percentage or proportion of Senior Counsel fees. Legal practitioners will be obliged to provide more detailed information about legal costs from the outset of their dealings with clients. This will be in the form of a Notice written in clear language which must be provided when a legal practitioner takes instructions. Among other things, the Notice must, as set out in Section 90 of the Bill, disclose the costs that are involved, or, where this is not practicable, the basis upon which such costs are to be calculated. A cooling-off period is to be allowed for the consideration of costs by the client. When there are any significant developments in a case which give rise to further costs the Bill provides that a client must be duly updated and given the option of whether or not to proceed with the case in question.

The Bill also provides that a new Office of the Legal Costs Adjudicator will deal with disputes about legal costs – at present these are dealt with by the Office of the Taxing-Master. The new Office, headed by a Chief Legal Costs Adjudicator, will modernise the way disputed legal costs are adjudicated with greater transparency. The Office will be empowered to prepare Legal Costs Guidelines. It will establish and maintain a publicly accessible Register of Determinations which will include the outcomes and reasons for its determinations about disputed legal costs. Two new Taxing-Masters have been appointed by public competition under the enhanced qualification criteria of Part 14 of the Civil Law (Miscellaneous Provisions) Act 2011 to prepare the way for these modernisation measures.

Taking account of developments and the pressures being experienced by legal practitioners in other open common law jurisdictions the Bill seeks to address the danger of Irish law firms and legal practitioners operating at a cost disadvantage. Several types of new alternative business structure models have been, or continue to be, rolled-out in England and Wales, Scotland, Australia, Germany, Netherlands and parts of Canada in direct competition with Irish legal service providers - for example, solicitors, accountants and insurers practising as one business or "multi-disciplinary practice" providing their complementary services in a pooled and more cost-effective setting. In other provisions the Bill lifts existing restrictions on direct professional access to a barrister and on barristers who share premises or costs from advertising themselves as such a group. The Bill also allows that a barrister in employment may provide legal services for his or her employer. The Bill, therefore, contains numerous measures aimed at opening up the provision of legal services to more responsive and more competitive legal service models building on the enormous advances that have been made in supporting business technologies.

Through its extensive legal costs transparency provisions and its provision for modern and more competitive business alternatives, the Legal Services Regulation Bill is providing an opportunity to ameliorate the cost to business and other consumers of legal services while also creating new business opportunities for the legal services sector. I am confident that this concerted approach to reducing legal costs will be of lasting benefit to all consumers of legal services and contribute to our early national economic recovery.