Jim Walsh (Fianna Fail)

I welcome the Minister of State to respond to this Adjournment matter which concerns the report of the Competition Authority on the legal fees charged by barristers and solicitors. In the past 13 years the tribunals have placed a strong spotlight on legal costs in terms of the imposition on the taxpayer. Many of those who have functioned in the tribunals as senior and junior counsel have become multimillionaires. This is a matter about which I have spoken in the past. In many instances, the State sets the headline rates because it is a very large user of legal services. I am aware that we are dealing with a powerful interest group and, therefore, it is not easy to secure the necessary changes.

In general, the fees charged are not justified. They are predatory and, in most cases, exorbitant. They affect competitiveness and are a huge imposition on the private and productive sector of the economy. They are a barrier in accessing the courts. Every person in a republic should have equal access to the courts but in civil cases only the wealthy can access them.

There is a need for a sense of fairness in dealing with the issue. The State is paying high legal costs at a time when there have been pay cuts and reductions in social welfare payments and there are higher taxes. Some of the money collected from hard-pressed taxpayers is used to pay fees of €2,500 and more to those who represent the State in tribunals or the courts. It is an abuse of privilege. The principle of supply and demand should have an impact, but it does not.

While these are my thoughts, I wish to quote from the report of the Competition Authority of December 2006. It reads:

The current regulatory framework for the legal profession in Ireland raises the potential for conflict of interest between the commercial interests of lawyers and the interests of consumers of legal services. In their role as regulators of the legal profession the Bar Council and Law Society must ensure that the legal profession operates to the benefit of consumers. These two roles can come into conflict. Housing them in the same organisation lacks transparency. Entry into the legal profession in Ireland is controlled by those already in the profession and the Competition Authority strongly recommends the removal of the Law Society and King's Inns' role in setting standards for the provision of legal education. This role should instead be given to the legal services commission.

It is stated on page 27 of the report that average earnings for senior counsel were €330,000 and that some 76% earned over €100,000. When one speaks to barristers in the Four Courts, one finds that while many of them have very little work to do, average pay is high. It is difficult not to come to the conclusion that there is a strong cartel in operation.

I was critical of the Competition Authority for being slow and taking a number of years to produce the report. Recommendation No. 1 was, "Establish an independent legal services commission to oversee the regulation of legal services", which was to be actioned by June 2008. Recommendation No. 2 was, "Have an independent body to set standards for solicitor training", which was also to be actioned by June 2008. Recommendation No. 3 was, "An independent body should set standards for barrister training and approve those institutions", which again was to be implemented by June 2008. Recommendation No. 5 was: "The current system of reciprocity and recognition of legal training of non-EEA lawyers should be replaced by mirroring the existing provisions for EEA lawyers".

Recommendation No. 6 was: "Remove unnecessary barriers to switching between the branches of solicitor and barrister". Recommendation No. 8 was, "Allow unlimited direct access to barristers' legal advice", which was to be implemented by December 2007.

Recommendation No. 13 was: "Allow employed barristers represent their employers in court". Again, this was to be implemented by December 2007. Recommendation No. 15 was: "Remove restrictions on solicitors advocating in court". This, too, was to have been implemented by December 2007. While there was some progress made, I have been told by some solicitors that they are reluctant to take on the role of being the advocate, particularly in the superior courts, because of a danger of bias to their client, where the arguments of barristers on the other side might receive preference from the bench.

Recommendation No. 22 was: "Advise barristers that the practice whereby junior counsel charge fees at two-thirds of senior counsel's fee is anti-competitive". This was to be implemented by March 2007 and was, apparently, but the practice continues and the State still pays two thirds of senior counsel's fee to junior counsel, despite the recommendation. Recommendation No. 26 was: "Legal costs should be assessed on the basis of work done." This was to be introduced immediately. Recommendation No. 27 was: "Cease the practice of taxing junior counsel fees at two-thirds of the senior counsel." This was to be implemented immediately. Recommendation No. 29 was: "Examine the possibility of introducing competitive tendering for the provision of legal services." This was to have happened by December 2008.

Many good people employed within the legal profession render a great service to the State and many of them also do significant pro bono work. However, we must accept that in practice, there is a total lack of competition within the system. It is one of the few areas that has been left untouched. This runs counter to the competitiveness programme we now need to implement across all sectors if the economy is to be restored to good health. Given the report was produced in December 2007 and we have failed to implement it, we now have changes being imposed on us by the EU-IMF deal. I urge that we accelerate and embrace all of the recommendations of the report. I am aware the Minister of State is new to this issue, but I look forward to hearing what progress is being made and how soon we can expect real and effective competition in this important profession that serves our community. This is a fundamental issue for State expenditure also.