Amendment No. 133 is cognate on amendment No. 132.
SECTION 69.
I move amendment No. 132:
In page 72, line 19, before "service" to insert "legal".
"Legal services" is a defined phrase in section 2 of the Bill.
I accept the amendment.
Amendment agreed to.
I move amendment No. 133:
In page 72, line 20, before "service" to insert "legal".
Amendment agreed to.
I move amendment No. 134:
In page 72, to delete lines 37 to 39.
The purpose of this amendment is to delete the provision preventing the Law Society of Ireland from prohibiting advertising. The Progressive Democrats hold strong views on this issue and even Deputy O'Malley, who held different views at an earlier stage, now agrees that to allow advertising would be ill advised.
The vast majority of solicitors who provide a good service at a reasonable cost have no interest in engaging in advertising. The committee addressed earlier the proliferation of "slip and sue" incidents against local authorities and there is a danger that if solicitors are allowed to advertise their fees in the Yellow Pages, this kind of undersirable practice will proliferate even further. The measure will encourage that small minority of members, who resort to cutting corners and are more concerned with earning money than the quality of the service they provide, to resort to this practice.
A development of this kind is not in the public interest. Whatever about advertising, the practice of fee advertising is one which the profession takes seriously. In this respect, my party has debated the issue at length and is of the view that it is not in the public interest to allow solicitors to advertise their fees. It would fuel the impetus towards the proliferation of litigation which is so prevalent.
There were figures today in the press illustrating the huge amount of compensation claims aginst Dublin County Council and this is directly related to a decision to allow solicitors to advertise their services. While there is nothing that can now be done about the advertising of services, if there are fee advertisements, such as offers of a free bike or a free Sony system with every conveyance or offers of all conveyances at £99, they are not in the interests of either the public or the status of the profession and it will encourage all of the bad aspects I have outlined.
I have spoken to many members of the profession and not one agrees with the notion of allowing the advertising of fees. The original motivation was to free up the market and not to have restrictive practices.
However, even with regard to other aspects of the Bill, because there is already plenty of competition among the legal profession, certainly among solicitors, there has been a drawing back from the principle of allowing the free market full rein.
It is in the interests of the public that the Minister is withdrawing certain sections of the Bill to allow unrestricted access to conveyancing, probate and so on by the banks and other agencies. Likewise on this issue, there is a public interest in not allowing solicitors to advertise their fees and I hope the Minister will see fit to accept the amendment by deleting lines 37 to 39 of the section.
Nothing does more damage to the solicitors' profession than advertisements on television that services will be free if a case is not successful. If doctors were to advertise that if people consulted them when they were feeling sick or depressed there would be no fee if there was no diagnosis or no cure, it would make a laugh of the profession.
This measure encourages people who have been involved in accidents to consult solicitors. No profession could tolerate this situation and I hope lines 37 to 39 of the section will be deleted because they are not good for anybody.
Deputy McDowell and Deputy O'Donnell spoke on this issue on Second Stage. There was considerable logic in the views expressed, and in those expressed by Deputy O'Donnell again today, and by Deputy Browne. The weakness in the case is that the arguments put forward are more against allowing advertising per se, rather than allowing an extension of advertising, sanctioned by the Incorporated Law Society of Ireland since 1988, to fee advertising.
The effect of the amendment is to delete the provisions in section 69 which prevent the society from prohibiting the advertising of any fee or charge. The position is that solicitors are entitled to advertise their services according to the rules of the society, and many choose to do so. However, fee advertising remains prohibited by the society and this provision of the Bill arises from a recommendation of the former Fair Trade Commission that solicitors should be permitted to advertise their fees or prices for the service they provide.
The commission was of the view that the present prohibition on the advertising offers by solicitors was unfair and contrary to the common good. In its view, fee advertising could lead to increased efficiency, a reduction in costs and the making available of routine legal services at a reasonable cost to a much enlarged market.
Lifting the prohibition on fee advertising is part of the policy to reduce legal costs promised in the Programme for a Partnership Government. It is a consumer driven measure. The commission argued that it was necessary for consumers to have accurate information on the availability of services and to allow consumers to choose the most appropriate combination of price and quality. It also considered that the prohibition on the advertising of fees in particular would tend to limit competition in fees.
I acknowledge that the Law Society has gone quite some distance on advertising. In 1988, it lifted its prohibition on solicitors charging less than the level of fees prescribed in various statutory scales of fees. That opened up the possibility of welcome price competition in the provision of solicitors' services. The Fair Trade Commission's views was that if price competition is allowed, it follows that advertising of fees should not be forbidden and freedom to advertise fees is essential for effective price competition.
I would be the first to accept that it will not be possible for solicitors to advertise fees for every service they provide because of the nature of much legal work. The Bill does not compel solicitors to advertise their fees for every or any service. It will be a matter for individual solicitors or firms to decide in the light of the legal services they provide, the competition for those services and their business objectives.
The Law Society is empowered to control advertising standards. We are supplementing and strengthening those powers under section 69. This will enable the society to further regulate advertising standards and the quality of advertising. Under subsection (4), the society will be empowered to prevent advertising likely to bring the profession into disrepute, is in bad taste, reflects unfavourably on other solicitors, is false or misleading in any respect or contrary to public policy. I am aware of the concern among solicitors about false or misleading advertisements. This provision will give the society the power to clamp down immediately on any advertising of this type.
The Consumer Information Act, 1978, prohibits false or misleading indications about goods, services and prices given in the course of a business, trade or profession. It applies to statements made by the legal profession in providing its services and is enforced by the Director of Consumer Affairs. He has the power to request the withdrawal or alteration of a misleading advertisement, to apply to the High Court for an injunction in respect of a misleading advertisement and to prosecute offences for misleading advertisements.
I am aware of the argument that the cheapest goods and services are not always the best ones and I do not dispute that this is sometimes the case. There are important new safeguards in the Bill to protect the public from unacceptable standards of work by solicitors. It is because of the public concern expressed about the failure of the system of self regulation of the profession to protect the consumer under existing legislation and structures, that provision was made in the Bill to strengthen the Law Society's powers to deal with negligent or shoddy services provided by solicitors. The Bill also provides for the appointment of an independent adjudicator to consider complaints about the handling by the society of complaints against solicitors.
I want to see a better and higher standard of service for the clients of solicitors. Of course, I am determined that the interests of those clients will be better protected. This is one of the policy objectives of this Bill. I expect the society will be able to deal adequately with any risk to the public of shoddy or careless work under the new powers which the Bill confers on it. That a solicitor does not advertise his or her fees does not imply that he or she provides a better service than another solicitor who does. Neither does advertising nor failure to advertise guarantee a quality service.
There is concern that allowing solicitors to advertise their fees may result in increased litigation. The Law Society is also being empowered, therefore, to deal with ambulance chasing type advertising in subsection (4) (f) which will enable it to prohibit advertising which "comprises or includes unsolicited approaches to any person with a view to obtaining instructions in any legal matter".
Much of the argument made is against advertising per se. However, the reality is that the Law Society which is very concerned about this extension, allowed solicitors to advertise their services as and from 1988. The Fair Trade Commission saw fee advertising as a logical extension of that. It is easy to argue against allowing a profession such as the legal profession to advertise. However, when it has the right to advertise it is very difficult to argue logically against extending that to fee advertising.
In the United Kingdom, the solicitors' profession has had for some time the right to advertise its fees. It is impossible to be statistically accurate about that, but I have many contacts in the solicitors' profession in the UK and from discussions with those individuals and the UK law society it is generally felt — I cannot put it any more strongly than that — that the right to advertise fees has tended to somewhat reduce charges, particularly for routine services. It is known that the right of UK solicitors to advertise fees has not led to any horrendous consequences which would not have occurred had the right to advertise services not extended to the advertising of fees.
With respect, the Minister is being selective in his loyalty to the recommendations of the Fair Trade Commission. He should not be at liberty to quote in his favour the requirements of the Fair Trade Commission on this point and then go blatantly against its recommendations on other points.
This is not a simply matter of competition and opening up the market. On one hand we are trying via this legislation to introduce higher standards in the profession, to introduce a range of measures which give security and tilt the balance in favour of the consumer. On the other hand, by allowing fee advertising we are exposing unprotected members of the public to the type of advertising which will encourage them to opt for a solicitor on the basis of price.
Most consumers of legal services are not in a position to judge the quality of a service based on price before committing themselves to engaging the services of that solicitor. If they see a low price offer — for example, for a conveyancing or family law matter — they will opt for that because people are reluctant to spend hard earned cash and they know that litigation and any involvement with law is expensive. They will engage a solicitor, about whom they know nothing, on whom they have had no recommendation, who has a full page advertisement in the Yellow Pages offering a judicial separation for £100 with free follow up mediation if it does not work out. That is what will happen.
It is not as simple as comparing aspects of other services to legal services. There is a huge public interest in protecting the quality of service given to consumers because the ordinary consumer is at a huge disadvantage when seeking the services of a solicitor. The purpose of this legislation is to tilt the balance in favour of the consumer and help him to make an informed choice. If we unleash this blight of advertising legal services on the basis of cost we will encourage shoddy solicitors to advertise low cost, low quality services, with no guarantee to the consumer. I urge the Minister to reconsider. I would like to put this amendment to a vote.
My argument is different. I was thinking exclusively of the advertisements which state there is no fee. I should possibly be dealing with the section concerning standards in advertising. I am not very worried about fees. A large variety of goods and services are advertised and people will eventually get their fingers burnt if they consistently opt for the cheap article. The Law Society should deal with advertisements which do not specifically mention fees but that the client pays the fee if he is successful. This would address persons known as ambulance chasers.
Deputy O'Donnell mentioned tilting the balance in favour of the clients which is precisely why I am doing this. I am trying to tilt the balance in favour of clients from the point of view of the cost of the service given.
I also got the submission from the Law Society to which Deputy O'Donnell implicitly referred in her argument that when dealing with legal services, the consumer is not in a position to determine the quality of the service in advance. That argument is a mirage because many people provide goods and services ranging from dish washers to motor cars and they all advertise prices. Is it logical or correct to say that the majority of people who purchase these goods or avail of these services are in a position to determine in advance the quality of those goods or services? The argument simply does not stand up.
The Fair Trade Commission report proposed to allow banks and financial institutions do probate and conveyancing in an attempt to increase competition and thereby further reduce prices. I am deleting those provisions largely on the basis that there is already enough competition. The Law Society and the profession have voluntarily moved towards price competition. I am trying to perfect price competition by allowing people, if they wish, to advertise their fees. Nobody is compelled to advertise fees.
I know Deputy O'Donnell is making a sincere argument. However, the argument that people would not be aware of the service they would get would be valid and apply with much more force in a jurisdiction such as the United Kingdom where there are fewer personal relationships between people and their lawyers and fewer people know each other. In that instance one is dealing with a less closely knit society. In this jurisdiction people generally tend to know which solicitors can best deal with different matters.
I consulted solicitors in the United Kingdom as well as the UK law society and the horrendous consequences about which Deputy O'Donnell has spoken have not descended on the United Kingdom. I cannot see any logical reason why they should descend here. We can argue about the pros and cons of this until we are blue in the face, but the best way to judge what will happen ultimately is to observe what has happened in a legal jurisdiction which is the same as ours and where the argument against fee advertising would apply with much greater force. The appalling consequences postulated did not happen in the United Kingdom and they will not happen here.
On a more conciliatory note, I will look at Deputy O'Donnell's argument between now and Report Stage. However, to date I have had verbal submissions from the Deputy on Second Committee and Stages, from the Law Society and from a number of individuals in the profession and I remain unconvinced. However, I am prepared to think about it.
I support the Minister in allowing the public to at last feel that they are not being exploited every time they go to a lawyer. Allowing the advertisement of fees enables people to ascertain what they will be charged and to shop around. This will be welcomed by the public. The Minister should stand his ground on this point. It will make a big difference to fees. As the Minister said, it worked in Britain where members of the legal profession looked upon it with a somewhat jaundiced eye. It is certainly worthwhile and I support the Minister's argument.
I largely concur with the argument made by Deputy O'Donnell. There is a distinction between advertising generally and fee advertising. When people look for a solicitor they want to know what the solicitor does. As a member of the profession I have frequently been asked what I specialise in. It is quite reasonable that solicitors should be allowed or even encouraged to let people know exactly what they do. It is a different matter to ask them to peg prices for work where it is frequently difficult to judge in advance how much it will cost.
The Minister has provided in the Bill that people should be given an estimate and, where that is impossible, a reasonable indication of the cost. I accept that is right and proper. He is probably aware that following the relaxing of restrictions on advertising in recent years there has been, in a very limited number of cases, a certain amount of ambulance chasing on the litigation side and cut price deals on the conveyancing side.
Many of us are aware of a very limited number of solicitors who have said that one can remortgage a building for £99. It seems a good deal on the face of it for the client but I am not sure that it helps to maintain standards within the profession. There is some evidence that the contrary is the case.
In Ireland people tend to go to a solicitor on the recommendation of somebody else. In many ways that is the most reliable way, if one does not have a solicitor. If we change the thrust of that by encouraging people to go to the Golden Pages and opt for somebody advertising a price for a service, I am not sure it would be to the benefit of the profession and ultimately and most importantly the client. I ask the Minister to look at it again.
I remind Members of the commitee that we are strengthening the Law Society's hand in dealing with false and misleading advertising. I am aware that possibly the majority of legal services are not amenable to quoting prices. It would not be possible to say that one will operate a complex trust for £300 regardless of the complications between one year and the next. The Law Society who feel strongly about this will be prepared to take action if such an advertisement appears.
There are some legal services which are amenable to advertising a price. Everybody is agreed on provisions in this Bill which provide that a solicitor will now have to set out his charges on the basis of his charges, in advance. It is only a short step from that to advertising an indicative price.
I recently encountered a case in Limerick where a person had purchased a house from a local authority and wanted to transfer the house to her sister. She wanted me to ascertain the legal fees and the various charges. The Land Registry fees and so on are fixed and have to be added on. I rang five solicitors and was quoted five prices for a routine transaction. Some of the prices were quite close but the gap between the bottom and the top price was quite large in view of the size of the transaction involved.
I do not see any objection to allowing solicitors advertise prices for routine legal services rather than having people shop around. Perhaps it is not very difficult for people to shop around but it would be more convenient if somebody could advertise prices and allow people to see the approximate cost. They have to get separate advice on the other matters, fixed charges, Land Registry charges, etc.
This was debated in the United Kingdom and people put up tremendous arguments that there would be cataclysmic consequences and the whole order of society, as they knew it, would collapse. It did not collapse. It is impossible to be statistically accurate about this but the general feeling in the UK was that it tended to have a downward pressure on prices.
In deference to the arguments made which I respect even though many of them are more appropriate to a case against advertising per se rather than fee advertising, I will consider them between now and Report Stage. This is as far as I can go at this point.
Some solicitors charge a standard rate, between £65 and £90 an hour. This is where there would be competition for people who want to consult a solicitor about a problem but who do not want to be ripped off. They may not want to have to telephone around but it would be a big help to know a solicitor's costs.
I urge the Minister of State not to move too far away from what he already has. People want something to curtail the excesses that bring the profession into disrepute. I am not worried about big corporations and companies who pay fees from company overheads but about "Joe Soap" who has to pay from his own pocket, whose fee is not tax deductible.
I will examine all the arguments that have been made. Prices charged depend on the cost of providing the service. Deputy O'Donnell and others have made this point and I recognise that there are ways in which the legal cost of providing the service can be reduced. The Government is committed to doing something about that. The Minister for Justice is preparing legislation which will go a long way to reduce some of those costs which force the profession to charge higher prices than it would otherwise have to charge.
I am glad the Minister of State has accepted the points made on Second Stage that much of the delay and expense in litigation is not just the fault of solicitors and the profession generally. Complete infrastructural reform is required to deal with delays in the court system and the general administration of justice, which equally contributes to the high cost of litigation. The Minister of State, in his defence of the status quo, repeatedly referred to Britain and its experience when similar proposals were introduced there. He said there were messages of doom and gloom that never came to pass. Does the Minister of State have any statistics on the British public's appetite for litigation, given the proliferation of slip and sue incidents we have encountered here? We have a real problem and the proliferation of fee advertising will not assist in solving it. People here have a voracious appetite for slipping and suing.
I take the Deputy's point that one way in which we could reduce that type of litigation is to get rid of the no foal no fee system. If any Member wishes to propose that, I will listen. I do not propose to get rid of it as it has enabled a great number of genuine cases to be brought which would not otherwise have been brought.
Amendment, by leave, withdrawn.
Section 69, as amended, agreed to.
SECTION 70.
I move amendment No. 135:
In page 73, subsection (1), line 9, to delete "may" and substitute "shall".
The word "shall" has been used throughout the Bill.
No.
It has and the Minister of State argued that point with my colleague. Section 70 (1) states:
Notwithstanding section 64 of the Principal Act, the Society, with the concurrence of the Minister given after consultation with the Minister for Enterprise and Employment, may make regulations providing for any one or more of the following matters,. . .
Why is "may" used? Surely "shall" is the appropriate word in that situation.
This amendment would require the Law Society to make regulations providing for incorporated practices, that is solicitors practising as members of limited liability companies. Section 70 is an enabling provision only. It does not imply final or settled views on any aspect of this matter. Under the provisions of section 70 no arrangements to introduce incorporated practices could go ahead without the approval of the Minister. There is no immediate intention to make regulations under this section but we are legislating for the future and for rapidly changing times.
The Law Society has been consulted about this provison and favours its inclusion in the Bill. However, it is not appropriate to compel the society to make regulations at this time. If and when there is a strong demand for the establishment of solicitor companies, as distinct from solicitor partnerships, the question of making the regulations can be considered. The Bill provides a suitable opportunity for the establishent of incorporated practices and sets out the parameters of any regulations the Minister may make under the section. The society has not made up its mind whether it will go down that road but it wants to have the right to do so if it chooses in the future.
Amendment, by leave, withdrawn.
Queston: "That section 70 stand part of the Bill" put and declared carried.