I propose to take Questions Nos. 143 to 145, inclusive, together.
As the Deputy will be aware, the Legal Services Regulation Bill 2011 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. The Bill and its structural reforms are also a key deliverable under the Government’s Medium Term Economic Strategy 2014-2020. The published Regulatory Impact Analysis (RIA) of the Bill, in keeping with the relevant Guidelines of 2009, focuses on how best to implement these pressing Government commitments. The remaining amendments for Committee Stage, which cover Parts 7 to 9 of the Bill, have been circulated for consideration in advance of the resumption of that Stage on 12 February 2014.
As I have previously stated in Replies to the House, although a preliminary Regulatory Impact Analysis (RIA) had been in preparation for the Bill, because of the urgently prescribed time-frame under the EU/IMF/ECB Programme, it did not prove possible to complete it for issue when the Bill was published. Deputies will be aware that the relevant Guidelines specifically allow for a Regulatory Impact Analysis to follow a Bill in such exceptional circumstances as applied in this instance. Moreover, in the subsequent period priority also had to be given by the Government to the enactment of the Personal Insolvency Bill as a competing legislative priority under the EU/IMF/ECB Troika programme. This overlap provided a convenient opportunity to further develop the RIA for the Legal Services Regulation Bill while taking account of intervening developments and the consideration of submissions from stake-holders. It also allowed me to publicly anticipate, including at the closing of Second Stage, a series of enhancing amendments to the Bill which were duly outlined in the RIA - I have already introduced several of these amendments in the course of the Bill's ongoing Committee Stage.
I have previously outlined the situation in relation to the introduction of multidisciplinary practices to the Deputy in my detailed Written Reply to Question 441 of 17 December 2013 tabled in her name. As I pointed out on that occasion, the then Fair Trade Commission, in its 'Report of Study into Restrictive Practices in the Legal Profession' published in March of 1990, recommended that there should be the greatest possible freedom allowed to individual solicitors and barristers in offering their services to clients. The Solicitors (Amendment) Act of 1994 took account of this by making respective provision in sections 70 and 71 for the possible establishment of incorporated practices and for the sharing of fees by solicitors with non-solicitor partners arising from either a partnership or an agency agreement in what amounts to a multidisciplinary practice. I am at a loss, therefore, to understand why a Deputy and member of a reform alliance would wish to turn the clock back twenty years in relation to this earlier reform initiative.
The Report of the Competition Authority of December 2006 entitled, 'Competition in Professional Services: Solicitors and Barristers', put forward detailed findings and recommendations in relation to the more competitive and consumer-focussed provision of legal services in the State. Indeed, the Report provides a series of substantial observations that clearly identify and respond to the market concentration of legal services resulting from the delivery of those services within the confines of narrow historical models that could not be adequately responsive to the needs of current markets, business technologies and consumer behaviour. I cannot accept, therefore, the import of the Deputy's Question, again on this occasion, that the interests of consumers and our international competitiveness would be better served by ignoring or reversing the clearly identified need for structural reform. That is to say, by the retention of anti-competitive or restrictive business models in a sheltered legal services sector that would remain immune to the kind of structural reform that, in every other services sector, has proven essential to sustainable economic recovery.
The Deputy will similarly be aware, as detailed in my Written Reply of 17 December 2013, that numerous jurisdictions including England and Wales, Canada and Australia, have introduced new and more customer-focussed legal business models in the intervening period since the Competition Authority's Report of 2006. These "alternative business structures" (ABS) can involve the traditional legal services provided by barristers and/or solicitors or combine them, in what are known as "multidisciplinary practices", with those of accountants, insurance brokers, conveyancers or other service providers to serve clients on a more cost-effective basis. To ignore these changes would leave legal practitioners and the consumers of their services in this jurisdiction at a growing competitive disadvantage and would continue to disregard almost a quarter of a century of recommendations from public bodies going right back to the Fair Trade Commission in 1990. Consequently, in looking to the future, the Legal Services Regulation Bill includes several measures aimed at opening up the provision of legal services in a way that takes account of the emergent legal business models and provides for their effective, independent regulation. I would remind the Deputy that the RIA, in underscoring remaining obstacles to competition and the global transformation of legal services, does in fact address multidisciplinary practices including in terms of their provenance, rationale and recognised advantages for legal practitioners. The precise nature of the provisions enabling alternative business structures, the relevant powers required by the new Legal Services Regulatory Authority and the modalities of operation and management of legal partnerships and multidisciplinary practices are matters I have been actively reviewing and considering in detail with officials of my Department. In so doing, I have been able to take account of the regulated roll-out of new legal business structures in comparable economies and jurisdictions, the relevant reviews of their implementation and the related submissions received. The outcome of these deliberations is reflected in the enhanced provisions for Part 7 of the Bill which I have circulated, with Cabinet approval, for the coming session of Committee Stage.
As I have previously outlined to the Deputy, the proposed alternative business structures include new opportunities for legal practitioners to establish the types of multidisciplinary practices mentioned; for solicitors and barristers to participate in legal partnerships; for legal practitioners working for private or State entities to be allowed to act as advocates in court proceedings for their employers; for practising barristers who share premises and costs as a group to be allowed to advertise themselves as such; for solicitors to employ barristers in a practice and for direct access to barristers in non-contentious matters that do not involve the holding of clients monies. These are precisely the areas of structural reform that would, as stated in paragraph 84(g) of the RIA, remain prohibited were the option of taking "no policy action" to be adopted by the Government. As far as paragraphs 25 and 26 are concerned, the actual contradiction that the RIA highlights, in a very balanced way, is that the willingness of the legal professions to participate on a highly selective basis in global networks or niche ventures merely highlights the policy inconsistencies of those remaining barriers to the more open provision of legal services that remain in place, including in several instances under their professional codes, and run contrary to the interests of consumers and the economy.
