Dáil debates

Wednesday, 9 December 2015

Legal Services Regulation Bill 2011: From the Seanad


The Dáil went into Committee to consider amendments from the Seanad.

10:50 am

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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There is a typographical error in the numbered list of amendments. Amendment No. 55 on the principal list of amendments, dated 4 December, refers to the deletion of "lines 21 and 34" on page 38, whereas the amendment made in the Seanad proposed to delete all of these lines. The text of amendment No. 55 should read: "In page 38, to delete lines 21 to 34, and in page 39, to delete lines 1 to 24."

Photo of Frances FitzgeraldFrances Fitzgerald (Dublin Mid West, Fine Gael)
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I would be obliged if, in accordance with Standing Oder 140, the Ceann Comhairle directed the Clerk to make the following minor drafting corrections to the text of the Bill: on page 83, line 36, the words "a partner of or an employee in" should be replaced with the words "a partner in or an employee of". It is a tiny textual change. On page 99, line 32, the word "section" should be replaced with the word "paragraph". These corrections are being made in the interest of textural clarity and do not affect any substantive amendment.

Photo of Liam TwomeyLiam Twomey (Wexford, Fine Gael)
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Amendments Nos. 1, 2, 167 to 174, inclusive, 181 to 183, inclusive, 187 to 189, inclusive, 196 to 206, inclusive, and 265 are related and may be discussed together.

Seanad amendment No. 1:

Photo of Frances FitzgeraldFrances Fitzgerald (Dublin Mid West, Fine Gael)
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Part 8 of the Bill deals with new business models provided for under the Bill. These are legal partnerships, which will come into effect in the second six months of next year, multidisciplinary practices, limited liability partnerships, LLPs, which are allowed for and dealt with in the Bill, and employment opportunities for barristers. The Bill as already amended in the Dáil provides for a system of regulatory oversight of such businesses by the new legal services regulatory authority. It will be recalled that amendments made to the Bill in the Dáil introduced a new research phase that must occur before multidisciplinary practices may come into existence. The essence of this aspect of the Bill's reform is that solicitors and barristers will be entitled to choose between any of a range of legal service delivery models, be they traditional solicitor or barrister models or the innovations I have just mentioned.

With regard to LLPs, I propose to introduce an option for solicitors' firms and legal partnerships to operate with the benefits of limited liability within an LLP business model, with the protection for the consumer in the form of both professional indemnity insurance and ongoing regulatory oversight by the authority.

The amendments include strong regulatory power for the legal services regulatory authority in regard to LLPs and the maintenance of a publicly available register of these. The new provisions define the circumstances in which the limited liability status is to be lost and provide for a claw-back of payments taken by partners when the liabilities of the business exceed the assets. Information is to be provided to clients and creditors in relation to the LLP, and the regulatory authority will have an enforcement power up to and including applications to the High Court to make directions on either suspension or the seizing of authorisation to operate as an LLP.

The circumstances of the major regulatory overhaul being introduced in the Bill, together with the need to ensure new business models for legal services are given a fair wind in terms of gaining a foothold in the market, justify the introduction of LLPs in this jurisdiction. This can be justified in the face of any claims by other professional partnerships that they cannot access LLP status. Also, in order to eliminate any issues relating to non-legal partners in multidisciplinary practices being able to assume limited liability through MDPs which they could not access within their own professions, it has been decided, for the time being and pending the research and public consultation to be conducted by the new authority regarding MDPs, not to include MDPs at this point in the LLP provisions.

I ask the House to support this group of amendments today. Amendment No. 1 is an amendment to section 1 of the Act which deals with the commencements of various sections and parts of the Act. It deletes the reference in section 87 in regard to multidisciplinary practices. As the House will know, it had originally been the intention to commence automatically the operation of multidisciplinary practices within a year of the consultation in this regard but it is now intended that the Minister for Justice and Equality will have the discretion to commence the operation of multidisciplinary practices at any time after the relevant consultation. This is in recognition of the fact that the consultation may bring to light some of the issues that will need to be catered for legislatively or organisationally before commencement. Therefore, an automatic commencement is not appropriate.

Amendment No. 2 sets out the date of coming into operation of the new legal partnerships model being introduced in the Bill. This is to be within six months of the completion of the relevant public consultation. This will allow for the new legal partnerships, which are barrister–barrister or barrister–solicitor partnerships, to be introduced within one year of the establishment of the new regulatory authority. I hope to see the first of these coming into existence before the end of 2016.

Amendment No. 87 inserts a definition of "limited liability partnership" into the existing section 84 as a reference point for the new Chapter 3, introducing LLPs, which is proposed to be inserted by amendment No. 196. It defines "limited liability partnership" as applicable only to a partnership of solicitors - for example, an existing solicitors' firm - or to the new legal partnerships, namely, the barrister–barrister or barrister–solicitor partnerships, being set up under the provisions of the new legislation.

Amendments Nos. 168 and 170 relate to sections 85 and 87 of the Bill as passed by the Dáil, which are very similar. They currently provide that no professional code that is a code of practice drawn up by a legal professional body such as the Law Society of Ireland or the Bar Council shall prevent a legal practitioner from providing legal services within a legal partnership or a multidisciplinary practice. Deputies will be aware that a legal partnership is a partnership between either solicitors and barristers or between barristers only. It is a new creature of this Bill that has been prohibited up to now under professional rules. Multidisciplinary practices are firms that will be able to provide both legal and other services together under one roof. These are currently prohibited under professional rules, and the Bill provides for their introduction, subject to the outcome of research and a formal public consultation process under Part 8.

I was advised by the Attorney General, whose advice I will paraphrase in general terms only, that the approach in the Bill, as published, which seeks to interfere directly with the professional codes of the legal professional bodies, is at high risk being vulnerable to legal challenge on the grounds of undue interference with the professional bodies’ constitutional rights of association. The original sections would, in effect, dictate to the legal professional bodies the parties they may include and exclude from their membership. It is this, in particular, that opens up the provisions to the possibility of successful legal challenge. In fact, it raises constitutional issues. This is the advice I was given and which I brought to the Cabinet. The Cabinet supported the approach I was taking in the Bill.

In the interest of having the new regulatory and complaints structures up and running early and of introducing consumer choice through getting new legal partnerships up and running now, I introduced these amendments in the Seanad. I have chosen to provide that, as a matter of law, barristers and solicitors may provide their services through one of the new business models. They will have a statutory right to do so.

Irrespective of the stance taken by any professional body, this right will exist as a matter of law.

The second part of the new section sets down a marker that such bodies may not in any way restrict their members from doing business with those who choose to operate through the new models. This is to ensure that progress will be as seamless as possible as far as consumers are concerned, whether they are dealing with legal practitioners who operate out of the Law Library through legal partnerships or multidisciplinary partnerships. It also makes clear that there can be no under-the-radar actions by the professional bodies which could have the effect of undermining the fair wind we are seeking to put behind the start-up of legal partnerships. It sets down a marker that the new authority will carefully monitor developments in the marketplace and will, if it finds any evidence that the start-up of new business models is being held back in any way, make recommendations to the Minister for further legislative change based on the evidence collected.

One of the amendments I introduced in the Seanad provides for a review of the legislation after 18 months. I also introduced amendments to make certain that the Consumer and Competition Authority is involved in this review and consumer interests will be taken into account. This will mean that, as a result of the innovations in the Bill, consumers will no longer be forced to deal with solicitors' firms, with only secondary, indirect access to Law Library barristers. Instead, competition in the market will be opened up, with consumers being able to immediately access mixed-discipline legal partnerships, limited liability partnerships, ordinary solicitors' firms and traditional Law Library barristers, both directly on non-contentious matters - an issue we discussed in the Seanad - and indirectly on contentious matters.

Another of the amendments provides that employers will be able to immediately hire barristers to work for them and represent in them court. The Bill also lays the groundwork for consumers to access legal and other services via multidisciplinary practices, as well as accessing barristers directly on contentious matters, subject to the relevant consultations. We must be conscious that the legal services regulatory authority is a new body. The previous Minister, Deputy Shatter, made certain decisions on which matters were to remain with the Law Society. If all matters were to be transferred to the new authority, it would be a much larger organisation with many more staff. What we have provided is a regulatory oversight mechanism, the legal services regulatory authority, which we are asking to do a large body of work. It must be feasible for the authority to do this work, which means we must provide it with a reasonable work programme that can be managed in the timeframes provided. A new body will not be able to deal with every single issue. In its first phase, which commences on 1 January 2016, the authority must get up and running and establish its own practices. Its board, chief executive officer and chairperson will have a significant task in establishing this new, independent regulatory authority.

I do not propose to discuss in detail all the amendments in the group. However, if Deputies have any questions concerning amendments, I will be pleased to provide more detail. Amendment No. 172 proposes to ensure that where a notice of commencement or cessation is made by a legal partnership to the legal services regulatory authority under the relevant provisions of Part 8, it may be subject to a fee by the authority. As Deputies are aware, the authority will be in a position to set fees.

Amendment No. 173 replaces the existing section 89 with regard to the requirement for a legal partnership to have indemnity insurance. The Bill makes amendments to the Solicitors Acts, which involved highly detailed work over a long period. We were not in a position to complete this work until the shape of the Bill, if one likes, had been settled. Detailed work was done on the amendments that make changes to the Solicitors Acts. These were necessary because we are establishing a new legal services regulatory authority. Deputies will note that the amendments do not introduce policy changes but reflect the need to represent the policy we are discussing in the Solicitors Acts. I have no doubt a consolidated solicitors Bill will be introduced in the near future.

We have defined the functions and obligations of the managing legal practitioner, MLP, in a multidisciplinary practice. Section 92(4) imposes an obligation on the managing legal practitioner to take all reasonable action to rectify a matter where he or she believes the practice is operating in breach of requirements under the legislation. The amendment seeks to impose a time limit on this obligation by requiring him or her to take rectification action within 14 days. The purpose of the change is to tighten up the oversight that the managing legal practitioner will have in practice and strengthen his or her hand in ensuring the rectification of any problem. We have therefore addressed the various issues that would affect multidisciplinary practices and provided detail on a range of obligations that will be in place, subject to the timeframe we have provided for their introduction.

Amendment No. 188 makes new provisions regarding the obligations of a managing legal practitioner. It sets out the stages for rectifying a particular problem and is straightforward. The amendments also oblige multidisciplinary practices to take out professional indemnity insurance. A significant number of sections address the issue of professional indemnity insurance and its import.

Amendment No. 197 inserts a new section that makes the core provision limiting the liability of partners in a limited liability partnership, LLP. It proposes to limit the personal liability of individual partners of a firm for its debts, obligations and liabilities. This is in line with precedent in several other comparable common law jurisdictions in which partnership law has been changed to allow for limited liability partnerships. The limited liability granted to a partner falls in a number of circumstances - namely, where there is fraud or dishonesty leading to a criminal conviction or where a finding of misconduct is made. The term "misconduct" is defined later in the Bill. The limitation of liability does not affect liability incurred for purposes not connected with the business and cannot be used, for example, for avoiding any tax liability. In addition, the limited liability is prospective only and does not cover any act or omission that occurred prior to the assumption of limited liability. Section 107 also provides that the original Partnership Act 1890 concept will apply to the new limited liability partnerships, maintaining them as partnerships and not any new type of quasi-corporate entity, for example.

Amendment No. 198 ensures the availability of the property of the partnership to meet obligations and liabilities of the partnership and protects creditors from any attempts to take money out of the business with the intention to defraud creditors - for example, in the event of a bankruptcy. Subsequent amendments make detailed provisions on authorisation and registration, appropriate fees and the various procedures that would operate in the event of the ending of a limited liability partnership.

The following amendments go into detail on the various provisions of authorisation and registration, actions subject to appropriate fees and the various procedures that would operate in the event of a limited liability partnership ending. Obviously, we also have to give the authority power to make regulations for oversight of new LLPs, including the regulation of the provision of information by them to creditors and clients of the authority.

There are a number of other details relating to the various obligations on an LLP that is registered with the authority. For example, amendment No. 265 deals with the point I made about barristers in employment. Section 151 provides, as a matter of law, that employee barristers will be able to act on behalf of their employer in court. Many people might have assumed that was the position at present, but it is not. The section also provides that the legal profession representative bodies will not be able to prevent their members from working with such employee barristers. The essence of the proposed new section has not changed. Instead, it has been reworked to ensure it is clear, as a matter of law, that barrister employees may provide legal services as practising barristers to their employers. The approach to amending the section is similar to that already set out in the amendments to sections 85 and 87. It creates a legal right for barristers to provide legal services through the new legal partnerships or multidisciplinary practices.

I hope I have given Deputies the type of detail they want on the amendments that come under the first grouping. If there are any questions on a particular amendment, I can address it.

11:10 am

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I would like to start off by saying I am delighted that the Bill is back in the Dáil from the Seanad. I want to say that a large number of amendments being incorporated in the Bill were envisaged in my time as Minister. I am delighted they are in it. A vast amount of work was undertaken on the Bill during my time and has been undertaken during the current Minister's time to get to the spot we are in now.

This Bill was published with enormous haste in early autumn 2011 because of the pressures the Government was under from the troika to publish legislation to address the need for reform in the area of legal services and to address issues and anti-competitive practices. It was always intended and understood that there would be a detailed engagement and consultative process and that the Bill would be developed. There was substantial development during my time and there has been further development during the time of the current Minister, Deputy Fitzgerald. I want to be absolutely clear that I welcome the very many amendments to the Bill which will ensure that it should work properly. The objectives set out for the legislation should be substantially fulfilled.

I am conscious that the amendments before the House deal with a broad range of parts of the Bill and I have no wish to speak at undue length. However, I believe it is important to note where we were in 2011. We were in a place where none of the reforms contained in this Bill were on the agenda. We were in a place where the two representative bodies of the legal profession were going to retain powers to deal with complaints and disciplinary matters. There was to be no legal services regulatory authority and no oversight of the nature provided here. There was to be no new legal costs adjudicatory process. Moreover, there were none of the other reforms contained in the Bill. The legislation then under consideration simply provided for the creation of a legal services ombudsman to deal with complaints that arose from clients of the legal profession if the professions were not properly dealing internally with issues.

It is noteworthy that during the course of Committee Stage, which I have detailed memory of, the Deputies opposite substantially tabled amendments so as to retain the 2011 status quo. That was the main objective. I believe this is an important reform in our legal system. To a great extent it is dragging the legal professions and our legal system out of the 19th century into the 21st century. It should be of great assistance and benefit to the individuals that we must focus on, in particular, the public and those who need legal services. However, I also believe it will ultimately prove to be to the benefit of both solicitors and barristers in ensuring greater transparency in the addressing of issues and by removing some of the blockages that exist in the provision of legal services by them.

I wish to focus in particular on one set of amendments before the House today. One of the objectives of the legislation was to end anti-competitive practices that had built up over the years in the manner in which our legal professions on this island developed. The anti-competitive practices applied to both wings of the profession, but to a greater extent to the Bar than solicitors. The objective of the legislation was not, as some within the legal profession perceived it, to do anyone down. The objective was to enact legislation that was in the public interest and which would ensure that qualified lawyers could provide legal services through myriad business models. That was the objective. The business models we have at present allow for solicitors to operate as sole traders or as partners, while barristers essentially operate as sole traders. However, what barristers do is a little more complicated, because if anyone wishes to be represented in the higher courts by a senior counsel, the senior counsel will always require a junior counsel. Frequently, a senior counsel will ask for a second senior counsel. It is not as if barristers do not act in co-operation with other members of the Bar. In fact, they do. Depending on the complexity of litigation or advice sought, it can be very much in the interests of a client that he is represented by more than one lawyer. Of course we know that in the advocacy area a more frequent approach is for a solicitor to deal with many of the behind the scenes and background work while one or more barristers will represent the client in court and engage in advocacy, cross examination, questioning of witnesses and the making of legal submissions.

At present solicitors can do everything barristers can do. They do all of the administrative and background work - the usual work that solicitors do. In addition, thanks to the former Deputy, Dessie O'Malley, who was Minister for Justice in 1971, solicitors can act as advocates in every branch of our courts. A solicitor who is a sole trader or a partner in a firm can be an advocate in the High Court, Supreme Court or the European Court of Justice if he chooses.

I have a distinct recollection in 1971 that the Bar library predicted that the heavens would fall in if solicitors were allowed to act as advocates in the higher courts. Over the years, some solicitors have done so - I happen to be one of those who did. However, many who choose to be solicitors do so because they do not want to act as advocates, or, if they do, then only in the lower courts.

Then in 1994 or 1995 there was a Courts Act in this Chamber brought in by the then Minister, Ms Nora Owen. I sought to amend that legislation to allow solicitors to be appointed as judges in the higher courts. The Bar Council predicted that if solicitors were appointed in the higher courts, the heavens would fall in and justice would collapse. Moreover, because those involved thought the Law Society had put me up to proposing that - it had not - they then fell out with the Law Society for two years and would not talk to them. That particular political dilemma was dealt with by a committee being formed. Four years later, the committee recommended that solicitors should be appointed to the higher courts. Since then, legislation was enacted and the heavens have not fallen in.

In 1989, the Judicial Separation and Family Law Reform Act was passed. It allowed or permitted barristers not to wear wigs in family cases. Some members of the Bar library thought the heavens would fall in if they were not wearing wigs. Surprisingly, that worked out okay. Then we had legislation which gave it as an option to all members of the Bar, regardless of what cases they were dealing with, not to wear wigs. Happily, by then the move created less excitement than previous reforms.

I appreciate the position the Minister finds herself in. Again, I have no wish to be misunderstood. Outside this House people are making a federal case of this. Fully 85% of the reforms I set out to achieve are going to be achieved in this Bill.

My only objective in seeking to achieve them as Minister was to benefit the public interest and consumers and provide better consumer protection, but also to provide other job opportunities for members of the legal profession who are well qualified to provide assistance to the general public when they require it. I am delighted 85% of what I set out to do is being achieved. My concern is that we are in trouble with the alternative business models for delivering legal services. I followed closely the amendments made in the Seanad. The Minister is correct in saying that the Bill still retains a possibility of legal partnerships. Legal partnerships between solicitors have been possible for donkeys' years; that is not the issue. Under the Bill, a legal partnership is a partnership between barristers and solicitors or between barristers. In England there is a chambers operation, whereby barristers operate out of chambers. In other parts of the world there is no particular difficulty with lawyers acting as partners. The Bill envisages the possibility of partnerships between solicitors and barristers. Why would that benefit a client? It would mean that a client who seeks legal assistance may be able to access a barrister more quickly. There would be less duplication of work. He or she would deal with one entity, a particular partnership firm that can deal with all aspects of his or her legal case. It will be speedier. The client will not be waiting, having met with his or her solicitor, for the solicitor to send written instructions to the Bar library and then waiting for weeks for some opinion to come back before he or she can go on to have a meeting with a barrister in which everything that was told to the solicitor must be repeated. It will avoid duplication. That type of legal partnership should reduce legal costs for consumers as well as allowing for a more efficient means of providing legal services.

I refer to barrister partnerships. At the moment, barristers substantially operate out of the Law Library. As the Minister rightly said, about 100 barristers are not members of the Bar. Some of them operate out of offices around the country. The restrictive practices of the Bar mean that barristers who are not members of the Bar are not even allowed to advertise the fact that they are operating out of offices somewhere outside Dublin. They cannot pool their income. They can certainly share the payment of rent, but they cannot actually operate as partners at the current time because they would be in trouble with the Bar Council. The legislation sought to ensure that there would be no barrier to the creation of legal partnerships between barristers or between barristers and solicitors. This would offer alternative business models through which legal services could be delivered. In doing so, the Bill contained the provision the Minister mentioned which, to put it in simple terms, would effectively outlaw any code of practice within either profession that would prevent the creation of these new legal partnerships and their operation. The same provisions are relevant to multidisciplinary practices.

Before I get on to multidisciplinary practices, I welcome the fact that the Minister, having amended the Bill in the Seanad, is now amending it again. It is quite clear in the Bill that there is a reasonable prospect, once it is enacted, of legal partnerships between barristers or between barristers and solicitors coming into operation within 12 months. That is only a possibility. It may be that some barristers who are not members of the Bar library may enter into those arrangements, but the overwhelming majority of barristers are members of the Bar library, and the code of practice that is in place prevents them from entering into these sorts of partnership. The original legislation sought to outlaw a code of practice which inhibited the creation of these legal partnerships. This is a genuine and real problem. The idea was to ensure that the approach of the Bar or the solicitors' profession did not act as a barrier to these new business models.

The Minister has received certain advices, on which I am going to comment in the moment, but they are of equal relevance to multidisciplinary practices. In the area of multidisciplinary practices, I am particularly disappointed that the provisions contained in the Bill that sought to guarantee that within a specified time - I recollect it was approximately 12 months after enactment - multidisciplinary practices would become a possibility have been removed. The 12-month period was intended to allow for the making of relevant codes of practice and for addressing any issues that arise uniquely in regard to multidisciplinary practices. The reason for the provision of such a period was that in the Solicitors (Amendment) Act 1994 there was a section that envisaged the creation of multidisciplinary practices, which was to be brought into force by way of a ministerial order, but it never was.

Multidisciplinary practices exist in some other jurisdictions. They are not that complex an animal. A group of lawyers who want to practice in the business area can operate with solicitors alone or with solicitors and barristers together, and can include within their business model, for example, an accountant or somebody who is experienced in forensic accountancy. This is not a thing of great complexity and it genuinely should not be. It is being made to look more complex than it is.

In so far as people are shouting that this could interfere with the independence of the legal profession, of course it does not, because under this Bill lawyers have an express obligation, from day one, to act independently and properly advise their clients. Of course in major cases of a commercial nature or of a family law nature in our courts, lawyers have absolutely no difficulty in the world in working with accountants, forensic accountants and others. Indeed, the model in particular firms often means that they regularly consult with the same firm of accountants. A particular accountant can almost become an unofficial leg of a particular firm.

There is no logical reason for not having multidisciplinary practices, which provide a sort of one-stop shop for the benefit of consumers and for the provision of a comprehensive service. It is not just relevant in the business area; it would also be relevant in an area that I am very familiar with - that is, family law. A family law practice might have within it an experienced mediator and a family counsellor, and could provide assistance to a client who is very stressed in the course of dealing with a family difficulty. These are not big, threatening legal entities. This is about allowing people to provide legal services through a different model, to the benefit of whom? The public and the consumer. That is what all of this is about.

I do regret that the timeframe stated in the Bill for the existence of multidisciplinary practices has been removed. I do not think, frankly, it would have mattered if the 12-month period became 18 months or even, if the Minister felt it required more time, two years. There needs to be an inevitability that it will happen, because this model is working elsewhere. Contrary to the perception that has been given, there was an amount of research and consultation that I personally engaged in, as well as some of my officials, in the context of what we originally proposed.

In regard to multidisciplinary practices, the same provision is in the Bill as originally published - that is, it prohibited any body such as the Law Society or the Bar Council from doing anything that would act as a barrier to individuals' participation in such a practice. In so far as a code of conduct outlawed, in some shape or form, a barrister from participating in a multidisciplinary practice, that would cease to have any effect.

What is the effect of these codes of practice? The effect of the code of practice in the context of the Bar is that a barrister who is a member of the Bar library can be excluded from it or effectively excommunicated from the Bar library. The problem with the Bill is that we are going to have the possibility of legal partnerships, but only a small minority of barristers will be free to enter into them. Every other member of the Bar who is also a member of the Bar library will be under the threat of excommunication from the Bar library if they dare to participate in a legal partnership.

We have a possibility that some Minister, at some stage in the future, might bring into force multidisciplinary practices and allow for them to occur. Again, the same pertains. Any member of the Bar library who wants to enter into a multidisciplinary practice is at risk of being excluded from the Bar library under its code of practice. I think this is a huge problem. It is allowing restrictive practices that inhibit people from earning a livelihood and providing a service through a different business model.

I want to ask the Minister a specific question in regard to barrister employees. There are a large number of barristers, particularly young barristers, who can barely earn a crust. They are well qualified and very bright. Some of them do not get work because they do not have relations in the legal profession. Much of the work they get is dependent on the goodwill of their seniors in the Bar library or whomever they can connect with.

I am pleased the Minister has retained in the Bill a provision that allows barristers who are employed in firms to represent their clients in court, but it may well be that the barrister who wants to do this is employed in a firm involved in a very complex legal action, and that barrister may have a great deal of expertise in that area, but what will be the position if that barrister wants to appear in court and is of the view that this is a particularly complex case that requires the assistance of some other member of the Bar library? The barrister might want to bring in a senior counsel who has some particular expertise. Will the Bar code of practice prevent a situation being created in which the barrister employee acts jointly as advocate with a barrister from the Bar library?

I appreciate in relation to legal partnerships and multidisciplinary practices that there is a provision in the legislation that says, and I am paraphrasing, that codes of practice cannot prevent - I think this is the intention - a member of the Bar from taking instructions to represent someone who is initially represented by a legal partnership or a multidisciplinary practice. I am not clear, and perhaps the Minister will clarify this amidst all the amendments we have, what the position will be should a barrister employee who wants to act as advocate want the assistance of another barrister from the Bar library in so acting?

Among the Bar's restrictive practices that are going to be allowed to continue for its members is that while we could have as many barristers acting as advocates on behalf of a client in a court as was deemed necessary, there was a Bar perspective that disapproved of what is known as "mixed doubles", which is a solicitor and barrister jointly acting as an advocate in a court. At a time when there is a great deal of legal expertise in niche areas, there is often a discrete number of lawyers with expertise in a particular area and there may well be a case in which a solicitor and barrister should jointly act as advocates. They may not want to form partnerships. It might be a once off. It seemed to me that the legislation as originally drafted prevented difficulties being created around that. I do not know where that stands at the moment.

I have an abiding memory from a number of years ago. There is this perspective on the part of some members of the Law Library that I have some hostility towards them, which is completely insane because my own law firm for donkey's years has worked with, and instructed, a multitude of barristers and I have worked with many barristers. We have some fantastic lawyers in the Bar library who do a phenomenal job. I know they get criticised for various reasons, but I am not one of those who has a negative view. We have extraordinarily good solicitors and extraordinarily good barristers. We are very lucky as a country to have a group of very good and talented lawyers, but some of the rules under which they operate are antiquated and peculiar, and I have a distinct recollection of being in a circumstance in a very complex case in which I was the solicitor and we brought in counsel. There was an area relevant to the case in which I had greater expertise than counsel and because it was not the done thing that counsel would make submissions jointly with a solicitor, we contrived a circumstance many years ago. The very erudite and well respected counsel made submissions to the court on areas of the case in which he had the expertise, knowing the case would follow into the following day. The next day he advised the judge he was not available and I had to complete submissions in the area in which I had expertise. He could not get into trouble with the Bar Council for just sitting down in court while a mere solicitor made submissions. This is crazy stuff. Are we still going to be in this space after this reform has been enacted?

I want to come back briefly to a couple of additional things I want to say to the Minister. It is a mistake to have removed the provision in the legislation which allows the professional bodies to maintain a code of practice which especially will enable the Bar Council to penalise any member who dares participate in a legal partnership or who dares participate in a multidisciplinary practice. The legal advice is based on the Article of the Constitution which deals with freedom of association. The Article is very clear on the right of citizens to form associations and unions. It recognises the right of citizens to form associations and unions so I presume the Bar Council is saying it has the right of association, which of course it has and why should it not?

This right, however, is limited. It is delimited in the following way: "laws, however, may be enacted for the regulation and control in the public interest of the exercise of the foregoing right". Article 40.6.2° of the Constitution goes on to say, "laws regulating the manner in which the right of forming associations and unions and the right of free assembly may be exercised shall contain no political, religious or class discrimination". There is no political, religious or class discrimination in simply saying the codes of practice should not act as a barrier to individuals providing legal services through different legal models. These legal models exist in other countries. There are advocates, people who are solely advocates in courts, in a myriad of other countries where we do not have the division of the profession between solicitors and barristers, who work in partnerships, who do so in the interests of their clients, who act independently and who properly represent their clients.

The public interest is such in the area of removing anti-competitive practices that there may well be a case to be made under this Article, but there is no certainty of any description that case would succeed. Indeed, if the legislation were to be challenged in the context of this issue, well so be it, it would be challenging two or three particular sections in the Act. It would not be to the detriment of the entirety of the legislation. It has to be remembered one of the undeclared rights in the Constitution, articulated by the courts, is the right to earn a livelihood. I believe members of the legal profession, be they solicitors or barristers, have a right to earn a livelihood through alternative business models to provide legal services to consumers in circumstances that benefit consumers, provide greater competition and reduce legal costs. My concern is that this change is unwarranted.

I have been reading in the media that it is not simply the advice of the Attorney General but that a threat was uttered by at least one of the representative bodies that if the legislation went through in the form it was in, which would set aside its code of practice, constitutional proceedings would be brought. During my time as Minister, a range of were threats uttered with regard to the processing of all this legislation. During my time as Minister, threats of other natures were uttered with regard to issues we were dealing with that affected either the Judiciary or the legal profession, because people were unhappy with change and reform. The Minister should tell the House which of the representative bodies threatened court proceedings. I do not think the threat of court proceedings should inhibit this reform. I think it is unfortunate we are in that space.

I have a simple view. When there is a conflict between public interest and vested interest, I favour the public interest. When there is a conflict between the rights of consumers and anti-competitive practices, I favour the rights of consumers. When there is a conflict between trying to contain legal costs or maintaining systems which ensure legal costs are maximised, I favour containing legal costs. There are judgments to be made in these areas when vested interest bodies flex their muscles, and I believe, unfortunately, we will have to return to this issue.

It is quite possible there might be some revolution within the professional bodies, particularly within the Bar where members demand the code of practice be changed, but the difficulty with that, especially for junior counsel, is that I am very conscious that members of the Bar library, particularly junior counsel, are very anxious not to upset their seniors. I received a myriad of communications from individuals who are members of the Bar, who are junior counsel, who were urging that this particular reform be implemented unchanged. They saw it as a possibility of ensuring not only that they could better provide legal services but also that some of them who are on the breadline would earn a reasonable living in doing so. It is very regrettable that this issue is being, to a degree, sidelined. I appreciate the position the Minister is in. She has received advice from the Attorney General. I do not want to be unsympathetic of that. I understand that.

However, the advice, as I understand it, is that these provisions may be challenged. To be clear, the advice is not that such a challenge will be successful but simply that there will be a challenge. When we began drawing up this legislation, we were told that if we established a legal services regulatory authority, it would be challenged. We were told there was no question of independent disciplinary tribunals, that such would impact on the independence of the legal profession and the latter should be self-regulating. There was an insinuation that the whole thing would be challenged. Most of the challenges have now fallen away.

There was a constructive and helpful engagement with both of the representative bodies in the development of this Bill during my time. I am sure that has continued under the Minister, Deputy Fitzgerald. However, one gets to a point where a choice must be made between the public interest and the vested interest in particular areas and where the consultative process will not take one any further. The problem with this legislation is that the general public does not necessarily see the detail of it and the benefits for citizens in some of the changes we are trying to introduce. It is the vested interests who most vigorously focus on the changes being made.

I very much welcome the progress of this legislation through the Oireachtas and look forward to its enactment before the end of the year. I hope much of what is contained in it comes into force rapidly. However, in the context of providing for the delivery of legal services through alternative business models, leaving codes of practice in place that inhibit practising lawyers from engaging in those legal models will leave reform stillborn in the area of multidisciplinary practices. In the area of legal partnerships, the only way we will see any substantial difference in the provision of legal services is if there is a rebellion within the Bar whereby its members insist their code of practice is changed or if we come back into this House with legislation at a later date to restore the provision which inhibits any representative body from engaging in efforts to prevent an individual from participating. Unfortunately, the Minister is incorrect when she says no under-the-radar action by professional bodies to prevent legal partnerships or multidisciplinary practices will be allowed. The fact is the inhibiting factors are not under the radar but clearly visible. It is the code of practice that will inhibit many barristers from participating in these models because they will be uncertain of the impact on their access to clients and on their relationships with colleagues.

The final problem is that there is, in fact, an under-the-radar barrier built into the legislation itself in the context of the make-up of the legal services regulatory authority, the disciplinary bodies and, indeed, the body that is being put in place to facilitate in the future, in a different way, the appointment of senior counsel, eligibility for which is being extended from barristers alone to solicitors and barristers. Some of the individuals on those bodies are lay people and represent a range of other bodies. When it comes to the legal profession, it is only the Law Society and the Bar Council that will be represented. King's Inns will have a representative on one of the bodies. The barrister who leaves the Bar library to enter into a new legal partnership will find he or she is not represented on the legal services regulatory authority, as I understand it. However, if there are disciplinary or complaints issues relating to that barrister, they will be dealt with by a mixture of lay people and representatives of a professional body which disapproves of what the barrister is doing. In the case of judicial appointments, the body that makes recommendations to Ministers is substantially composed of judges and representatives of the Bar Council and the Law Society, as well as three lay people. If a person who left the Bar library to participate in a legal partnership applies to be on the list of recommended individuals to be made a judge, will that person be ruled out simply because he or she has defied a code of practice? These are serious, under-the-radar factors that will inhibit well-qualified lawyers from participating in the new legal models. It is in the public interest that they participate. I understand from reports I have been reading that the Competition and Consumer Protection Commission is critical of these particular changes, which I welcome.

I very much welcome the fact that 85% of what I set out to achieve in this legislation will be achieved. I take this opportunity to thank the officials who worked with me when I was Minister, and who, no doubt, are working with the Minister, Deputy Fitzgerald, to fine tune the legislation. I agree with the Minister on the issue of limited liability practices. That was a piece of work I asked my officials to engage in because it is very important not just to lawyers, but in the context of enabling our major legal practices to compete with legal firms abroad. However, it is unfortunate that the provisions in the Bill that envisage either solicitors, solicitor partnerships or barrister partnerships being able to operate on a public limited company or limited liability company basis will exclude multidisciplinary practices. It was my intention that they be included. Moreover, I have no optimism that we will see a provision to allow for multidisciplinary practices brought into force in the near future. Provisions that are beneficial and necessary to provide for incorporated legal practices should have been extended to include multidisciplinary practices. Equally, that could have been subject to being brought into force by ministerial order.

11:40 am

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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I am pleased to have another opportunity, by way of these amendments from the Seanad, to outline my perspective on the progress of this Bill since its introduction. I read with some intrigue the news reports in recent weeks, most of which entirely miss the point of what the legislation is about. Sometimes in these Houses we operate in something of a bubble and get caught up in policy and our own circular conversations. For citizens, the main issue they have with legal services is cost. People who find themselves in family law proceedings, civil law proceedings or whatever it may be, often through no fault of their own, are obliged to avail of legal services and then face a huge bill at the end of it. That adds to the stress they are already under. From the outset, this Bill has not done anywhere near enough to address that issue.

We have been a long time waiting for progress on the proposed mediation Bill. The Oireachtas justice committee considered a proposed scheme for that Bill several years ago, before my time as justice spokesperson for Sinn Féin. That legislation is vital and I have repeatedly asked when it will be brought forward. We need to introduce a culture in this State whereby citizens, rather than going down the road of adversarial confrontations in court rooms, go into mediation. The significant majority of family law and civil law matters could be resolved through the efforts of skilled mediators who would be accountable to the Mediators Institute of Ireland or an independent regulator. Proposals drawn up by way of this mediation process would then be presented to a judge. I am sure the Judiciary would be delighted to see such a system being introduced. Unfortunately, however, the mediation Bill has gone nowhere for a long time. It would have done more than the Bill before us today to address the issues that most affect citizens as they interact with legal services. Yet there has been hardly a mention of the mediation Bill in the media.

Journalists in this State need to have a look at themselves, because the narrative has been that the previous Minister, Deputy Alan Shatter, introduced this reforming piece of legislation and then, due to the lobbying efforts of the legal representative organisations, the current Minister caved in. It might surprise those watching today that I do not accept that narrative. I have followed this process for a number of years. The previous Minister would acknowledge, as he has today, that the initial legislation was rushed, under the demand of the troika. It was considerably flawed.

Having looked at the submissions made to the justice committee and from the interactions we, as Opposition spokespersons, had with the legal representative groups, their analysis, in the main, was sound and reasoned. They were not objecting to independent regulation of the legal fraternity. That is a very important point: they were not objecting to independent regulation. They felt the Law Society and the Bar Council had complaint handling procedures that were independent, but they accepted that there was an understandable perception among the public that they were not truly independent. The key benefit of this legislation is the introduction of the legal services regulatory authority, which is welcomed by everybody.

I just do not understand the narrative that was presented in the media. Far be it from me to defend the current Minister for Justice and Equality, but I do not accept the narrative. She listened to reasoned arguments and addressed them, and that is what we want Government to do. The Opposition's job is to hold Government to account. When it comes to legislation, our job is to engage with the relevant stakeholders. For example, we have serious criticisms of the International Protection Bill. My party has met with all the NGOs working on issues relating to refugees and asylum-seekers, as, I am sure, Fianna Fáil and others have. We have listened to their concerns and submitted amendments. That is what parties do in a democracy if they agree with the concerns raised. They try to hold Government to account and to strengthen the legislation and change it. That is what is done in the normal run of things. What has happened here is that we in the Opposition have listened to reasoned arguments from key stakeholders, people who have been dealing with complaints from citizens around legal services for many years and who made solid recommendations for amendments, which we submitted. I am glad to see that the previous Minister, Deputy Alan Shatter, and the current Minister, Deputy Frances Fitzgerald, and her Department officials, have listened to those concerns. They have agreed that many of these concerns are sensible and that there is a need for change, and they have made this Bill better. I do not have any major criticism of the change in direction from the original Bill to what it is now.

I have concerns about multidisciplinary practices. They have been presented as a panacea, as a huge cost-saving intervention, and as radical reform of the way we do law in this State. The concern internationally has been that these multidisciplinary practices sucked the talents that were there, took them into the one building, where there are solicitors, barristers and accountants, hired by the wealthiest companies and corporations and retained by them, and that we would not have a level playing pitch. I am thinking here in an Irish context of citizens in places like Donegal, Limerick and Cork, rural areas where people go to their local solicitor to hire the services of a learned counsel who is specialised in a given area and they might find the best and brightest are under one building, hired by a corporation the client might have to take on. We did not see the benefit of that. The free legal advice centres also had serious criticism of this proposal. I do not think anybody could accuse them of being a vested interest, protecting the old ways. There were, therefore, considerable concerns about multidisciplinary practices, and we make no apologies for raising them again and again.

There is need for reform within the legal fraternity that is not dealt with in this Bill. People from less privileged backgrounds will struggle to make their way through as barristers. The whole devilling system needs to change. We need to have access for people from working class and other communities in this State to work their way through. This a really important, fundamental issue because our Judiciary is populated from those ranks. If we have a Judiciary that is from the wealthier, more privileged parts of our society, which may hold views that are more conservative than the average citizen, or may have an experience of life that does not reflect the experiences of most citizens, when these people are tasked with interpreting our Constitution in the Supreme Court at the highest level of the Judiciary, that is worrying. We need a Supreme Court that is populated not just by people learned in the law, but people who have experience, who understand the experiences of citizens, who understand the need for change, and who have a real-life approach to the people who find themselves in front of them in courtrooms across the land. These are real issues and there is much more work to be done than is addressed in this Bill.

I will conclude by reaffirming the following points. The key issue for most citizens who find themselves having to engage with legal services is cost. They find themselves with huge bills that add to the distress they already face. This Bill does not go far enough to address that key issue. That should have been the key challenge of the Bill. The independent legal regulatory authority is welcomed universally. It is important to reassure citizens who have had a bad experience with somebody in the legal fraternity that they have an independent avenue to go to that is beyond reproach.

It is too late for this Government, but whoever is in place in the next Government needs to take the mediation Bill down off the shelf, dust it off, engage with the stakeholders, and task the incoming Oireachtas justice committee with holding hearings, because that Bill, which will probably need more amendments and strengthening, has the potential to make a real impact for citizens and to change the culture. People instinctively go to a solicitor - it is their first port of call and they do not have the culture of mediation in their mind - but imagine a situation where the solicitor is obliged to advise them that they should avail of mediation and a judge would be able to say "Folks, why are you before me? These issues can be resolved by mediation. Go away and try to resolve them, then come back." If we get to that point, that will make the biggest contribution to a more thoughtful and reasoned approach to resolving disputes in this State and it would be much less costly. That would be in the best interest of citizens.

I have read all of the media analysis, throughout various publications, and they have missed the point. The point is not this idea of a reforming Minister, Deputy Alan Shatter, being undermined by a Minister caving in, which is not correct. The point is that this Bill has not achieved for citizens what it could have achieved. There is hardly any reference to the mediation Bill. Those journalists have an important role in our democracy, in looking at legislation, observing matters in this Oireachtas and looking at who lobbies for changes in legislation. I ask them to go back and look at what has happened with this legislation - to really look at it, not just have an almost lazy analysis. They should go back and look at the facts of what has happened throughout this process. They should look at the recommendations, at what we have ended up with, and the points of view of both sides. On multidisciplinary practices, they should listen to the point of view of the main advocate, the former Minister, Deputy Shatter, and others, and listen to the view of the free legal advice centres, of the Opposition and of critics of that proposal internationally. They should must listen to all points of view before they start to write their articles. I was taken aback by the universal analysis, across the media, by journalists I respect.

Talented, intelligent and capable journalists got this wrong. They missed the key point for the people they are speaking to out there, which is around costs, that this Bill missed. Hopefully, we can reflect on this matter. We are coming to the conclusion of this Bill. It is welcome that we finally got it over the line, but the next Government needs to bring in real reform.

Progress reported; Committee to sit again.