Seán Conlan (Cavan-Monaghan, Fine Gael)

I welcome the opportunity to speak to this important Bill. I will begin by declaring an interest in that I am a member of the Law Society of Ireland. The aim of the Bill is to reform the regulation of the legal profession and remove restrictions to trade in the provision of legal services. It also seeks to increase competition by changing the method by which the profession is regulated and introducing new education and training arrangements and new business structures in the form of legal partnerships and multidisciplinary practices. The Bill provides for independent complaints-handing procedures and new cost adjudication mechanisms.

I have listened closely to the arguments made by the Minister in support of the new arrangements. I welcome his invitation to make constructive suggestions to enhance the regulatory framework set out in the Bill and achieve its key objectives. I also welcome the Taoiseach's comments that the only decision taken thus far by the Government on the Bill was the one to publish it. I will support any measures which will increase transparency in regard to costs, enhance complaints-handling procedures, improve the regulatory framework governing the professions, increase competition and lower the cost of legal services to the consumer.

However, I have serious reservations about aspects of the Bill, as drafted. I am concerned that it may fail to achieve its key objectives in a number of instances and may instead lead to less competition, higher costs to consumers and a diminution in access to justice for the public. I have spoken to representatives of the Law society of Ireland, the Dublin Solicitors Bar Association, the Bar Council of Ireland and my local Bar association in Monaghan, all of which have raised serious concerns about aspects of the Bill. The Law Society of Ireland's main concerns centre on the threat posed to the independence of the profession by excessive Government control. It is also concerned that the running costs of the proposed new regulatory authority could lead to higher costs to practise for solicitors and barristers which will ultimately be passed on to consumers. It has further concerns regarding fair procedures in the area of complaints handling, the provisions relating to misconduct and the absence in the Bill of provisions to transfer staff from the Law Society of Ireland to the new authority.

The Bar Council of Ireland, while supporting the measures dealing with increased transparency in regard to costs, has major reservations that aspects of the Bill go against the recommendations made in the Competition Authority's report of 2006. The council contends that fundamental and far-reaching reforms of the type proposed should be properly evaluated and shown to be in the public interest prior to enactment. It points out that no regulatory impact assessment was carried out before the Bill was published.

All of the representations I have received express major concerns about two aspects of the proposed legal services regulatory authority, namely, its lack of independence and its cost. Given that the proposed body will not be independent of the Executive, there could at some time in the future be a level of Government control over the body which runs directly contrary to the core value of independence in the administration of justice. The Bill has been widely criticised by various international groups, including the Council of Bars and Law Societies of Europe, CCBE, the International Bar Association and the American Bar Association. These concerns must be addressed.

The professions have queried the proportion of the authority's members to be nominated by the Minister, seven out of 11, in comparison with similar statutory professional bodies. For example, the appropriate Minister nominates five out of 25 members to the Medical Council, nine out of 21 to the Council of the Pharmaceutical Society of Ireland, four out of 19 to the Veterinary Council of Ireland, and five out of 37 to the Teaching Council of Ireland

The establishment of the legal services regulatory authority could introduce a new and enormous level of cost to the legal system. It is effectively a new quango and the bureaucratic regulatory superstructure proposed by the Bill seems likely to lead to an increase in costs. As it stands, the legal profession will have to bear the entire cost of this new quango and that cost will inevitably be passed on to consumers. Direct regulation of the legal professions by an enormous quango is not an efficient or effective way to regulate. It is also inconsistent with the independence of the legal professions. The Competition Authority recommended independent oversight regulation, a model involving an independent regulator overseeing the front-line regulators, namely, the Law Society of Ireland and the Bar Council of Ireland. This model is consistent with international best practice and arguably far more effective and cost efficient.

The business structures for the delivery of legal services proposed in the Bill such as multidisciplinary practices and legal partnerships will damage rather than enhance competition in the delivery of services. The proposed business structures are likely to lead to increased costs and a reduction in choice. The proposals have the potential to make the profession more elitist and prevent people entering or developing a practice by concentrating the best lawyers in a small number of large city firms. The proposed structures will undermine small solicitors' firms throughout the country who rely on ready access to the independent Bar to compete on a level playing pitch with the large city firms. FLAC has expressed concern about the proposed structures. Legal partnerships and multi-disciplinary practices were not recommended by the Competition Authority, the Legal Costs Working Group or the programme for Government. Of major concern is that no independent economic assessment of this or other models of business structure for the delivery of legal services was undertaken prior to publication of the Bill. Chambers, legal partnerships, LPs, and multi-disciplinary practices, MDPs, were not recommended for Northern Ireland, which has a more comparable legal system and population to the Republic of Ireland than does England or Wales. The views of the Northern Ireland review group are as relevant to the Republic of Ireland as they are to the North.

The US once planned to expand multi-disciplinary practices. However, issues such as sharing profits with accountants and other professionals and possible conflicts of interest arose. This movement ended abruptly with the fall of Arthur Andersen as a result of its association with Enron. Arthur Andersen was alleged to have given dubious legal, tax and accountancy advice to Enron. The US Sarbanes-Oxley Act 2002 was introduced following the collapse of Enron and corporate accounting frauds, which effectively ended the trend of multi-disciplinary networks established by the "Big 5" accounting firms in the US.

The Bill, as drafted, presumes or presupposes that chambers, LPs and MDPs will be introduced, which is regrettable. The Bill would be a better if it provided for full and proper consideration by an independent body of the consequences of the introduction of these new structures. Such a huge regulatory change needs to be properly considered before implementation. In so far as public consultation is required regarding the establishment of the multi-disciplinary practices and so on, there is a requirement under this Bill thatthe authority consult with the public. It is merely enabled to consult with the legal professional bodies if it deems it appropriate to do so. Why is there such need to shun the professions in this manner? There are obvious alternatives to the type of regulation proposed in the Bill which would comply with the requirements of the troika , including an independent regulator of the nature and type recommended by the Competition Authority in its 2006 report. The regulator would be independent of the legal professions and of Government and would oversee and supervise regulation by the Law Society and the Bar Council. This would be a more efficient and effective form of regulation than that proposed in the Bill. It would also be considerably less costly. The Bar Council has suggested that the independent regulator would carry out research into business structures for the delivery of legal services in the State. This would enable the Oireachtas to be provided with a comprehensive assessment of the types of business structures that should be allowed to operate the delivery of legal services in the State in the interests of the public, not the legal profession.

I have a number of specific concerns about this legislation. The proposed new complaints system by removing a filtering section could lead to gridlock of the complaints committee and disciplinary tribunal.Regarding complaints generally, there is no limit on the category of persons entitled to complain. In theory an aggrieved witness, member of the public sitting in the gallery in the court room, relation or friend of an aggrieved litigant or any person could make a complaint. The Bill does not appear to contain any provision with regard to retrospective application. Does this legislation provide for the making of complaints with regard to past conduct? Furthermore, no limitation period governing the time within which a complaint must be made, is included.

On levies, a levy is to be introduced to fund the authority. This will be met by the profession, with 10% to be paid by the Bar Council, 10% by the Law Society and the remaining 80% on a pro rata basis between the Bar Council and the Law Society in proportion to complaints made against each and expenses arising. This levy will make continuing to practice or entry to the profession much more expensive for solicitors and will result in increased costs for practitioners and, in turn, the client.On funding, the authority is to have 43 appointed members, including a chief executive, committees to assist and advise, advisers, consultants, inspectors and a significant number of staff, which the Minister will have the power to appoint. The Bill contains no ceiling in regard to costs that may be incurred by the LRSA, its staff or consultants engaged, thus providing no incentive for control of costs.. The view of the solicitors profession is that this will give rise to an enormous and unnecessary super-structure surrounding the regulation of the legal profession and legal services, which may become somewhat analogous to other fraught Government bodies.

On inspectors, the authority will have the power to appoint such members of staff as it thinks fit to be inspectors. These inspectors will under section 28 have the power to attend, with or without prior notice, at the place of business or places of business of a legal practitioner. These powers will be exercised without any warrant from a court of law or any independent review prior to execution. Misconductis broadly defined in section 45 of the Bill. Apart from obvious misconduct, it includes any act or omission likely to bring the profession into disrepute and includes, unusually, issuing a bill of costs which is excessive. What is an excessive bill of costs? Is it a bill that is reduced on taxation or a bill that is significantly reduced on a percentage basis by, say, more than 15% of the costs claimed? If one is fighting a costs issue, what is the determining feature of "excessive"? This is not defined and there are no guidelines in this regard.

An appeal lies to the High Court from the disciplinary tribunal, with various sanctions ranging from censure restriction to being struck off. The right to appeal lies to the Supreme Court. I need clarification on this. There appears to be no appeal from the complaints committee.

I am not convinced that legal costs will decrease as a result of this Bill. Rather, the big city firms and established senior and junior counsel will be the big winners to the determent of the consumer, small practices and newly qualified solicitors and barristers.

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