Sean Barrett (Independent) | Oireachtas source

I move amendment No. 41:

In page 37, to delete lines 14 to 18 and substitute the following:“(5) Reports on the creation of a new profession of conveyancer including the conduct of conveyancing by other professions, the extent of monopolistic provision of legal services in the State and the right of direct access to a barrister other than through a barrister shall be provided to the Minister within 1 year of the establishment day.”.

This amendment refers to the reports to be made to the Minister and asks that a report be made available on conveyancing. This is a growing problem. House prices in Ireland used to be two and half times average income levels; they then went to 12 times average income levels and now they are somewhere around five times average income levels. Nobody has been as successful at tying his or her income and the charges for the services he or she provides than a solicitor operating as part of the conveyancing monopoly. We are trying to deal with the consequences of this. The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, was in the House earlier trying to unravel some of the consequences. Why do we not know what a competitive conveyancing market should look like? Why does the cost of the transaction have to be linked with house price in a country in which the rate of inflation in house prices was the worst in any country in the OECD and in which the banking system was eventually brought down, resulting in the State having to avail of an IMF bailout? Why can the conveyancing service not be priced separately? Judging from her statements on earlier Stages of the Bill, I believe the Minister would like this to happen. I said to her on Committee Stage that I had quotes for conveyancing from a company which dealt with emigrants returning to Ireland, a cause dear to her heart and absolutely that of the Minister for Finance, Deputy Michael Noonan. The websites which provide information on returning to Ireland state returnees should be prepared to pay as much as 1.5% of the purchase price of a house or, for example, €4,500 on a house valued at €300,000 which is actually less than the average price of a house in Dublin. The websites state the comparable fee in the United Kingdom could be as low as £200 or €285. The conveyancing monopoly has been criticised, especially by the Competition Authority which has conservatively estimated a potential saving of 25%. That was written before the burst of inflation in house prices which must have seriously enriched conveyancers who charge a fee based on price of a house.So many people have drawn attention to that, that we must get all aspects of house prices back to some reasonable multiple of incomes because it causes homelessness among other problems. I do not wish to exaggerate the conveyancing part of it but a service that is available for the equivalent of €250 in England can cost €3,500 in this country. Research for the prices commission showed that the conveyancing super normal profits cross-subsidised pretty well everything else that solicitors did, including, as somebody rather wittily pointed out, court work. The point was that the person who buys the house is overcharged the conveyancing fee so that the solicitor involved can subsequently give subsidised legal aid to a person who burgles the same house. It does not make any sense to overcharge people so heavily, as we have been doing through the conveyancing monopoly, on the purchase of a house.

Economists do not like it because this monopoly has gone on for so long. Most house purchasers do not like it much either. We want that to be reported on and not to have to wait for four years. We want reports on the conveyancing profession. I know that solicitors in this country say they do not charge 1.5% any more. The conveyancers did not get much of a market share in the UK but they certainly reduced prices in the UK. The website advising Irish people returning from the UK says they can expect to pay a lot more for their conveyancing because it is related to the house price, in a country where house prices went out of control and one cannot get the flat fee, which the website claims to be £200. I have seen adverts for conveyancing in the Yellow Pagesand other places in the United Kingdom. One would expect that having people other than solicitors carrying out this function would lead to a reduction in costs. We need an up-to-date report on the issue because I have never seen any evidence to support the claim that having a solicitor monopoly on conveyancing keeps the price down. It is much more likely to keep it up and the evidence comparing jurisdictions where one has got other people doing it is very definitely in favour of competition.