Wednesday, 27 February 2013

Questions (37)

Brendan Smith


37. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform if he is seeking further reductions in legal costs incurred by the State across all Departments and State bodies; and if he will make a statement on the matter. [10407/13]

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Written answers (Question to Public)

State bodies are the largest single consumer of legal services, and so it is critical to ensure that the State is achieving maximum value for money, while at the same time ensuring that it does not distort an important market. My Department is reviewing both the level of expenditure on, and the procedures that are being used to procure, legal services.

The paper "Reducing Public Expenditure on Legal Services: Avoid, Minimise, Recover" published in the Expenditure Report 2012, details a range of measures which have already been taken to reduce expenditure as well as making recommendations for further areas where savings may be achieved. Specific reductions which have already been made include:

- The Financial Emergency Measures in the Public Interest (FEMPI) Act 2009 which imposed reductions on levels of professional fees, including legal fees. The fees payable to State Solicitors, who act on behalf of the Director of Public Prosecutions in cases of indictable prosecution outside Dublin, were reduced by 8% with effect from May 2009 under the terms of the Financial Emergency Measures in the Public Interest Act 2009 (No 5 of 2009). The Act also provided that I carry out a review of the operation, effectiveness and impact of the amounts and rates fixed by regulation under the Act before the 30 June every year, and consider the appropriateness of these amounts and rates having regard to any change of circumstances. I have conducted an annual review of the fees payable to State Solicitors in each year since the reduction of 8% in 2009 and have not found cause to vary the fees. The review due for 2013 has not yet commenced but it is intended to be undertaken in the very near future.

- From peak expenditure levels, the Chief State Solicitor’s Office (CSSO), has made reductions in spending of 28.6%, the Office of the Attorney General (AGO) 14.4%, and the Office of the Director for Public Prosecutions (DPP) 11.3%.

- The Office of the Director of Public Prosecutions (DPP) pays set rates for specific services supplied by legal practitioners. In 2011 the Office implemented a 10% cut in these rates in response to a similar measure imposed by the Department of Justice on fees paid for the Criminal Legal Aid Scheme.

- The State Claims Agency is reducing fees paid to barristers by 25% and is establishing a legal costs unit which will handle third party costs associated with the Mahon and Moriarty Tribunals.

- A range of Offices have unilaterally sought and achieved reductions in legal fees. As part of the review of this area underway in my Department, a number of further cost-saving measures are being examined, including greater use of Alternative Dispute Resolution mechanisms; greater use of competitive tendering procedures; and more informed structures in departments to enable better case management and control access to legal services. The paper published in the Expenditure Report 2012 also sets out some guiding principles to ensure that the State interacts with legal matters in the most cost-effective manner possible:

- Avoid - all expenditure on legal services must be warranted, and the decision on whether a particular service is required at all, could be provided in-house, or needs to be sourced externally, should be made by personnel with the requisite expertise.

- Minimise - when external legal services are deemed necessary, they must be procured in the most cost-effective manner possible.

- Recover - when the State is involved in a successful case, every effort should be made to recover costs from the other party. This involves proper maintenance of the case file by those practitioners representing the State.

My Department will shortly issue a new Circular on Procurement of Legal Services and Managing Legal Costs. This Circular clarifies and underlines the importance of the obligations upon public bodies to comply with the procurement rules and guidelines in retaining legal services. The Circular outlines appropriate competitive procedures that can be used in the engagement of legal services and sets out a number of approaches and tools for public bodies to use in managing legal costs.

The Legal Services Bill, which will soon be entering Committee Stage, and which my colleague the Minister for Justice & Equality intends to become law by the end of the year, contains measures which will help to ensure that the broader market for legal services operates in an efficient and cost-effective manner. The new Office of the Legal Costs Adjudicator, which will replace the Office of the Taxing Master, will improve the predictability and openness of legal costs by producing transparent guidelines and publishing the results of its cost determinations.

Officials in my Department are examining whether the market for Government advocacy work is currently operating in fair and open manner, and conducting a comparative analysis of the best methods of procuring counsel for State work.