Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

Amendment No. 185 refers to section 90. It is being revised by the drafters to improve the flow and clarity of the text. It incorporates the best aspects of the existing section 68 of the Solicitors (Amendment) Act 1994 in respect of the obligation on solicitors to provide their clients with written fees estimates and makes significant improvements upon it. This is a key and innovative section in the Bill as regards legal costs transparency and will also apply for the first time to barristers. It sets out that legal practitioners will have to provide clients with a written legal cost notice written in clear language that is likely to be easily understood by the client. Such notice will set out either the legal costs that will be incurred or, if that is initially impossible to know due to the presence of variables, it will set out the basis on which legal costs are to be calculated. Factors such as the stages in the litigation process, cost of outside expertise, financial consequences for the client and withdrawing or losing the case are all to be covered where relevant. In addition, the legal practitioner will be under an obligation to inform the client of any emerging factor that would significantly add to the estimated cost for the client and a new notice will have to be provided. A ten-day cooling off period is allowed and, as an added protection for clients, legal practitioners may not engage counsel, expert witnesses or other service providers without first gaining confirmation from the client. Legal practitioners will also be obliged to provide any clarification in respect of the notice whenever so requested.
Section 91 allows legal practitioners and their clients to make agreements as to fees for services. This is a continuation of the status quo. The text has been enhanced since publication to make it clear that such agreements may still be amenable to adjudication by the legal costs adjudicator where appropriate.
Section 92 is another transparency-related section. It sets out in detail all the constituent items to be included by a legal practitioner in the final bill of costs provided to the client. It will describe in the form of an itemised statement the legal services provided, the time spent and other relevant factors. It has been enhanced since publication to ensure that any fee-related agreement between the legal practitioner and the client is set out clearly in writing. It also sets out the preliminary steps in respect of the communication and resolution of any disputed item. It allows barristers to provide their bills of cost through the solicitor concerned, who shall provide them to the client immediately upon receipt.
Section 93 places an obligation on legal practitioners to attempt to resolve disputes around legal costs with their clients before resorting to making a formal application to the legal costs adjudicator. This is in keeping with the Bill's desire to encourage mediation and other informal resolution avenues. In support of this, the section also provides a new clock-stopping mechanism whereby the time taken in attempting to resolve a dispute is disregarded within the timeframe for making an application to the legal costs adjudicator.
Regarding Opposition amendment No. 189, I note Deputy Collins's absence, but perhaps I will nevertheless address it. Deputy Collins's proposed amendment is based on section 76 of the Finance Act 1982, which inserted a new section 5(4A) into the VAT Act 1972. It provides that VAT is payable on fees for services even where the supplier of the service is not legally entitled to recover payment of the fees. The effect of it is that VAT has been payable on barristers' fees since September 1982. As this part of the Bill's amendments do not impinge on the VAT regime, I am not willing to accept the Deputy's amendment. As I understand it, because barristers are not legally entitled to sue for fees payable to them, the Revenue Commissioners have accepted in practice that VAT on barristers' fees is payable upon receipt of the fee by the barrister rather than by reference to the date when the fee note is issued to an instructing solicitor. I have received submissions from interested parties asking me to ensure that the Revenue Commissioners continue to treat barristers' fees in this way in the event that a provision is inserted in the Bill to allow them to sue for their fees. I do not, as Minister for Justice and Equality, have the jurisdiction to dictate to Revenue how it should treat any category of taxpayer. Moreover, the Bill does not yet provide that barristers can sue for their fees. So, amendment No. 189 would be premature and may yet be irrelevant. While a provision to recover barristers' fees is being considered for insertion on Report Stage, the appropriate wording has not yet been found in conjunction with advisory and Parliamentary Counsel. I would also point out that the legislation that the Deputy refers to only places an obligation on barristers to pay VAT. It does not provide for the specific treatment of the VAT concerned. In these circumstances, the amendment would not do what the Deputy presumably wishes it to achieve.
Quite clearly, if we are to have provisions in the Bill that allow for direct access by members of the public to members of the Bar for non-contentious business and there are other possibilities depending on the outcome of the consultative process, in fairness to barristers it will be important that there is a clear provision to ensure that, should a barrister undertake work on behalf of a member of the public and not be paid for that work, in the absence of a solicitor being part of the relationship the barrister can properly sue to recover fees properly due to the barrister. Indeed, if the legislation were not to address that issue adequately, it would leave a very major lacuna in the legislation that would be inappropriate.