Seanad Éireann díospóireacht -
Tuesday, 19 Jul 2016

Vol. 247 No. 1

Legal Services Regulatory Authority: Motion

Senator Martin Conway

I move:

That Seanad Éireann, noting that the Government agreed on 13th July 2016 to propose, for the approval of Seanad Éireann, the appointment of the persons concerned to be members of the Legal Services Regulatory Authority, and pursuant to section 9 of the Legal Services Regulation Act 2015, approves the appointment, with effect from the establishment day to be appointed by the Minister for Justice and Equality in accordance with section 7 of that Act, by the Government of the following persons to be members of the Legal Services Regulatory Authority, six of whom shall hold office for a period not exceeding four years from the date of his or her appointment as the Government shall determine and five of whom shall hold office for a period of three years from the date of their appointment in accordance with section 10(2) of that Act:

Angela Black, Don Thornhill, Deirdre McHugh, Gerry Whyte, Stephen Fitzpatrick, Dermot Jewell, David Barniville, Joan Crawford, Nicholas Kearns, Geraldine Clarke and James McGuill.

Minister of State at the Department of Justice and Equality (Deputy David Stanton)

I am speaking on behalf of the Tánaiste and Minister for Justice and Equality who regrets that she cannot be present owing to other official commitments.

I thank the Seanad for giving me the opportunity to make my remarks on this important motion which heralds the coming into being of the new Legal Services Regulatory A uthority which was legislated for in the Legal Services Regulation Act 2015. Under the Act, the Government is the appointing authority for the members of the new Legal Services Regulatory Authority. However, these appointments must first be approved by resolutions of both Dáil and Seanad Éireann. At its meeting of 13 July 2016 the Government agreed to propose, for consideration by this House in the motion, the appointment of named persons to be members of the new authority. I am, therefore, seeking the approval of the House for their being nominated under the motion to be appointed by the Government as the members of the new authority. The persons concerned are the nominees of the nominating bodies named in the Act and this is the sole process whereby the names have been selected. I will return to that subject since it is important to note the independence safeguards contained in the particular nominating process in this legislation.

In tandem with consideration of the motion by the House, the Tánaiste has now signed a commencement order in respect of certain provisions of Parts 1 and 2 of the Legal Services Regulation Act 2015, as necessary to support the start-up of the new Legal Services Regulatory authority. Further parts of the Act will be commenced on a phased basis in the autumn as the new authority gets up and running and ready to take over key areas such as inspections, public complaints and the new legal business models. The sequencing of these further commencements is being planned very carefully.

As Senators will appreciate, the establishment of the authority and the assumption by it of regulatory oversight of all legal practitioners in Ireland, including handling of complaints against legal practitioners and the authority’s responsibility to oversee the operation and opening up of the legal services market in Ireland, are all major public regulatory steps. Great care will have to be taken to ensure the steps will be correctly executed and that the replacement of existing regulatory regimes will leave no gaps.

Under the motion, it is also being proposed that the relevant appointments shall be with effect from the establishment day of the new regulatory authority which the Tánaiste will fix by order to be 1 October 2016. I understand the Tánaiste will be making the requisite order to that effect shortly under section 7 of the Legal Services Regulation Act. The setting of 1 October 2016 as establishment day will give momentum to the establishment and coming into operation of the new Legal Services Regulatory Authority. It will also provide greater focus in the implementation of the structural reforms now set out in the Legal Services Regulation Act.

In very broad terms, the main levers of this reform are as follows. First, there will be the new and independent Legal Services Regulatory Authority, with responsibility for oversight of both solicitors and barristers. Second, there will be an independent complaints system dealing with legal professional misconduct which will provide a first port of call for the public in making complaints independent of the legal professional bodies. There will also be a new and independent legal practitioners’ disciplinary tribunal to adjudicate on serious misconduct in regard to both solicitors and barristers. Third, there will be an enhanced legal costs regime, bolstered by a set of legal costs principles, which also places more extensive obligations on both solicitors and barristers to keep clients informed about the details of their legal costs. Separately, the new office of the legal costs adjudicator will assume the role of the existing Office of the Taxing Master and keep a public register of its legal costs determinations. Fourth, there will be a framework for new legal business models. These will include the early introduction of legal partnerships between barristers and solicitors, or between barristers, limited liability partnerships for solicitors and public consultations on other business alternatives such as multidisciplinary practices.

To underpin the independence of the new Legal Services Regulatory Authority, the members of the authority are nominated to the Government by ten nominating bodies specified in section 9 of the 2015 Act. These bodies have been purposely set in the legislation to represent a balance between the interests of lawyers and those of consumers and other stakeholders in the regulation of legal services and of legal costs. Membership is also staggered by the drawing of lots at the first meeting of the authority as a result of which there will be some four-year members and some three-year members. This ensures the continuity of expertise and functions of the new regulatory authority.

The authority is to consist of 11 members, of whom a majority, that is to say, six members, including the chairperson, are to be lay persons nominated by the six prescribed non-legal bodies. The remaining five members are nominated by the prescribed legal bodies. Each prescribed body, with the exception of the Law Society of Ireland which nominates two members, has nominated one person for appointment as member of the new authority. In the case of all of the bodies except the Law Society of Ireland, each body was also required to nominate a substitute nominee of the opposite gender to their primary nominee in order to facilitate gender balance - the authority must have no fewer than four members who are women and no fewer than four members who are men. The Law Society of Ireland has two nominees, reflecting the fact that solicitors outnumber barristers being regulated under the 2015 Act by four to one, with some 8,000 practising solicitors as compared with some 2,000 practising barristers.

The key requirement of the Legal Services Regulation Act is that the nominees must have knowledge and expertise in specified areas, for example, in the provision of legal services, competition, legal training and education, dealing with complaints against members of regulated professions, the needs of consumers of legal services, business and commercial matters and professional standards regulation. The nominees and their nominating bodies are as follows: Angela Black, Citizens Information Board; Don Thornhill, Higher Education Authority; Deirdre McHugh, Competition and Consumer Protection Commission; Gerry Whyte, Irish Human Rights and Equality Commission; Stephen Fitzpatrick, Institute of Legal Costs Accountants; Dermot Jewell, Consumers Association of Ireland; David Barniville, Bar of Ireland; Joan Crawford, Legal Aid Board; Nicholas Kearns SC, Honourable Society of King’s Inns; and Geraldine Clarke and James MacGuill, Law Society of Ireland.

The Government also agreed at its meeting of 13 July 2016 to appoint one of the nominees under the motion, Dr. Don Thornhill, to be chairperson of the new authority. The power is given to the Government under the 2015 Act to make that appointment, but this is, of course, subject to the candidate having been first approved as a member of the authority by a motion of both Houses. Among his many achievements as a holder of senior public offices, Dr. Thornhill has led the National Competitiveness Council in its campaign to cut legal costs for consumers and enterprise. He is a respected public figure and will bring much experience, knowledge and clout to the role of chair. As such, he should provide the inaugural authority with the direction and vision needed to be a successful and highly regarded independent regulator that will enjoy the confidence of the public for the years to come.

I believe Senators will agree that the nomination and appointment procedures for the regulatory authority which include seeking the necessary approval under the motion have great integrity by way of protecting the interests of all stakeholders concerned, with the independence of lawyers in the discharge of their duties to their clients and the courts. It is a model that was introduced by Government amendment in direct response to independence concerns that were raised in 2011 at the time of initial publication of the Legal Services Regulation Bill. The approval of this House for appointment of the persons being nominated to be members of the new authority under the motion would be a key moment in the history of the legal services and legal costs regimes. By the same token, such approval would also enable the new members of the authority to hit the ground running, independently recruit their chief executive and thereby spearhead the coming into operation of the new Legal Services Regulatory Authority. I commend the motion to the Seanad for its considered agreement.

Senator Catherine Ardagh

I thank the Minister of State for addressing the House. I have an interest in legal services legislation as I am a solicitor in a small solicitors' practice with two practitioners and three support staff. I cautiously welcome the motion as I think it will give the public and legal practitioners more certainty and confidence when dealing with each other and with professional bodies.

The Act intends to bring transparency and end the system of self-regulation which applied in the past to both the Bar of Ireland and the Law Society of Ireland. Most professions today, including auctioneering and the Garda, are succumbing to the idea of being regulated by an authority. For example, the Garda Commissioner came before the Policing Authority recently and the regulatory authority for auctioneers was set up in order to protect both auctioneers and the public. In that light, I very much welcome the idea of moving away from self-regulation in the legal profession in order that the process of how solicitors and barristers work is more transparent and the public have more confidence in what happens with their work.

I understand the cost of setting up this authority will be €1 million but that ultimately it will be self-financing. As I outlined, I am a sole practitioner. There are many costs involved in being a sole practitioner and it is not some big gravy train, as some of the big firms might be. We are a small business and we struggle every month with rates, accommodation and staffing. This authority will mean another fee and, given the Law Society of Ireland will still be in place, this will double up on professional subscriptions. Therefore, I would like to ensure this cost is not just put onto the bills for the public at the end of the day and transferred down in that way. It is a point the Minister of State should be mindful of when the authority is set up.

I welcome the idea of limited liability partnerships. This will give more protection to practitioners than to the public because it will give practitioners a corporate personality, meaning they will not be sued. As a result, their neck is not on the line and they can hide behind the veil of corporate responsibility. I believe this will increase investment in legal professions and will ultimately increase the standard of legal services, all of which will be passed on to the public.

On the composition of the authority, it is welcome that the board will mostly comprise lay people because, as a result, the public interest will be at the forefront of the authority's day-to-day running. Most importantly, I am glad that the complaints mechanism will be put to the fore of the authority in order that complaints will be dealt with expediently and professionally, which will be to the benefit of both the public and the members who are being complained of.

I was a barrister and then transferred to work as a solicitor, which is a very difficult and costly transition. I hope the Act will get rid of any barrier in order that practitioners can be both barristers and solicitors and the transfer will not be a big issue. To take a European perspective, the Continent has lawyers without any difference between barristers and solicitors. While I do not know how my colleagues in the Law Library will like it, I think it is to be welcomed.

I was a barrister and then transferred to work as a solicitor, which is a very difficult and costly transition. I hope this Bill gets rid of any barriers so that practitioners can be both barristers and solicitors and the transfer is not a big issue. To take a European perspective, the Continent has lawyers without a difference between barristers and solicitors. While I do not know how my colleagues in the Law Library will like it, I think it this is to be welcomed.

Senator Niall Ó Donnghaile

As the Minister of State has put in a long slog in the House today, he will be glad to hear I will probably not use all of my speaking time.

There was some concern in my party about the delay in producing the text of the motion. As the appointments process has been ongoing since January, I am not sure why that was the case. I wanted to have that concern logged.

Regardless, we welcome the motion and are supportive of the Legal Services Regulatory Authority getting off the ground as efficiently and effectively as possible.

Sinn Féin is going to reserve judgment for the moment on whether the Act and the new regulatory body will be effective in lowering costs for persons accessing the legal system. The responsibility will be on the Legal Services Regulatory Authority to demonstrate its independence from the legal profession, a point touched on by the previous speaker. In order to show that it is effective, we suggest the Oireachtas justice committee invite members of the authority to appear before it at a later stage to discuss their work. I hope this is something they would be willing to do as part of regular engagement and interaction and to bring feedback to Members of both Houses through the committee. It will, of course, be two years before they report back formally; therefore, such a move might be an opportunity for them to come to the committee to sustain that engagement with the Parliament.

We are hopeful too that the new authority will address matters of codes of conduct, admission requirements to the legal professions, conflicts of interest and the long-standing need to address the barriers to public interest litigation within this jurisdiction, as the Minister of State is aware. I need not tell anyone in the Chamber that conflicts of interest are a major issue for the public when it comes to major firms. This problem has generated a series of confidence issues among the broader public. I do not think I need to go into particular cases because people will be well aware of them.

While the motion is a step in the right direction, it is clear that real changes to the legal profession will take at least another decade. That is why I would like to emphasise the importance of engagement with the Parliament. I appreciate this will not be done through the Minister of State, but I imagine he will consider lending his support and bringing whatever influence he can to bear to ensure authority members are engaging with us regularly and that we have a positive oversight role. This does not mean veering into interference but rather that we have an opportunity, on behalf of the people we represent, who have long-standing and understandable concerns, to ensure this body will operate as effectively as it can.

Senator Ivana Bacik

I welcome the Minister of State and this important motion to approve the establishment of the Legal Services Regulatory Authority. I should declare my interest as someone who was for many years a practising barrister and still is an external examiner for the King's Inns. Also, I know many of the nominees to the authority personally, with several of whom I have worked.

As the Minister of State and colleagues will be well aware, we had a long debate around this legislation over a protracted time. The Minister of State was the chairman of the justice committee on which I served. We had hearings on this legislation also. I feel a strange sense of déjà vu in returning to look at the make-up of the authority. However, it is welcome it has reached this stage. Many of us thought we might never get to this point. I say as much as a strong supporter of reform of the legal profession.

Senator Catherine Ardagh spoke about the potential for a merged profession. It is welcome that the Bill allows the exploration of that along with the exploration of other important reforms like the opening up of professional legal education to other bodies beyond the Law Society of Ireland and King's Inns. These are important future reforms envisaged in the Act.

I looked back over the Second Stage debate on the Legal Services Regulation Bill held in the House on 13 May 2015. At the time, I pointed out in respect of the independent Legal Services Regulatory Authority two key positive components which, I believe, are reflected in the make-up of the members that we see listed before us today. First, the Act provides for a lay majority on the authority. That is immensely important and is part of an increased momentum or culture around regulation of professions. Regulatory oversight of all professions now requires far greater input from lay persons, which I very much welcome. Second, we have a gender balance on the authority. I note that four of the 11 names are women; this represents 36%. It is a far better figure than the corresponding figure for Members of the Oireachtas.

It is clear from any reading of the Act and to anyone who is familiar with it that a key component of the new regime of oversight of the legal professions is the authority. This body is essential. As the Minister of State noted, the authority has a range of functions which are central to the carrying out of the new regime under the Act. Essentially, the authority will assume regulatory oversight of all legal practitioners in Ireland. It will handle complaints against legal practitioners. It will oversee the operation and opening up of the legal services market as well as the issues to which I have referred - remarkably important issues for the future of the legal professions - in other words, the issue of merger and the issue of legal training.

We require a robust and an effective independent authority to carry out these functions effectively. I am glad to see from the names before us that we have people who are of immense integrity and who will be well able to carry out their functions very well. It is also worth welcoming the appointment of Dr. Don Thornhill who, as the Minister of State said, has now been appointed as the chairperson of the authority. It is welcome that the establishment day has now been set as 1 October this year. All of these developments are welcome.

Will the Minister of State indicate whether there is any timeframe for the recruitment of a chief executive? Clearly, that is another important component to ensure this new authority gets up and running and hits the ground running. It has several important functions. There are several times set out in the Bill within which the authority must look at issues around future regulation of the professions. It is important that the establishment day has been set, members have been appointed and that we have a chairperson. All of these are welcome announcements but we need to know when we are likely to see a chief executive appointed in order that the authority can really begin its work properly. We all wish the authority the best for the future in the performance of its important functions.

Senator Martin Conway

Like everyone in the House, I welcome this development. I remember when the last Oireachtas started in 2011 the Minister at the time, former Deputy Alan Shatter, proposed the controversial Legal Services Regulation Bill. It was amended and watered down and evolved into what was brought over the line towards the autumn of the last Administration. Some of us would have preferred to see the initial proposals of Mr. Shatter get over the line but, obviously, many vested interests lobbied somewhat successfully to have elements of the Bill changed. However, whatever way we look at it, it is a positive development that we now have legal services legislation.

It is even more positive that we have the Legal Services Regulatory Authority because the legal profession was the one profession that was self-regulating for far too long. The people should have taken this issue by the scruff of the neck a long time ago but they did not. Thankfully, as a result of the last Administration, we are in a position to support the appointment of a fine team under an exceptionally fine chairperson, Dr. Thornhill, who will take the reins of the Legal Services Regulatory Authority. I have no doubt the authority will have singular credibility because of the calibre of the people proposed by the various stakeholders and nominating bodies. They have been approved by the Cabinet and recommended to the Houses of the Oireachtas for final approval.

It is a great day for the legal profession. It baffled me why the legal profession was so afraid of regulation and why it lobbied so powerfully and intensively on this issue. Who is afraid of regulation? No one should be afraid of regulation. Many other sectors in the country are regulated. Some of them are not as regulated as they should have been. Unfortunately, we had a culture of light touch regulation in the country and we have seen where that got us. However, the legal profession was not regulated at all. It regulated itself, which was bizarre. I do not think that happens anywhere else in the world. After much toing and froing and much lobbying we have now an Act, over which we can stand. I have often said it in the House and I will say it again: all the legislation we bring through the House can evolve, change and be amended. We will see how it works.

If the Legal Services Regulatory Authority comes back to us and states it needs more powers, we should not be found wanting in giving it more powers and amending the Legal Services Regulation Act.

It was an absolute privilege to have been a member of the justice committee for five years when the Minister of State, Deputy David Stanton, was the Chairman of the committee. We produced some very fine reports and work on the Act. One issue that the Minister of State will recall discussing in the committee was the whole question of e-conveyancing. Various people came before the committee and gave evidence on the benefits of e-conveyancing. Not alone would it save a substantial amount of money for the clients who are buying and selling property, it would also save a huge amount of time. We would have a situation where, instead of it taking a month to six weeks to process a house because of documentation going from one stakeholder to another, it would be done in a week. E-conveyancing is the way forward. Many other industries in this country are now managed effectively by ICT. There is absolutely no reason the law industry cannot embrace the very latest in ICT. I believe the Government should look at making a once-off payment available to facilitate the establishment and roll-out of e-conveyancing. Perhaps the Minister of State is not in a position to comment on that matter now and I am not expecting him to because it is somewhat off script.

What we have in terms of the Legal Services Regulatory Authority is the beginning of a long process of reforming the legal profession. I hope we will see a situation where the ordinary and decent people of this country engage in legal services in a much more competitive environment and no longer have to endure exorbitant costs. Whether it be the simple transaction of buying a house, getting legal counsel or opinion, or a more protracted and lengthy court case, hopefully the people of Ireland will get more value for money.

An Cathaoirleach

The Senator is way over time.

Senator Martin Conway

I know that the Cathaoirleach has a certain interest in this area also and I am sure he agrees with my sentiments.

An Cathaoirleach

That will not change the time restrictions.

Senator Niall Ó Donnghaile

"A" for effort.

Minister of State at the Department of Justice and Equality (Deputy David Stanton)

I thank Senators for their contributions to our discussion of the motion. It is a motion which, with a similar motion that will be put before the Dáil for its consideration on Thursday, can enable the formal appointment of the 11 nominated members of the new Legal Services Regulatory Authority. The immediate working objective is to obtain the required approval of the appointment of the nominated members by the two Houses in order that they can set about the early recruitment of their own chief executive.

I note that Senator Ivana Bacik and others questioned the issue of the appointment of the chief executive. The chief executive will be appointed by the authority, not by the Government. The authority is independent and the Government has nothing at all to do with that. We will offer job specifications and other supports to the authority. Obviously, we would be anxious to get it moving as quickly as possible in order that we can have the appointment as quickly as possible following the establishment day and that there will not be any delay. Any supports required will be made available.

Administrative provisions are being made in support of the public recruitment by the new authority for suitable and qualified persons for that post. A start-up support team is also being established and a suitable premises identified from which the new authority can commence its operations. These are the initial steps that will enable the members and the chief executive of the new regulatory authority to oversee and drive the establishment of the new legal services regulatory regime and shape it in the discharge of its powers and functions. It is planned at the stage we are now entering of setting up the new regulatory authority that it will include the phased commencement of parts of the Act such as those dealing with legal costs, the new office of the legal costs adjudicator, the role of practicing barristers and pre-action protocols.

I would like to highlight a few elements of the new legal costs transparency obligations of the 2015 Act. These will apply to both solicitors and barristers in charging clients for their services. For example, all legal practitioners will be obliged to provide much more detailed information on 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. 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 client must be duly updated and given the option of whether to go ahead with further proceedings. An aggrieved client will also have the option of applying for the adjudication of disputed legal costs by the reformed and modernised office of the legal costs adjudicators, which is currently known as the Taxing Master's office. The Act sets out, for the first time in legislation, a series of legal costs principles in support of the cost adjudication process. There will be a publicly accessible register of determinations regarding the outcomes and reasons for decisions of the legal costs adjudicators.

Following the establishment of the authority, its appointment of a chief executive and the initial commencement of parts of the Act along the lines I have just mentioned, the key provisions centred around Part 16 on the new public complaints procedures, professional conduct procedures, disciplinary procedures and the appointment of the new legal practitioners disciplinary tribunal will be commenced. The managed roll-out and commencement of these functions is planned for the autumn. This is being done in order to allow adequate time and preparation to ensure their effectiveness and success as crucial components of the new regulatory framework.

Let us not lose sight of the fact that this new complaints framework will be a regulatory watershed. Members of the public who are aggrieved at the services they have received from a legal practitioner, whether a barrister or a solicitor, will now make their complaints to the independent Legal Services Regulatory Authority. They will no longer do so through the legal professional bodies as they do at present.

Senator Martin Conway spoke about a watering down of the Act. I remind the House that the Act, when fully commenced, will provide as a matter of law that barristers and solicitors may practice through the new business model set out in the Act. That is important to note.

The new legal practitioners discipline tribunal, established under the 2015 Act, will deal with matters of serious misconduct relating to solicitors and barristers. This single independent tribunal will, in time, replace the respective and separately operating conduct tribunals that deal with barristers and solicitors. The 2015 Act also sets out a clear path to new legal partnerships, business models involving barrister-barrister partnerships and barrister-solicitor partnerships which will allow for such partnerships to open for business in competition with the more traditional lawyer structures, which will remain a practicing option.

I emphasise that the new regulatory authority will not stand still as a regulator. Under the Legal Services Regulation Act, it will conduct a programme of work consistent with its mandate. For example, it will be carrying out public consultations and reporting with further legislative recommendations over its first four years in office.

Senator Niall Ó Donnghaile spoke about the Act being kept under review. Specific provisions have been made for the conduct of periodic reviews of the operation of the Legal Services Regulation Act, the first of which is to take place 18 months after the establishment of the new regulatory authority. These periodic reviews of the Act will occur in addition to the normal annual strategic and business planning obligations of the new authority. The Competition and Consumer Protection Commission will be a part of this new exercise.

Senator Niall Ó Donnghaile also made some points about the justice committee. I thank Members for their comments about my stewardship of it in the past. I am sure the committee will also be able to engage with members of this authority, as it does with many others. It is probably one of the busiest committees in the Oireachtas, as I am sure the Senator will find out.

Under the Legal Services Regulation Act, a programme of work can be conducted consistent with its mandate. As I said, it will carry out public consultations and report on further legislative recommendations over its first four years in office. These will be in areas such as removing the existing client money and direct access restrictions relating to barristers, examining entry and training requirements for the legal professions, the possible unification of the two legal professions and the opening of the legal services market to multidisciplinary practices. Senator Catherine Ardagh commented on some of thdse issues.

In support of the planned and managed commencement of the relevant Parts of the section of the 2015 Act proposed, as I have outlined, between now and the end this year, an allocation of €1 million has been made available under the justice Vote for 2016 as set-up support for the new regulatory authority. Any funding advance from this allocation will be provided on a recuperable basis. Once in operation, the new regulatory regime will be self-funding by means of a levy on the regulated legal professions under the terms set out in Part 7 of the 2015 Act. Again, I note what Senator Catherine Ardagh said on that matter about the costs for small businesses.

As I said in my opening remarks, the Tánaiste has signed a commencement order in respect of certain provisions in Parts 1 and 2 of the Legal Services Regulation Act 2015 as necessary to support the start of the new regulatory authority. She will also very soon by order appoint 1 October 2016 to be the establishment day for the new Legal Services Regulatory Authority.

Senators' consideration of the motion has been a third key in the opening up of a new era in the regulation of legal services and of legal costs in the State. I thank the Cathaoirleach and Members for their time, support and consideration of these matters.

Question put and agreed to.

Senator Martin Conway

I propose that we suspend the sitting for ten minutes to give the Minister of State a quick break.

An Cathaoirleach

Is that agreed? Agreed.

Sitting suspended at 2.30 p.m. and resumed at 2.40 p.m.