Barry Andrews (Dún Laoghaire, Fianna Fail)

Solicitors at present carry on business either as sole traders with unlimited civil liability or as partnerships with collective and individual unlimited civil liability. The provisions of section 7 of the Attorneys and Solicitors Act 1870 restrain a solicitor in seeking to limit his or her liability in a contract agreed with a client. This puts Irish solicitors at a competitive disadvantage in commercial law against UK law firms, which may limit their liability by contract with clients consequent on the repeal of the 1870 Act in the UK some years ago.

UK law firms which are active in Ireland in commercial law matters limit their liability as a matter of routine. The anomalous nature of the current position becomes especially apparent when in substantial projects an Irish firm of solicitors must join with other professional advisers to provide a multidisciplinary team and the other advisers can limit their exposure while the Irish solicitor cannot. In practice, this acts as a disincentive to an Irish firm to organise or lead a consortium of advisers since the primary responsibility for services provided by the consortium will often have to be accepted by the leading firm.

Section 26 (a)(1), in amendment No. 17, will update the existing 19th century statutory provisions, which the UK has repealed, to take account of current commercial and competitive realities. The change will bring Irish law in line with current UK law and allow Irish law firms to seek and do business in competition with foreign law firms on equal terms. It will address the anomalous situation where an Irish and a UK firm agree a limit on liability which can then be enforced by the UK firm, but may not be enforceable by the Irish firm owing to the continued application of the Attorneys and Solicitors Act 1870.

Section 26(a)(2), in amendment No. 17, clarifies that the existing consumer protection provisions in the Sale of Goods and Supply of Services Act 1980 and the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 and 2000 will continue to be available to clients of solicitors in the event that they make a contract which limits their solicitors' liability. In addition, section 26(a)(3), in amendment No. 17, includes a safeguard for the client's protection in the form of a provision preventing the enforcement of such a contract to the extent that it falls below the general statutory minimum amount of professional indemnity cover required of solicitors which currently stands at €2.5 million. This safeguard would especially continue to protect the interests of non-commercial clients of solicitors in areas such as conveyancing.

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