The Legal Services Regulation Bill 2011, which has completed Second Stage and is continuing Committee Stage which commenced on 17 July, 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 Deputy will wish to be aware that the then Fair Trade Commission, in paragraph 11.35 of 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 to decide themselves upon the most suitable form of business organisation through which to offer their services to clients, with adequate safeguards to ensure the preservation of standards.' The Solicitors (Amendment) Act of 1994 took account of this Report 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 multi-disciplinary practice. Consequently, these two forms of new practice model continue to be provided for in statute since that time and are not merely a recent innovation.
Subsequently, the 'Report of the Legal Costs Working Group' published in November 2005 and that of the Competition Authority of December 2006 entitled 'Competition in Professional Services: Solicitors and Barristers', put forward detailed findings and recommendations in relation to greater transparency in the legal costs regime and by way of supporting the more competitive and consumer-focussed provision of legal services in the State. Indeed, the Competition Authority Report of 2006 provides a series of substantial observations that clearly identify and respond to the market concentration of legal services already resulting at that time 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 as put, that the interests of consumers and our international competitiveness would be better served by the mere 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 itself essential to sustainable economic recovery at this time.
As the Deputy will be aware, numerous jurisdictions 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 "multi-disciplinary practices", with those of accountants, insurance brokers, conveyancers or other professionals to provide seamless solutions for 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, not to mention continuing to disregard almost a quarter of a century of recommendations from public bodies such as the Fair Trade Commission. 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. These will include new opportunities for legal practitioners to establish the types of multi-disciplinary 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.
It must be recognised that alternative business structures or multi-disciplinary practices and their attendant regulatory frameworks have been, or continue to be, rolled out in other open economies like our own such as England and Wales, Scotland, Australia, Germany, Netherlands and parts of Canada, including British Columbia, Quebec and Ontario and that there is a wealth of information, regulatory precedent and academic analysis now available on them. The Legal Services Act 2007 provided for the introduction of ABS, including multi-disciplinary practices, in England and Wales - over 240 licences for ABS have been issued to date. The Legal Services (Scotland) Act 2010 also allows for ABS that include multi-disciplinary practices. In Canada, the legislation relates more narrowly to multi-disciplinary practices. Along with officials of my Department, I have been actively reviewing and considering in detail how the introduction of ABS is taking place in all of these jurisdictions along with the relevant literature and those submissions received. I am also considering the various issues of probity and regulation so that they will continue to be addressed in the development of the Legal Services Regulation Bill.
The genesis and development of policy in this area, culminating in the policy imperatives of the Programme for Government and the EU/IMF/ECB Troika Memorandum to which I have already referred, are set-out in the Regulatory Impact Analysis of the Legal Services Regulation Bill that is available on the website of the Department of Justice and Equality via the internet link, www.justice.ie. Amendments to the Legal Services Regulation Bill are being considered by Government with a view to their be made available prior to the resumption of Committee Stage of the Bill which is expected to take place in the New Year.
