Colm Burke (Fine Gael)
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I thank the Minister of State for taking this matter relating to the Department of Justice and Equality and the Courts Service. The High Court has two Taxing Masters and I do not want this matter to be viewed as a criticism of them because they are doing a good job, but there are long delays because of the volume of work they face.

I refer to the need to appoint a third Taxing Master. I make this proposal on the basis that such an appointment would be cost neutral. If one sends a bill for costs to be taxed by the Taxing Master, stamp duty must be paid before one receives a certificate of taxation.

Therefore, stamp duty paid will more than adequately pay for the cost of a taxing master.

Let me refer to a case that was settled in September 2012 and that was submitted for taxation of costs. Obviously, there were ongoing negotiations beforehand. The client said she sent in for taxation of costs in February. The earliest date for taxation given is 12 July. Therefore, there is a gap of five or six months. The problem is that if there are any applications for adjournment, the case may well not be dealt with until October or November. There is a major problem, but not so much with the bigger legal firms. The bigger legal firms in Dublin are doing fine because they have all the additional work. I was surprised to discover recently that work that was sent to a Cork legal firm heretofore is now all sent to one in Dublin. No one has explained this to me.

The issue for the smaller legal practice is cashflow. The problem that has now arisen is that insurance companies are aware of the delays in processing the taxation of costs. They have decided to play hardball as regards what they are offering in settlement, not so much in the settlement of cases but in the subsequent settlement of costs. Smaller practices are suffering badly because if one wants to take a case in the High Court in respect of personal injuries, one must pay for the medical reports and many other reports up front. Last week, I spoke to an office worker who told me he or she had to pay £2,500 for a medical report from the United Kingdom. Such reports may take anything up to four years to recover. This results in a cashflow problem. Unless the issue is resolved, practices will be forced to close and jobs will be lost. This is unnecessary. This issue can be dealt with easily without any additional cost to the State. That is why I am raising this matter tonight and seeking the appointment of a third taxing master.

Kathleen Lynch (Cork North Central, Labour)
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I am responding on behalf of the Minister for Justice and Equality. I thank the Senator for raising the matter. The Minister appreciates that people, especially legal practitioners, are interested in the matter of taxation of costs and the efficiency of the system of taxation. As the Senator may be aware, taxing masters are independent officeholders attached to the High Court. The positions of the taxing masters and their offices are currently governed by the Court Officers Act 1926 and the Courts (Supplemental Provisions) Act 1961. As the Senator is aware, there are two taxing masters who perform functions of a judicial nature in respect of legal costs with the aim of establishing a fair relationship between services rendered and the cost of those services. The Courts Service has informed the Minister that the current waiting time for taxation of a bill is ten weeks, down from 12 weeks earlier this year. The Minister has also been informed that a number of measures have been introduced in the taxing master's office to tackle backlogs. These include improved scheduling of cases. Practitioners have also been informed that all requisite documentation is to be lodged at the commencement of the taxation process. It has been necessary to inform parties that taxation cannot be completed due to non-lodgment of the requisite documentation or where proofs are not in order.

The Minister has been informed that the senior taxing master has also already indicated to practitioners that he will take any application for urgent taxation and regularly does so. He has also indicated that complaints regarding delays should be brought to his direct attention. The Senator will appreciate that the need to ensure that persons appointed as taxing master have the requisite experience in practice can, on occasion, give rise to some circumstances in which recusal from a case may be appropriate. However, the Minister has been informed that this issue is being managed between the two taxing masters. With regard to the modernisation of the current legal-costs regime and the framework for the taxation or determination of disputed legal costs, the programme for Government for the period 2011 to 2016 undertakes to "establish independent regulation of the legal profession to improve access and competition, make legal costs more transparent and ensure adequate procedures for addressing consumer complaints". These undertakings complement those structural reforms in the EU–IMF–ECB troika programme of financial support for Ireland aimed at removing restrictions to trade and competition in the provision of legal services and at the reform of the legal costs regime. Effect is being given to these structural reform commitments in the form of the extensive provisions of the Legal Services Bill 2011, which remains a priority under the Government's legislation programme. Second Stage has been completed in the Dáil and Committee Stage is due to begin on 10 July.

The Bill makes extensive provision, particularly in Part 9, for a new and enhanced legal-costs regime that will bring greater transparency to how legal costs are charged, along with a better balance between the interests of legal practitioners and those of their clients. It is particularly relevant to this subject that the Bill provides for a new office of legal costs adjudicator to deal with disputes about legal costs. At present, these are dealt with by the Office of the Taxing Master. The new office, headed by a chief legal costs adjudicator, will modernise the way disputed legal costs are adjudicated, with greater transparency. The office will be empowered to prepare legal-costs guidelines. It will establish and maintain a publicly accessible register of determinations which will include the outcomes and reasons for its determinations about disputed legal costs. It should be recalled that the two existing taxing masters have been appointed by public competition under the enhanced qualification criteria of Part 14 of the Civil Law (Miscellaneous Provisions) Act 2011, which was enacted to prepare the way for the legal-costs reforms contained in the Legal Services Regulation Bill. The Bill also sets out, for the first time in legislation, a series of legal-costs principles. These are contained in Schedule 1 and enumerate the various matters that may be taken into account if disputed costs are submitted for adjudication. Clearly, therefore, the Legal Services Regulation Bill will introduce a range of structural reforms that will make legal costs far more amenable to public scrutiny and competition and subject to more modern and business-like adjudication procedures than ever obtained in the past. The Minister does not propose appointing another taxing master in these circumstances as the necessary reforms are already under way and the matters raised by the Senator can continue to be resolved as part of the managed transition to the new legal-costs architecture contained in the Legal Services Regulation Bill, and as may be considered appropriate by the new office of the legal costs adjudicator.

Colm Burke (Fine Gael)
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While I fully accept that reform is taking place, it will not resolve the problem immediately. There are issues to be addressed. I will be writing to the Minister directly about the matter. There is a cashflow problem and it will cost jobs. That is the reality and the position will not change immediately. The unnecessary delay due to the volume of work facing taxing masters is of major concern. I do not accept the response that the period between the submission of costs and a hearing is only ten weeks. It is certainly not the experience of the people to whom I speak.

I understand that the Law Society of Ireland wrote to the Minister on this matter. I accept that reforms are taking place, but something should be done immediately on this matter. The new legislation will not be implemented for at least another six months. It will take yet another six months to set up the system. Therefore, there will be a 12-month gap.

I do not understand why all departmental and statutory agency legal business is being farmed out to legal practices in Dublin and not to other practices around the country. This matter needs to be tackled also.

Kathleen Lynch (Cork North Central, Labour)
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The Senator should write to the Minister directly. I do not dispute what the Senator is saying for one minute because he operates in and is closely connected with this area. It is therefore very difficult to dispute his experience.

I should also mention that the Courts Service has informed the Minister that the total number of bills lodged in 2012 represented a 34% decrease on the number lodged in 2011. That, which is related to the downturn in business, probably makes the Senator's case. The Minister reiterates that he does not intend to appoint another taxing master in view of the reforms he is undertaking. The views of the Senator will be conveyed to him.