Alan Shatter (Dublin South, Fine Gael)

I propose to take Questions Nos. 44, 66, 72 and 78 together.

In the Programme for National Recovery 2011-16, the Government made a commitment 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". The Legal Services Regulation Bill 2011, published on 12 October, provides the statutory framework for meeting all of these commitments. By the same token, the Bill supports the urgent objectives of structural reform, national competitiveness and economic recovery contained in the EU-IMF-ECB Memorandum of Understanding, while taking account of the recommendations for reform made by the legal costs working group and by the Competition Authority. I had the opportunity to brief the EU-IMF-ECB Troika on the provisions of the new Bill on Monday, 17 October. The Troika considered the Bill to have met both the spirit and the letter of the Government's relevant undertakings.

The Bill provides three levers of sustainable reform. There will be a new and independent legal services regulatory authority with responsibility for oversight of both solicitors and barristers, an office of the legal costs adjudicator to assume the role of the existing Office of the Taxing Master, which is being conferred with enhanced transparency in its functions. The legal costs regime will be brought into the open with better public awareness and entitlement to legal costs information. There will be an independent complaints mechanism within the new regulatory authority to deal with complaints about professional misconduct and this will be supported by a new independent legal professions disciplinary tribunal. These three levers of change are mutually reinforcing in terms of oversight, standard-setting, enforcement and redress. For example, as well as providing a modernised framework for the adjudication of disputed legal costs, the Bill makes the issue of an excessive bill of costs one of those matters which may be considered as misconduct when a complaint is made to the new regulatory authority.

Part 9 of the Bill sets out, for the first time in statute, a set of legal costs principles that are to guide the assessment of legal costs, the key principle being that of reasonable costs for appropriate work done. Lawyers will be required to notify clients in a more detailed and intelligible way about legal costs. Key changes include the fact that both solicitors and barristers will now have to provide proper costs information. A client has to be issued with a notice of costs as soon as he or she has given instruction to a lawyer and the notice must also specify a cooling-off period allowing the client to consider whether or not to continue with the case.

The process of notification of costs to clients is ongoing and responsive to any developments in the conduct of a case and is not just an initial, once-off exercise. When legal work is completed a detailed bill of costs has to be issued, which also explains that the options of negotiation, mediation or adjudication are available to resolve any disputed aspects of the bill. Contravention of the notification requirements is misconduct and may be taken into account to disallow costs in a costs adjudication.

Arbitrary costs practices, such as imposing the two thirds of senior counsel rule in charging for the services of a junior counsel, are abolished. Recruitment to the role of legal costs adjudicator, previously confined to solicitors of ten years standing only, is now extended to people with a wider skill-set, that is, to similarly qualified barristers and legal-costs accountants. The office of the legal costs adjudicator - currently the Office of the Taxing Master - will be made subject to the governance and accountability practices, such as annual reporting, applied to public bodies generally. The office will be able to issue legal costs guidelines and will, for the first time, maintain a register of decisions on adjudications. This will publicise both the reasoning and outcomes of legal costs adjudications.

It will be possible to publish decisions made by the office of the legal costs adjudicator in regard to family law cases. Provision is made in section 82, subsections (3) and (4), to publish such a decision and the reasoning for it. Only certain information will be withheld, for example, the name of the party to a decision, the name of a child where one is involved and such other information as is protected by rule of law, including, for instance, the in camera rule. This means that the basis of cost adjudication decisions arising from family law cases will become transparent in a way that has not been possible up to now, while the in camera rule and other relevant privacy provisions continue to be observed. A case progression initiative has been operating in recent years in the Circuit Court for family proceedings and such case management has been mandatory for family law cases since October 2008. Under this system cases are listed before a county registrar for a hearing to determine whether they are ready to proceed. I participated in the launch of the Dolphin House initiative last May involving the Courts Service, the Legal Aid Board and the family mediation service of the Family Support Agency. This initiative encourages parties into an alternative mediation process with a special focus on cases involving the welfare of children.

The principles relating to legal costs, which are contained in Schedule 1 to the Legal Services Regulation Bill, include "the time and labour that the legal practitioner has reasonably expended on the matter" concerned. The legal costs adjudicator is obliged, under subsection 95(5) of the Bill, to ascertain reasonably the time taken to carry out the work concerned as part of his or her determination of the appropriateness of work done and the reasonableness of its cost. While solicitors and barristers alike will have to inform clients of any time-based rates that may apply to their work, they will also have to satisfy the other principles relating to legal costs that have been set out. This is considered the best way to achieve a balance between time and the other factors that relate to legal costs, for example, the complexity, urgency and priority of a case. The intention is to avoid creating a situation where over-emphasis of time as the determinant of legal costs could incentivise inefficiency in the handling of cases or be unfairly exploited as a "plodders charter".

Additional information not given on the floor of the House

The interests of client consumers and legal practitioners will be balanced under this Bill better than ever before, to the mutual benefit of both. Under the provisions of the Bill everyone will be clearer about what should be happening when legal services are being sought or provided, how much these services will cost and where they can go to for independent adjudication if they have a complaint or wish to settle a dispute about legal costs. These measures, combined with the proposed new business structures for legal practitioners set out in the Bill, will provide a basis for enhanced competition and efficiencies in the legal sector and will lead to a reduction in legal costs. The Bill represents a package of reforms that will be of long-term benefit to the legal professions, consumers and the national economy.

See this speech in context