Seanad debates

Wednesday, 13 May 2015

Legal Services Regulation Bill 2011: Second Stage

 

Question proposed: "That the Bill be now read a Second Time."

10:30 am

Photo of Frances FitzgeraldFrances Fitzgerald (Minister, Department of Justice and Equality; Dublin Mid West, Fine Gael)
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I am pleased to be before the Seanad today to present the Legal Services Regulation Bill 2011 which completed its Dáil Stages on 22 April. The Bill has come a long way since its publication in 2011 when it began its life as a structural reform under the EU-IMF-ECB troika programme. The Bill is now the subject of a country-specific recommendation under the EU semester process which has succeeded the troika. The Commission will continue to monitor the progress of the Bill as an ongoing deliverable under the semester process. The Government's continued commitment to the Bill's wide-reaching structural reforms is also reflected in the fact that the Bill is a key component of the Action Plan for Jobs, the medium-term economic strategy 2014-2020 and of the national reform plan.

In our consideration of the Bill before this House, we have a unique opportunity to ensure that the Bill's structural reforms are firmly put in place with an appropriate balance between the interests of legal practitioners and those of their clients alike. This will provide a basis for sustained national recovery and competitiveness in the provision of legal services in the years ahead. As a platform for modernisation and reform, the Legal Services Regulation Bill has been much enhanced during its consideration before and passage through the Dáil. I have no doubt this will apply in the Seanad also.

The Bill, as amended and enhanced during its passage through the Dáil, now comprises 158 sections spread over 13 Parts, which makes it a very large Bill. It provides four main levers of change. First, the Bill provides for a new, independent. legal services regulatory authoritywith responsibility for oversight of both solicitors and barristers. While the Law Society of Ireland has successfully discharged the function of statutory regulator under the Solicitors Acts up to now, barristers have not been subject to similar legislation. As I will set out in further detail, an array of amendments has been made to ensure the independence of the new authority in both its appointment and in its functions.

Second, the Bill provides for an independent complaints systemto dealwith public complaints including those relating to professional misconduct. There will also be an independent legal practitioners' disciplinary tribunal todeal with both legal professions, thereby replacing the two separately operated tribunals that exist at the moment. The public will now make their complaints directly to the new authority and not through the professional bodies. In addition to formal misconduct procedures, provision has now been made for the informal resolution of more minor and consumer-type complaints such as those about inadequate services, which is a useful approach.Third, the Bill provides for a new and enhanced legal costs regime that will bring greater transparency to legal costs and will apply to barristers as well as to solicitors. The Bill sets out for the first time in legislation a set of legal costs principles at Schedule 1. The Bill also provides that a new Office of the Legal Costs Adjudicator will replace the existing Taxing-Master to deal with disputes about legal costs, will prepare guidelines and maintain a public register of determinations. A range of technical enhancements have been made to the legal costs provisions of the Bill taking account of expert views received.

Fourth, the Bill provides for a framework for alternative business models.It facilitates new forms of legal services provision such as legal partnerships and multi-disciplinary practices that take account of the emergent new business models in other common law jurisdictions and the huge advances made in business technology. It does not seek to impose the new models on legal practitioners, rather the intention is that the new models will operate successfully alongside the existing modes of business used by legal practitioners, including small solicitors' firms and, for barristers, the Law Library. The new models will facilitate legal practitioners by removing current restrictions on the way they deliver their services, it will facilitate consumers by providing more choice, better access and, in due course, lower costs, and will facilitate the removal of barriers to competition in the legal services market which were identified by the Competition Authority nine years ago. I introduced a number of key amendments on Report Stage in the Dáil relating to these new business models which further enhance their regulation and governance. Part 8 of the Bill refers.

I will go through each section briefly. Obviously I cannot give a comprehensive account of the Bill in all its detail but I hope to highlight the key issues.

Part 1 of the Bill headed "Preliminary and General"comprises five sections dealing with the Short Title and commencement; interpretation and construction, regulations and orders, expenses and repeals, respectively. There will be ongoing development of this part of the Bill before the Seanad when, for example, key definitions will come to be settled. In addition, the commencement dates for a number of the Bill's key provisions will be settled under section 1.

Part 2 of the Bill headed "Legal Services Regulatory Authority"deals with the establishment and functions of that new body. This Part of the Bill also sets out the powers of the authority in terms of codes of practice and professional codes and makes provision for its chief executive and staffing, its accountability structures, the powers of inspectors and the prosecution of offences.

There will be 11 members of the new legal services regulatory authority, six of whom will be lay persons and five of whom will be nominees of the legal professional bodies. The authority will have a lay chairperson. The members of the authority will be nominated by independent nominating bodies reflecting the authority's remit. Members will be appointed after a resolution approving such appointment has been passed by both Houses. Provision is made to ensure gender balance in nominations for the regulatory authority and its appointment will be staggered to ensure continuity.

Additional safeguards now apply to the possible removal of a member of the authority including a requirement for a resolution before both Houses with the added safeguard of the High Court, so the independence is locked in by these various provisions. The ban on public comment by the chief executive officer of the authority on policy has also been removed. These numerous safeguards are underpinned by the affirmation under the terms of the Bill in section 12(3) that the new legal services regulatory authority "shall be independent in the performance of its functions". It should also be noted that there will no longer be any ministerial role in the processing or approval of professional codes of practice. Those changes have been made since publication of the Bill.

This is also the Part of the Bill that enables the new regulatory authority to conduct a series of public consultations on such matters as the education and training of legal practitioners in the State, the possible unification of the solicitor and barrister professions, the creation of a new profession of conveyancer and possible other matters. This is a range of issues under which the authority could have consultations. Provision is also made for interim reporting. I draw the attention of the House to section 33 of the Bill which sets out these matters and the reporting periods that will apply. I have changed some of those reporting periods. All in all, I think Senators will agree, upon consideration of the Bill as it now stands, that the new Legal Services Regulatory Authority, as now set out in Part 2 of the Bill, is robustly independent.

Part 2 of the Bill is also important because it balances the interests of lawyers and clients in a fair and more transparent way. Section 12 sets out six objectivesto which the new Legal Services Regulatory Authority must have regard in performing its functions. Three of these are in the public-consumer interest - protecting and promoting the public interest, protecting and promoting the interests of consumers relating to the provision of legal services, and promoting competition in the provision of legal services in the State. The remaining three objectives support high standards in the provision of legal services, including supporting the proper and effective administration of justice, encouraging an independent, strong and effective legal profession, and promoting and maintaining adherence to the professional principles. These are the broad high level objectives which fit very effectively for the work of the authority.

The Bill also gives clear statutory expression to the core professional principles under which legal practitioners must act, namely, with independence and integrity, in the best interests of their clients, and by maintaining proper standards of work. They must also comply with the duties that are rightfully owed to the court and, they must, subject to professional obligations, keep the affairs of their clients confidential. These objectives and core principles will provide the policy bedrock for regulation and operation of the legal services market as we go forward with this new legislation. The professional and client interests at play in the provision of legal services are being mutually upheld under Part 2 of the Bill. This balance informs the entire Bill.

Part 3 of the Bill, as reflected in its Title, consists of section 36 which makes provision for the holding of clients' moneys. The holding of such moneys is, under existing law and regulation, confined to solicitors. It should be noted, however, that elsewhere in the Bill, that is, under section 104 of Part 8, this may change in the future. Provision is made under section 104 for the holding of public consultations on certain issues relating to barristers.

Part 4 of the Bill entitled "Matters Relating to Protection of Clients of Legal Practitioners",which are under ongoing consideration, provide for the making of regulations in relation to interest on clients' moneys as well as on professional indemnity insurance, respectively, while also setting out the parameters of the limitation of a legal practitioner's liability by contract.

Parts 5 and 6 deal with the new and independent framework being set up to deal with public complaints about legal practitioners. Part 5 deals with the informal resolution of complaints relating to inadequate legal services and charging of excessive fees as its title denotes. Covering sections 40 to 46, this Part of the Bill allows for the processing of consumer-type complaints which would not amount to misconduct as such and, therefore, lend themselves to more informal resolution. This is an important provision and it avoids putting every single complaint received through the more formal and costly misconduct procedures where an informal resolution can be more appropriate and proportionate to the case involved. It should be noted, however, that more serious overcharging of fees by a legal practitioner, that is to say where those fees are grossly excessive, will amount to the type of serious misconduct that will be dealt with under the more stringent procedures of Part 6 of the Bill.

Part 6 sets out the Bill's regime for dealing with professional misconduct by a legal practitioner whether a solicitor or a barrister. I draw attention to section 47 which sets out where an act or omission by a legal practitioner may be considered as constituting misconduct. Chapter 1 of Part 6 also includes provision for the making of regulations in regard to the processing of complaints, for the admissibility of complaints and for the possible resolution of a complaint by mediation. Chapter 2 of Part 6 provides for the establishment of a complaints committee and sets out the modalities for the investigation of complaints. It also provides for the publication of reports by the new regulatory authority in relation to these functions. Chapter 3 of this Part sets out the terms of establishment and membership and functions of the new legal practitioners disciplinary tribunal.This single tribunal, which will deal with solicitors and barristers, will replace the two tribunals operated by the Law Society and the Bar Council respectively. This chapter also sets out, in section 70, the sanctions that may be imposed by the tribunal where misconduct has been determined. Provision is also made for appeal to the High Court as well as to the Supreme Court under the terms set out in the sections concerned.

Part 7 of the Bill sets out the terms of the levy which will be imposed on those legal practitioners who will be regulated by the new Bill under sections 80 to 83. Following amendment during its passage through the Dáil, this part of the Bill now distinguishes, for the purposes of collecting the levy, between solicitors practising under the Law Society regime, barristers practising in the Law Library under the Bar Council regime, and those barristers who choose to practice outside the Law Library but are now to be regulated by the new legal services regulatory authority. The provisions of this part of the Bill have been refined to ensure that non-practising legal practitioners are not levied.

There have been important amendments made to the Bill since its publication on the proposed alternative business structures for the provision of legal services. Part 8 of the Bill now provides that legal partnerships and multi-disciplinary practices will be more effectively regulated, each in its own right. At the same time, section 86 of the Bill allows direct professional access to a barrister on non-contentious issues. This means that, in such cases, a client need not necessarily engage a barrister through a solicitor as generally happens at present.

The changes I introduced on Report Stage in the Dáil to the new legal business models have three main elements now embedded in the Bill. A series of new provisions will strengthen the regulatory powers of the new authority and make additional prudential provision for any future participation in legal partnerships and multi-disciplinary practices. These business models will also be subject to periodic review. Legal partnerships, that is to say partnerships between barristers and solicitors or between barristers themselves, will be subject to a public consultation process to be completed within six months of the establishment of the new regulatory authority, and are then to be introduced within six months of those consultations being completed. Multi-disciplinary practices, that is to say practices in which legal practitioners provide their services alongside other non-legal service providers, will now be supported by detailed research. This will focus on the likely effects their introduction may have on competition, on the legal services market and on the legal professions. The findings of this research on multi-disciplinary practices will then inform the six-month public consultation process already envisaged under the Bill and will also be laid before the Houses. The commencement of the provisions governing multi-disciplinary practices will then become a matter for the Minister following these processes and on foot of their outcomes and recommendations.

Under Part 8 of the Bill as it now stands, legal partnerships and multi-disciplinary practices will have to notify the new legal services regulatory authority when they commence or cease operations. Both will require professional indemnity insurance cover and a public register will be maintained. The managing legal practitioner in a multi-disciplinary practice must now be an actual partner and not merely an employee. A letter of engagement will have to be provided to clients specifying the services to be provided by the multi-disciplinary practice concerned and distinguishing which of these services are other than legal services. Refinements have also been made on who may participate in a multi-disciplinary practice without placing undue restrictions on the participation of legitimate business interests. While it may be allowed at a future date when the new legal services regulatory authority has been firmly established, corporate participation or investment in a multi-disciplinary practice is prohibited at this time. Taken together, these enhancements to the roll-out of multi-disciplinary practices are intended to obviate the need for any further primary legislation that might otherwise arise.

Multi-disciplinary practices do not only concern those legal practitioners who may choose whether or not to opt into them. They also have to be considered from the point of view of consumers and the protection of their interests or moneys. I want the new framework to facilitate a public consideration of the concerns of all sides and stakeholders in these practices, while nonetheless holding fast to the core deliverables of the Government's structural reform process. I am confident the measures now in place can combine to ensure the new legal business models being facilitated by the Bill can be better informed, better established, better operated, better regulated, better for customers and enterprise and better for the economy.

Part 9 of the Bill sets out the regime for the roll of practising barristers which will be maintained by the new legal services regulatory authority under sections 106 to 110. As I have said,.a distinction is now made between Law Library and non-Law Library practising barristers for that purpose.

We now come to the provisions of the Bill on legal costs. The Bill makes extensive provision, in Part 10, for a new and enhanced legal costs regime that will bring greater transparency to how legal costs are charged. Legal practitioners, whether solicitors or barristers, will be obliged to provide more detailed information about legal costs from the outset of their dealings with their clients. A cooling-off period is to be allowed for the consideration of costs by the client. When there are any significant developments in a case which give rise to further costs, the Bill provides that a client must be duly updated and given the option of whether to proceed with the case in question. In addition, the Bill sets out that it will not be permissible for legal practitioners to set fees as a specified percentage or proportion of damages payable to a client from contentious business and that it will no longer be permissible for barristers to charge junior counsel fees as a specified percentage or proportion of senior counsel fees.

Under the Legal Services Regulation Bill the current functions of the Taxing Master will be taken over by the new office of the legal costs adjudicator and the establishment, governance and modernised functions of this office are now set out. The Bill also sets out, for the first time in legislation, a series of legal costs principles, which are contained in section 1. They enumerate the various matters that may be taken into account in the adjudication of disputed legal costs. The Bill also provides for the establishment of a public register of determinations which will disclose the outcomes and reasons for decisions made by the legal costs adjudicator. The Bill seeks to achieve greater flexibility in the legal services market along with more competition and improved access to justice, and will pave the way for the introduction of new business structures for legal practitioners, including in partnership with non-legal service providers.

Part 11 of the Bill contains two additional provisions on legal costs including the upholding of the principle that costs follow the event.

Part 12 of the Bill sets out the framework for the application, grant or revocation of a patent of precedence, that is to say, the conferral of the status of senior counsel to a solicitor or a barrister.

Part 13 contains a number of miscellaneous provisions including provision that a barrister in employment may provide legal services to his or her employer; the regulation of movement between the professions of barrister and solicitor; and the regulation of the advertising of legal services under section 158.

We are at a very important point in the development of this legislation. I consider the Legal Services Regulation Bill to be at a very advanced stage of development, having taken on board a range of concerns and observations received in light of current Government policy. This has included our responses to those fundamental concerns which had been initially expressed about the independence of the new regulatory regime.

I also consider, particularly in light of the latest amendments made, that the new regime for new legal business models is very well balanced in terms of their regulated and considered introduction. The range of legal business options that will be offered by the Bill upon enactment must be openly facilitated and received. Legal practitioners will be able to choose the model through which they practice, whether that is the Law Library, the traditional solicitors' firm, the new legal partnerships or, in due course, multi-disciplinary practices. The new and existing legal services models will complement each other, as has been the case in other countries where these structures have been introduced. Equally importantly, consumers of legal services will have greater choice and access to justice. We are dealing with a more competitive cost structure.

We will have discussions in the Seanad, and I anticipate that further amendments will arise on matters such as the inspections and complaints regime which needs further refinement. I will table further amendments on the operation of the legal practitioners' disciplinary tribunal. I look forward to further discussions with the Law Society on the interface between its retained compensation fund functions and the independent operation of the new professional conduct regime that will cover solicitors and barristers.I also intend to bring forward provisions to allow limited liability partnerships as well as provisions to allow barristers to sue for their fees. These are both matters whose legal and other aspects are under ongoing detailed consideration.

As I have confirmed in the other House, I will continue to negotiate the staffing of the new regulatory authority, with the Minister for Public Expenditure and Reform, with the firm intention of resolving the issue of those existing staff of the legal professional bodies who deal with public complaints. I will also be enhancing the provisions of the Bill dealing with advertising by legal partnerships, including in terms of compliance with the EU services directive. In response to concerns raised, further attention will be given to the Bill's disclosure provisions, including as they may impact on client privilege and confidentiality. Other intended amendments will relate to pre-action protocols for medical negligence cases and e-filing in the courts. Extensive work is also being done on repeals and transitional provisions, and further technical amendments can be anticipated. This is a very large and complex Bill and we have further work to do on it. The key terms of interpretation contained in Part 1 of the Bill will be settled in the completion of the relevant Parts concerned.

Subject to its ongoing consideration before this House, it is my intention that the Legal Services Regulation Bill be completed so that the new legal services regulatory authority can come into operation without delay this year. An allocation of €500,000 has been made available under the justice Vote to support the establishment of the authority. This will be provided on a recoupable basis as the new regulatory framework is to be self-funding by means of a levy on the legal practitioners concerned.

Work on the Bill is ongoing in conjunction with the Offices of the Attorney General and the Parliamentary Counsel, and this will be reflected in the relevant amendments that I will be bringing before the Seanad. I thank the Attorney General and the Parliamentary Counsel for the detailed work in which we have been involved in recent weeks and during the course of the passage of this legislation through the Dáil. Needless to say, I will be consulting further with the various stakeholders concerned so that the Bill can be brought to finality.

I commend the Bill to the House and I look forward to hearing the views and exchanges of Senators on its provisions.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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I welcome the Minister to the House. Fianna Fáil accepts the broad thrust of the Bill. It is a long time in the making. It is like a slow Christmas cake in that it has been going on for some time. I understand there were various difficulties, but I must acknowledge that the last time the area of solicitors' partnerships and so on was seriously looked at was the 1890 Act, which was a Victorian piece of legislation from 130 years ago. I have some concerns about the Bill - if I did not, I would not be doing my job - but I broadly welcome it.

I am speaking as a solicitor, as I still have a practising certificate. Solicitors and the Law Society have totally bought into the idea of independent regulation. There is no way out of that - it is a must. However, while I accept the notion of independent regulation, it must be totally independent and must be independent of Government, regardless of who is in government. Otherwise, it may not be worthwhile.

One of the things the troika mentioned was solicitors' costs. From my experience in a small rural practice in west Cork, which would be typical of rural Ireland, if one takes out the four or five big practices that charge €450 an hour or so, in my home town and in many of the towns in Mayo and Clare, one would be lucky to get €125. It is the big heavyweights in the business who dictate the pace and the costs. Many of the small solicitors' offices are struggling. I met a man in Dublin last year or the year before who was a qualified solicitor but who drove a taxi part-time to survive because he was struggling. That is something that must be dealt with, because if one is dealing with the question of costs, hit the big sharks that are making massive money, but be careful not to destroy the small practices that are struggling to survive. In many of them, including those in Kerry or Donegal, there are three, four or five solicitors in the practice. The Minister should be very cúramach not to damage those. Otherwise, the Government will have done terrible damage to rural Ireland once more because of centralisation and so on.

Regarding multidisciplinary partnership, where solicitors might be in partnership with accountants, estate agents, actuaries or whatever, we have all had to contribute to the compensation element of the Law Society, which has had to bail out rogue solicitors for years. It is important that this sort of funding be ring-fenced to cover solicitors only. I am not sure of the mechanics of it, but there is no point having a solicitors' fund that bails out an auctioneer or an accountant in a multidisciplinary practice. It is a difficult one to concoct, but I want to fire a warning shot in this regard.

I agree fully with the whole area of professional conduct. We must have the highest standards. I came back from England in April 1981 and opened up a small sole practice in Bantry. I was one of the first rural solicitors, and on the advice of the Law Society then - I cannot even remember who the general secretary was - it cost me £750 to take out professional indemnity insurance. It is now a must, but it is a headache for many offices as it is quite dear - probably around €3,000 per solicitor now. It has to be there but we must find a way of making it fair across the system.

Another issue that the Law Society has probably discussed and which we must deal with in this Bill - there is no point in saying we will deal with it in another Bill - is the area of limited liability partnership for solicitors and limited liability company structures for solicitors. It is a long time in the making. I cannot speak for the Bar Association, although I met both groups. The Law Society has done a great deal of negotiating, both with the current Minister and with her predecessor, and its view on this, which I hear from my local bar association, is that a negotiated process with the Minister, her officials and the Department is better than amendments tabled by the likes of me or my colleagues in the Dáil, which the Minister may not accept. Some areas are still to be sorted out. We might deal with that by way of amendments. I hope the Minister will, during the passage of this Bill through the House, deal with amendments that we submit in good faith. At the end of the day, it is now the Minister's Bill. She will be rewarded or condemned on the eventual result of this Bill, which is important.

I will mention another aspect which, while it may not directly concern the Bill, certainly concerns the legal practices. The troika came in and said that legal expenses in Ireland are very severe. That is grand for the big firms in the cities. One of the things that happened was that free legal aid was reduced by 33%, the second day in court was brought down to €50 or €60 and travel expenses were reduced from 48 cent to 24 cent. In my area, five courts, in places such as Castletownbere, which is two hours from Cork city, Schull, Dunmanway, Kinsale and Glengarriff, have been closed. The least well off are being hit the hardest by these cuts. A friend of mine from another firm said that if a solicitor goes on a day out to Cork for a free legal aid case, just 24 cent a mile is given to him or her in travel expenses. Most of the day is gone, as one has up two hours driving each way from some areas and must pay for parking, so the solicitor will be at a loss. It was a knee-jerk reaction to cut this down to keep the troika happy. That is only fiddling at the edges. They are not the real costs at all. That will have to be recognised, because the people who get free legal aid are the most disadvantaged in society. We must not lose sight of that. It is critical.

Matters relating to the protection of clients of legal practitioners are mentioned in the Bill. It is, of course, extremely important that clients and their moneys are protected. In the second page of the Minister's speech, she mentions the six objectives.I have no difficulty with "protecting and promoting the public interest", and most would not. I would go along with "protecting and promoting the interests of consumers relating to the provision of legal services", subject to the point I made already about being careful not to wipe out the smaller fry - that is, solicitors in partnerships of two or three in rural areas. The Minister then stated the remaining three objectives support high standards in the provision of legal services, the first of which was "supporting the proper and effective administration of justice". I have no bother with that. It is good, and we should strive to emulate the highest standards in this regard. The second, "encouraging an independent, strong and effective legal profession", is not a bother. That is also important, as is "promoting and maintaining adherence to the professional principles." In my 35 years of experience as a practising solicitor, the vast majority of lawyers, both solicitors and barristers, strive to maintain the highest principles. Unfortunately, a few rotten apples have given us a bad name, and there were serious cases of fraud. It should be recognised that most solicitors give good service, and they seek to maintain the highest possible standards for the profession, which we must maintain and achieve.

Earlier I mentioned multidisciplinary partnerships, which are dealt with in sections 15 to 17, inclusive. Northern Ireland and Great Britain, Canada, the United States, Australia and all the Commonwealth countries have that type of limited partnership set-up. Ireland is the only country that does not, and it is important that we row in behind that. I am not saying we should be using that to get out of our responsibilities and diminish the standards that we should have for the public. In the case, for example, of a ten-person partnership in which, unknown to the others, a crooked solicitor brings down the ship, there should be some system to protect the other nine if they are innocent. There was one famous such case here in Dublin, in which the solicitor is not in the country. I will not name names. In that case, there were staff working with that person who were totally innocent and unaware of the mischief that was going on. That is something of which we must be careful.

The other point I will make in my limited time is that the Minister is setting up a new disciplinary tribunal. I do not really have a problem with that, but we must be careful that the outcome of the Bill is not the setting up of another quango or two that create problems. Obviously, we need discipline, independent monitoring and an independent regulatory body, but I would be afraid of ending up with a glorified quango.

I will give great credit to the Minister's predecessor, although sometimes I have been critical, in trying move this forward. It is a substantial piece of legislation. It is a brave step. Although it has been talked about for 20 or 30 years, it is the first time a Government came along, grasped the nettle, took the bull by the horns and took on the Law Society and the barristers' association. For many years, it was the tail wagging the dog. I appreciate that. Even though I might be a member of the Law Society, I have no qualms about saying that mistakes have been made. For decades, the powers that be within those bodies resisted change. They wanted things to go on as they were.

I hope the Bill will be passed into law before the year is out. The Minister stated that she hoped it would be up and running. It is such a substantial piece of legislation that we should be given adequate time on Committee and Report Stages. There is yet a long summer to the recess in the middle of July, and I would not like Committee Stage to be taken next week and Report Stage the following week. Without prolonging it, there should surely be a two-week gap in between to allow us to submit amendments and discuss them. The Minister also stated that she was amenable to amendments. It is important that the Bill, when finally cooked, is the best that the Oireachtas can produce. I wish the Minister well with it.

Photo of Martin ConwayMartin Conway (Fine Gael)
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I, too, welcome the Minister to the House to put through what is an extremely important, and in many ways historic, piece of legislation.

I agree with practically all of what Senator O'Donovan has said. I certainly would echo his concerns about rural areas. I defer to his 35 years of on-the-ground practising experience, which is worth a lot. The Senator's input into this Bill here in the Seanad will be important. I would agree with his request that appropriate time be given between Committee and Report Stages, and I will be conveying that view to the Leader, because it is the first time that a Government has tackled and tried to reform the legal professions.

As has been pointed out, the first step was the publication of the Bill in 2011, when there was war. We can all remember the lobbying that went on and the phone calls, the meetings, the briefings, etc. That was because some resisted change. Human nature being what it is, change is something that makes one uncomfortable and uneasy. When it involves an organisation that, by and large, has served the country well, as the vast majority of solicitors and barristers have served their profession and the country well, there is a natural resistance to change that percolates from institutions which have not really changed.

There have been bad eggs, bad apples or bad oranges - whatever one wants to call them - on both sides. There have been individuals who have made vast amounts of money from an unregulated sector, particularly barristers. It is quite correct to state that there seems to be a gulf between what those at the top in the profession are making and what those on the ground are making. Certainly, I am aware of solicitors - I am sure Senator O'Donovan and others know them as well - who will write a letter and are not even in a position to charge for it because they know the client has not got it. There are few senior counsel who will write a letter or give a legal opinion without getting paid. There are hundreds of barristers at the bottom who are trying to establish themselves who are on less than the minimum wage, and I suppose that is where the unfairness comes in. That can be mirrored in many other professions where those at the bottom rung of the ladder starting out are struggling. Certainly, for the past number of years, with the downturn in the economy, this has been the case with young barristers, with many of them having to seek alternative employment. Indeed, many young solicitors who qualified during the years of the Celtic tiger, and who were earning reasonably good money during those years, found themselves unemployed and having to retrain and find alternative work. One would hope that some of those will be able to go back into a profession that will get its confidence back, and that, when we see an upturn in the economic fortunes of the country, there will be business for those many qualified solicitors who have had to either emigrate or retrain for different lines of work.

No sector or profession can be self-regulating, and any fair-minded person would have to accept that. What is being proposed here as a regulatory authority is reasonable. Of course, there are concerns about the independence of it. It is extremely important, and goes to the bedrock of the Constitution, that the legal profession and politics should be separate. The Minister has gone a long way to ensure that the regulatory authority will be independent, both in the structure proposed in the Bill and in the make-up, including the chairperson, those who will be nominated from the legal professions and the others who will be nominated.In terms of gender balance, every box has been ticked to ensure it is fair, transparent, open, balanced and, most importantly, workable. Members of this House in the legal profession have raised the issue of the Taxing Master and the fact that they and solicitors have waited years for a judgment on fees. People who are struggling in their own professions and businesses have had cases with the Taxing Master for years, which is totally unacceptable. The new proposal that the Minister has outlined is very welcome as part of the regulatory authority.

I would also suggest that once a claim is lodged with the cost adjudicator, there should be a period of so many weeks, months, or whatever is appropriate, within which a decision should be made, unless there is a very good reason not to. Nobody should be left waiting years to get paid. We introduced legislation over the years to ensure that the State would pay companies within a specific period for services rendered. The principle and perhaps the timeline in that legislation should prevail with this cost adjudicator when there is a dispute about fees.

The complaints structure that has been outlined is certainly reflective of what people would want. No fair-minded person could expect a member of the public to contact the profession to make a complaint about one of its members. I have no doubt it worked very well in many cases, but we are now living in an era in which openness, transparency and independence are valued principles. It is appropriate that this process be independent and that a member of the public be able to make a complaint through the authority as opposed to through the professions. I know this caused a lot of debate back in 2011 and 2012 when the legislation was first published. What is proposed is appropriate and fair. I hope that over the years we will see a reduction in the number of complaints that should occur when a profession is properly regulated and there are codes of practice and conduct - for example, in the areas of costing and charges. This legislation is trying to deal with the issue of costs for the first time and is making a fair and reasonable proposition in terms of dealing with costs. It is imperative that there be a robust and effective means of complaint which is fair to both sides.

I take on board Senator O'Donovan's points about the free legal aid scenario. I was not aware that travel expenses had been cut to that level; €0.24 per mile does seem very low. Knowing west Cork as I do, or even some parts of County Clare, that would not even fill the tank, let alone pay for parking and all that goes with it. I would like to think these are also issues the regulatory authority can consider in a dispassionate and fair way.

As I said at the beginning of my remarks, this legislation is groundbreaking and is going to bring the profession into the 21st century and beyond. It is going to reflect modern best international practice and is taking the best from all spheres to produce something that everybody can stand over and be proud of. There is no reason our system cannot be the best in Europe and the best in the world. I am looking forward to a robust debate. There are many people in this House with a lot of legal experience who have a significant amount to offer. I sincerely hope the House will play a meaningful part in ensuring that the final product is the best that this Oireachtas can produce.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I warmly welcome this Bill in principle, which is intended to deliver greater speed and transparency and easier access, as well as to tackle excessive legal fees. It represents the most comprehensive reform of our legal structures and legal services industry in the history of the State.

We have a great responsibility as legislators to deliver this reform responsibly. I want to sound a loud note of caution at this stage about putting on a statutory footing any rules that are incompatible with competition law and in particular any rules that have already been ruled by the Supreme Court to be non-judicable and therefore not legally binding. For instance, in 2005 the Supreme Court ruled that the code of conduct of the Bar Council of Ireland is non-judicable. The reform provided for by this Bill is crucial and long overdue. We must devise an appropriate balance between the right of the public to access justice by way of recourse to a well-functioning legal profession at a fair cost, and the needs of legal practitioners to carry out their work in an appropriate and professional environment for reasonable remuneration.

We must also acknowledge that action in this regard was a prerequisite of the EU-IMF-ECB troika programme and the enactment and delivery of the Bill remain the subject of a country-specific recommendation under the EU semester process which has succeeded the troika programme. The European Commission will therefore continue to monitor the Bill's progress closely.

In developing the Bill, both the Minister for Justice and Equality, Deputy Fitzgerald, and her predecessor, Deputy Alan Shatter, have dealt with many of the most complex and significant issues in our democratic system. These include the constitutional independence of the legal professions and the role of the professions in enabling citizens to access justice and in its fair administration. I cannot emphasise too strongly the importance of access to justice. I will raise two issues at this juncture, the first of which concerns costs. Access to justice for all regardless of income or background is a core democratic value, yet it has long been known that legal costs in Ireland are prohibitive for low-income families. Ireland shares with the UK the dubious honour of charging the highest legal costs in Europe. The Bill purports to deliver a new and enhanced legal costs regime that will bring greater transparency to legal costs and will apply to both barristers and solicitors.

The high legal costs regime in Ireland is caused by severe restrictions on access to lawyers. There are hundreds of barristers who are available and willing to act directly for consumers but are prevented from doing so by the Bar Council in so-called contentious matters and many other matters. A sum of €1,000 to €1,500 would get a meeting with a solicitor and an opinion from a barrister on a routine matter. That is a significant amount of money for the vast majority of people in Ireland. Many will think of it as a monthly mortgage payment, a month's rent or a month of child care. The courts are currently awash with lay litigants who simply cannot afford to pay for formal legal representation. I am reliably informed that many barristers would be only too happy to act directly for those lay litigants for modest fees. For them, some work and some payment is better than none.

However, there is an issue concerning direct access to barristers. On closer inspection, direct access is permissible only in non-contentious cases, which represent a mere 2% of barristers' work. The response that contentious work involves handling client money does not add up, as not all contentious work involves this. Of course, there must be rules around handling client funds. Such rules already exist in the Solicitors Act and could very easily be applied to barristers. Instead of seeing barristers leave the profession in large numbers, as happened particularly during the recession, they should be let stay and earn a living providing excellent, good value and lower-cost services on a direct professional access basis. There is no legislation on the Statute Book preventing that.

We need to exercise extreme care in putting the prevailing anti-competitive restrictions concerning barristers onto the Statue Book. Indeed, as the Bar Council itself is not currently a statutory body but a private body, I wonder why it is being put on a statutory footing at all.I remain unclear on this and perhaps the Minister can clarify it.

The second issue I wish to raise concerns the restrictions on advertising and commercial communications by lawyers. The Irish Competition Authority's report into the competitive practices of barristers and solicitors in 2006 concluded that the legal profession was in need of substantial reform and was permeated with unnecessary and disproportionate restrictions on competition, the overall effect of which limited access, choice and value for money for those purchasing legal services. It recommended:

for both barrister and solicitor advertising that:...the existing rules should be reformed. Truthful and objective advertising gives clients useful information and helps them to choose among competing lawyers. Advertising should be controlled in a more pro-consumer manner by way of rules that focus on preventing factually inaccurate advertising or advertising which would bring the administration of justice into disrepute.
Despite a target date of 2008 for the implementation of the Competition Authority reforms and despite the initiation of an infringement procedure against Ireland by the European Commission in November 2013 for continuing to allow the Bar Council to maintain the restrictions it has on advertising, and a letter of formal notice in late 2014, what we see before us in the Bill, namely, in section 158, still does not comply with Article 24 of the services directive, regulation No. 25 of SI 533/2010 or the Charter of Fundamental Rights.

I am very concerned that the State's course of action in failing to address the deficiencies and in resisting the Commission's case since 2013 is building up a liability for the Irish taxpayer. I acknowledge the commitment by the Minister, Deputy Fitzgerald, in the Dáil, specifically in response to an amendment tabled by Deputy Catherine Murphy, that she will table an amendment in this regard on Committee Stage in the Seanad. I look forward to considering that amendment. I note with slight concern that the Minister spoke of finding the appropriate balance between the exigencies of the services and those of Government policy. Ireland is required to comply with the requirements of an EU directive.

I will engage on Committee and Remaining Stages but I wanted to outline the two areas which I believe need greater attention.

Photo of Ivana BacikIvana Bacik (Independent)
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I welcome the Minister and the opportunity to speak on Second Stage of the Bill. As we know, the Bill has been a long period in genesis and commenced Second Stage in the Dáil three and a half years ago in December 2011. None the less, it has been improved and enhanced greatly during the process and I am very glad to hear the Minister say further amendments will be made in the Seanad and that she will be taking those amendments. It makes our debate much better in the Seanad generally when there is that concession at the beginning. I also welcome the visitors to the Visitors Gallery, as I know they have a particular interest in the Bill.

I should declare my own interest as a former practising barrister and former member of the Bar Council. However, I should say that I also have an interest in terms of reform generally of legal practice and of the legal professions and as the co-author of a 2003 report into gender discrimination in the legal professions in Ireland, which was entitled, Gender InJustice. In that report, which was the first of its kind and an update of which is currently being worked on by the Irish Women Lawyers Association, we made some 50 recommendations on how different aspects of legal practice could be improved upon and reformed in terms of encouraging greater gender balance. Since then, we have seen quite a number of women in very prominent positions in legal practice and, indeed, in the Courts Service and in the Government but none the less, many of the reforms we recommended still remain relevant.

This Bill will see some improvement in terms of gender balance, in particular in Part 12, which deals with the provisions around senior counsel. One of the points we made in our report was in regard to the very low number of women who had become senior counsel but again, things have improved a little. One of our key findings in regard to both the solicitor and barrister professions was the need for transparent criteria for promotion to senior counsel or to partnerships in solicitors firms. I am very glad that in Part 12, we see a much clearer statement of the way in which people can become senior counsel as I believe this will help to increase gender balance, apart from being a good thing in itself.

I am also conscious, from what others have said, of the huge imperative to ensure more transparency in the costs process. It is in Part 10 and Schedule 1 that we see clear criteria listed on legal costs principles, which is welcome. As others have said, however, it is also true to say there are very many solicitors and barristers at the lower end who earn very little and who are not perhaps reflected in the high level of fees that has often been publicised. There is also a great number of legal practitioners who work pro bono, as we are all aware. Just last week, we initiated a new research project across Trinity College and DIT called CICL, or Changing Ireland, Changing Law, where we are looking at the impact of public interest litigation on social change. At our first seminar last week on women and legal change, we heard about some very important cases that were taken on a pro bono basis by the legal teams concerned and it is important to acknowledge this.

Turning to the content of the Bill, we had a hearing at the Joint Committee on Justice, Defence and Equality in March 2012 at which stakeholders like the Law Society and Bar Council made submissions, so we were very well briefed on the Bill at that stage. Of course, the Bill has since been changed and very welcome amendments have been made.

The Minister spoke of four main levers of change across the 158 sections of the Bill and I want to address the first two of those levers. She mentioned amendments would be needed to Part 1 on interpretation. I note there may need to be some technical changes to the definition of “Complaints Committee”, which is described as being "established pursuant to section 51", whereas I understand it is now section 58. The definition of "complainant" is also referred to in Part 5, so perhaps that should also be reflected in the definitions section. I accept these are minor technical points.

Looking at the first of the Minister's levers for change, the Bill provides for a new, independent legal services regulatory authority to be established under Part 2. This is extremely welcome and, as the Minister said, all of us in the House would agree on the need for robust independence and on the greatly improved provisions in the Bill.

I very much welcome section 8, which provides for gender balance among the members on the authority.Moreover, of the 11 members, a majority must be lay members, which we welcome. I also welcome the fact one of the practitioners is to be nominated from the Legal Aid Board as it is important the board is represented on this authority. On the reporting mechanism, as a member of the Joint Committee on Justice, Defence and Equality, I am delighted to see the committee has a specific role in section 19 in that reports are made not just to the Minister but to the committee.

Section 21 deals with the powers of the authority in regard to professional codes. The Minister pointed out there is no longer any ministerial role in that regard, which again is very welcome. Section 21 refers to what the authority is to have regard to in drawing up codes. I wonder whether reference should be made to section 12(5) and the criteria therein as well as to section 12(4). Section 12(5) refers to professional principles to which legal professionals should adhere. It seems to me those are important and should be referenced specifically in the code.

The Minister has pointed out there will be amendments to the powers and role of the inspector. I wonder whether in section 30 more criteria should be specified as to who should become an inspector of the authority. However, I know we will hear more from the Minister on that.

On section 32, it is very important that admissions policies will be spelled out and that there is oversight of them. Again, something we found in our 2003 report is that admissions policies are critical in terms of both professional bodies.

On section 33, I very much welcome the provisions for public consultation and the issues of education and training and on the very thorny issue of unification of the two professions. I note the Minister has changed the time limits and we will now see a report on education and training two years from the establishment day. Again, I know from my role as an academic, there is a great deal of interest among academic institutions across the State as to how that will transpire. It will be very important that the institutions have a role in the consultation, which I know they will. Similarly, with regard to the unification of the professions, I welcome the fact that has a four-year timeframe.

Turning to the second lever of change in the Bill, the independent complaints system, I believe we would all very much welcome this and the fact there is direct access by members of the public. I also welcome the idea of the minor complaints process in Part 5 of the Bill, as it is important that we see complaints being demarcated between the more minor and the more serious.

Having looked at the definition of inadequate services at sections 40 and 47, I believe it is a very difficult measure for anyone to make between what is a substantially inadequate service and what is just reasonably inadequate. I can imagine there will be a lot of wrestling with that question. I speak as one who practised at the criminal Bar. Will there be any specific provision for the criminal Bar? I am conscious that our professional indemnity insurance as criminal practitioners was much less than for barristers who conducted practice on the civil side.There is an issue around what is inadequate performance at the criminal Bar. If one's client is convicted, does that warrant the making of a complaint? I imagine there may be issues to be teased out a little further in this regard.

Section 58 specifies that there will be 27 people on the complaints committee. Should that section contain more detail on the appointment of lay persons? It seems to be much less specific than the very detailed provisions pertaining to the proposed legal services regulatory authority in Part 2. The same thing applies to the disciplinary tribunal. Should the more serious complaints sections in Part 6 contain more detail on who should be appointed? I note that ministerial nominations will be made in the case of the disciplinary tribunal. It is interesting to note that section 64 provides that the chair of the tribunal may be a lawyer, but the chairs of the divisional tribunals must be laypersons. I wonder about that.

I would like to speak briefly on the points made by the Minister about the other two key headings. I welcome the decision to provide for more transparent criteria around costs. The question of the costs following the event, which is addressed in section 142, came up during our work on public interest litigation. I appreciate that the Bill simply enshrines current practice, but that practice has a hugely chilling impact on public interest litigation in this country. I wonder whether we can look at that. If someone is genuinely taking litigation in the public interest, the courts currently have the discretion not to award costs against the litigant. In some cases, the litigant is awarded costs even though the litigation was not successful. I know there is a difficulty for practitioners in terms of the criteria the courts apply to that. I am speaking from experience when I say it is very difficult to advise a client on whether a costs order will ultimately be made against him or her if he or she loses in a public interest case. That is a key issue.

I would like to make a point about section 123, which imposes an obligation on legal practitioners to address clients as to what their bill of costs is likely to be. That obligation may be straightforward in some areas of practice, but I wonder how it is to be addressed in criminal practice, where the majority of clients are on legal aid. There are particular issues in this regard in public interest litigation as well.

I suppose I could speak about a range of other issues. I agree with the points made by Senator van Turnhout about advertising. I think we need to look at section 158 in more detail. We need to be careful to ensure these provisions make for greater diversity and greater public access to legal practitioners. We might look at some provisions again on Committee Stage. I refer, for example, to section 106, which relates to barristers. Perhaps we should consider giving recognition to barristers who are working part-time or are on maternity leave. The Bar Council has introduced much better provisions in this regard, as indeed the Law Society has done since we made our report.

I expect we will be able to tease out these points on Committee Stage. I know the Minister, Deputy Fitzgerald, will provide adequate time for Committee Stage in order that we can table and discuss amendments. I am sure adequate time will also be provided for between Committee and Report Stages. We need co-operation and support from all stakeholders to ensure we get a strong and effective Bill that provides us with effective and robust regulation of legal practice in the interests of clients and the administration of justice.

Photo of Feargal QuinnFeargal Quinn (Independent)
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I welcome the Minister of State. I think he is getting very fond of us. He seems to be coming here a little more often than he did previously. I feel a little shy about speaking after listening to such expertise among those who have spoken up to now. That expertise has come from different areas. Senator O'Donovan reminded us of what happens in a smaller solicitors' office in a smaller town. Senator Bacik spoke on the basis of her experience at the Bar Council and elsewhere. It has been very interesting. However, I should say I am not that shy. I am sure the Minister of State was not born when I defended a case that went to the Supreme Court. I won in the Supreme Court on the basis of something I had learned when I was studying constitutional law at university, which is that the Irish language takes precedence over the English language if there is a doubt about a word. The relevant word in my case was "discrimination". I discovered that the Irish-language word was "idirdhealú", which means "distinguish between". I won it on that basis in 1971, which I expect was long before the Minister of State was born.

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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It was two years after I was born.

Photo of Feargal QuinnFeargal Quinn (Independent)
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Okay. The Bill before the House is worthy of support. It has taken a long time to get this far. I hope this legislation comes from the perspective of putting more regulation on the legal profession. It sounds from everything I have heard today that this is needed. It has been argued that this kind of regulation is necessary because the legal profession has not adequately regulated itself.

One of the other big arguments in favour of this Bill is that it will reduce customer costs. We are all well aware of the massive legal costs in this country. We heard today that Ireland and Britain have the highest legal costs in Europe. While the Government argues that costs will come down, some people in the legal profession argue that this legislation will not affect this aspect of the matter. I would like the Minister of State to tell us whether any cost analysis has been done to get exact figures on the savings the customer is likely to get. Such analyses are the norm in business. If this argument is to be supported, I would like to get some concrete figures on the savings. I would be interested if the Minister could provide such figures at this stage or later. I am asking for a general view on the likely savings for the customer.

I proposed the Construction Contracts Bill 2010, which subsequently became law as the Construction Contracts Act 2013, to reduce legal costs and the costs associated with going to court. It has not yet been enacted but it is very close to it. The adjudication process provided for in that legislation will mean that disputes among construction contractors can be resolved without lengthy and costly court processes. However, this Bill has still not been brought into operation. I suggest this is a clear example of something we can do to reduce the need to engage in legal proceedings. It presents a clear alternative dispute resolution mechanism. I hope the Construction Contracts Act can be enacted as soon as possible.

I would like to mention an idea that could be included in this Bill and would help to reduce the cost of legal proceedings. According to the World Bank, the introduction of electronic court filing platforms has been one of the commonest features of contract enforcement reform throughout the world over the past year. It claims:

These enable litigants to file initial complaints electronically - increasing transparency, expediting the filing and the service of process, limiting opportunities for corruption and preventing the loss, destruction or concealment of court records. In Singapore the judiciary launched an electronic litigation system designed to streamline the litigation process and improve access to justice. The system allows litigants to file their cases online - and it enables courts to keep litigants and lawyers informed about their cases through e-mail, text messages and text alerts; to manage hearing dates; and even to hold certain hearings through videoconference.
The benefits of electronic courts, or e-courts, include cost and space savings, increased security, greater transparency and expanded access to justice. The availability of 24-hour filing and remote access allows people to file documents without having to go to a particular building. The savings from the implementation of an e-court system could be substantial. I am reminded of the massive reduction in the use of paper that would be possible if companies could file contract complaints online. I have often spoken in this House about the use of paper when, in many cases, we could do without it.

The electronic filing of initial contract enforcement complaints has been introduced in other EU countries, including Greece and Lithuania, in the past year. Given that this Bill aims to improve the efficiency of the legal profession, which I am sure it will achieve, would the Minister be open to this particular measure which would help businesses? The introduction of e-courts, like the enactment of the Construction Contracts Act 2013, would help to speed up the resolution of disputes and give more protection to business. Crucially, it would also mean we would modernise the legal profession even further, which is a very clear aim of the Bill before the House. I would be very interested to hear whether we will be able to achieve that. I do not expect to get those answers today, but I certainly believe we will be able to develop these themes on Committee and Report Stages. I encourage the Minister of State to develop what we are achieving here. I know his heart is in the right place.

Photo of Catherine NooneCatherine Noone (Fine Gael)
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I welcome the Minister to the House, and I welcome Mr. Ken Murphy, director general of the Law Society. Mr. Kevin O'Higgins, the current president of the Law Society, was here until a few minutes ago. There are others who have an interest in the legislation.

The Government remains committed to the completion of the Bill in order to allow the new legal services regulatory authority become fully operational as soon as possible. The Bill brings about four primary changes, including the establishment of a new independent legal services regulatory authority, an independent complaints system, a new legal costs regime, and a framework for alternative business models. Change is difficult in general and people struggle with change. In all professions there is discourse about change, but a radical amount of change is suggested in this legislation. Communication and consultation with the professions is a must, and I am glad to hear what the Minister said about further potential amendments to the legislation.

The intention of the legal costs regime is to bring greater transparency to legal costs as they apply to barristers and solicitors. For the first time, the Bill sets out in legislation a set of legal cost principles. I should declare an interest. One is nobody around here unless one declares an interest. As a practising solicitor, I am aware that solicitors have been up to speed with costs and the detailed itemisation of costs for a number of years. It has long been recognised as standard practice in the firms in which I have worked. Among colleagues, it is well recognised. As a relatively recently qualified solicitor, I remember trying to track down a junior counsel, who will remain unnamed, for weeks for his fee, because I wanted to get the bill out. Eventually I got a piece of paper with the person's name and address and the words "Two thirds senior". We have come a long way, as have the barristers. That is what brought us to this point - the idea that a professional could request two thirds of the amount a senior counsel would get, without going to the trouble of finding out whether it was two thirds of €5,000, €10,000 or €2. That was remarkable, and we must welcome change on that front.

The Competition Authority has found the legal profession in need of substantial reform, which we all acknowledge. It believed the profession had many unnecessary and disproportionate restrictions on competition, as referred to by an earlier speaker, and that these needed to be reformed so that consumers could benefit from greater competition in legal services. The European Commission has urged the speedy implementation of these reforms. However, some concerns have been outlined by those in the profession about the proposal to allow for the creation of multidisciplinary partnerships, whereby solicitors, barristers, accountants and other professionals work together and can set up joint businesses for their services. When discussing the multidisciplinary partnership model, it is important to note these concerns and ensure that a fair balance is struck.

I concur with what Senator O'Donovan said about costs. There is a perception that all solicitors are creaming it. Having been a part of a practice for the past number of years, I agree with the point about rural solicitors. It can be very tough for them, but many urban solicitors are perceived, being in the city, to be doing extremely well. Many of them have done well to keep their heads above water over the past ten years. In many instances they are working hard to keep people paid, and this needs to be acknowledged. It is nice for me to have the opportunity to do so.

The Bill facilitates new forms of legal services provision such as legal partnerships and multidisciplinary practices, which simply take account of the emergent new business models in other common law jurisdictions and the huge advances made in business technology. This is an aspect of the Bill that the European Commission is keen on seeing implemented.

It is important to note that the Bill does not seek to impose or force these new models on legal practitioners. Rather, the intention is that the new models will operate successfully alongside the existing structures of business used by legal practitioners, including small solicitors' firms and, for barristers, the Law Library.

The new models will facilitate legal practitioners by removing current restrictions on the way they deliver their services. They will facilitate consumers by providing more choice, better access and, in due course, lower costs, and will facilitate the removal of barriers to competition in the legal services market identified by the Competition Authority. These reforms have been a long time coming and, for the most part, apply in other common law jurisdictions. The Minister for Justice and Equality, Deputy Fitzgerald, introduced a number of key amendments on Report Stage in the Dáil, having listened to the concerns about these new business models. These amendments to the new business models will further enhance their regulation and governance.

Disciplinary procedures, in theory, will work in quite a straightforward fashion, and citizens will be able to submit concerns. These measures, when looked at together, are a sensible package of updates to the existing structures. We must implement much of what both the European Commission and the Competition Authority have asked to see while taking into account the concerns of the legal profession. The funding for these measures includes a budget allocation of €500,000, which will support the start-up of the new regulatory authority. This will be recoupable under the statutory levy to fund the operation of the new authority. The statutory levy seems reasonable and will not be a burden.

I welcome the Bill, as I feel it allows for modernisation of a number of aspects of our legal system. I am keen to ensure recommendations are taken on board and, where possible, a number of suggestions were. I am pleased to hear the Minister's remarks about accepting further amendments. Not everybody will be 100% happy with the Bill, but it is a reasonable compromise and one the Government can stand over.

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)
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Cuirim fáilte roimh an Aire Stáit. Táim sásta go bhfuil deis labhartha agam ar an mBille an-tábhachtach seo. Tá sé fíor-thábhachtach go mbeadh plé againn ar an ról atá ag na aturnaetha ar fad agus ar an bhforbhreithniú agus an maoirsiú a dhéantar ar an obair a dhéanann siad agus mar sin de.

Sinn Féin welcomes this legislation. We have been calling for regulation of the legal profession for some time, with the aim of bringing it into line with best practice elsewhere in the EU. Unfortunately, a number of areas of the Bill must be worked on to bring it up to standard. We welcome the establishment of an independent authority to oversee the legal profession.

The perception amongst the general public is that the legal profession is almost a law unto itself and exempt from any oversight. Public representatives dealing with people who come into their offices are aware of the large number of constituency cases concerning legal scenarios and things that went wrong. In some cases these can be small matters, but they can have devastating effects. In the case of a family in my locality, a mistake was made in not registering the transfer of a right of way, and it has caused a major split in the family, with some members of the family not talking to others. There was a botch-up by someone who did not do the job properly. The solicitor went out of business and the files were passed on, and when members of the family went back after the death of a parent and tried to sort out the right of way issue, there was a row in the family about who had right of way. It is an ongoing row and has been has not been resolved. Matters that may seem inconsequential can have devastating effects on families.

It is extremely important to have oversight. People make complaints to the Law Society, and in many cases they are not happy with the findings of the Law Society. There is a perception that the legal profession closes ranks when one of its own is accused of something. For the good of the profession and the Law Society, it is important that any oversight mechanism be independent so that there is no sense of wrongdoing not being righted and people not getting due process in the system.

There is a lack of clarity about legal expenses. Members of the House are eminently qualified legal people and they are au faitwith the system. In talking to people in the constituency in which I live, I have found that they lack knowledge about the system and the cost structure.They are unsure how long a case will take, whether it will go to court, if they will need to pay for a solicitor's letter or pay to go to court, whether to make settlement or go to mediation. This is an area about which ordinary citizens are very unclear. Clarification as to the costs of services is very important.

Sinn Féin is of the view that the move to multidisciplinary practices is not a good idea and is not in the best interests of transparency and accountability. In my opinion, we are looking at a corporatisation of legal services which will create some very big legal firms who will potentially suck up the best and the brightest in the legal profession and make it very difficult for other people to access them. Costs will become an issue and a barrier to people using those services.

I note that multidisciplinary practice was the brain child of the former Minister for Justice and Equality, Deputy Alan Shatter. I am concerned that it is still part of the Bill. I am also perplexed as to the need for such practices. Where is the demand for this type of model? My colleague, Deputy Pádraig Mac Lochlainn, has raised this issue in the Dáil and we remain to be convinced. Sinn Féin is of the view that the proposed model deviates from international best practice where solicitors operate separately from barristers. I again refer to the issue that multidisciplinary practices will attract the best and brightest of the legal profession. As highlighted previously, this could have a significant impact in rural areas and provincial towns because it will result in a centralisation of specialised legal services in Dublin so anyone living in Tipperary, Galway, Cork or Donegal will be significantly disadvantaged and they will probably be forced to come to Dublin to avail of them. This is not a satisfactory or desirable situation. It will make it more difficult for the ordinary people to engage with legal services. I urge the Minister to scrap the multidisciplinary model in the interest of best practice.

I note also the issues to do with membership of the board of the proposed authority and in particular the comments and submission by FLAC about the type of board and authority that should be established. In the opinion of FLAC, the authority should consist of two persons nominated by the Bar Council, two persons nominated by the Law Society of Ireland, two persons nominated by the deans of law or heads of all the law schools, one person to represent the independent law centres - all which are not-for-profit organisations - one person to represent FLAC, one person to represent business interests, one person to represent consumer interests, one person representing the community and voluntary sector, and one person representing the Minister. I suggest that this recommendation should be considered. It is important that FLAC would be represented on the new authority.

The Irish language must also be taken into consideration in the formation of the board. The Referendum Commission, for example, has been unable to provide a neutral spokesperson to speak on the referendum as Gaeilge. We are informed this is due to the competencies of the people on the Referendum Commission. I do not wish to cast aspersions on any member of the Referendum Commission but when a new authority for legal services is being established it is very important to ensure that people competent in the Irish language are appointed because as noted by Senator Quinn, Irish is the first language of the State and legal issues around language can arise.

There is an issue regarding the staff in the Law Society of Ireland and the Bar Council who currently deal with complaints procedures. Approximately 20 people perform these duties between the two organisations. It is important for the Minister to inform the House what will happen to those people as there may be a benefit in subsuming those people into the new authority, bringing with them significant experience of the complaints procedures. It is also the right thing to do so that they do not lose their jobs as part of this process. It would give the authority the opportunity to hit the ground running when dealing with the issues as they arise.

Sinn Féin supports the Bill but with certain reservations. We intend to table amendments on Committee Stage. Fáiltíonn muid roimh an mBille. Ceapaim go bhfuil sé thar am go mbeadh trédhearcacht agus idirdhealú déanta maidir leis an earnáil seo ar fad agus go mbeadh sé soiléir don phobal ach go háirithe céard iad na seirbhísí a fhaigheann siad agus cén chaoi is féidir leo gearán a dhéanamh nuair is gá sin a dhéanamh.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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I welcome the Minister to the House. This Bill is long overdue. It is essential that the new legal services regulatory authority is up and running as a matter of urgency. The delivery and enactment of this Bill remains the subject of a country-specific recommendation under the EU semester process which has succeeded the troika programme. I welcome the fact that the European Commission will continue to monitor this Bill's progress closely.

The Bill as amended and enhanced by the Dáil is a very comprehensive Bill of 158 sections spread over 13 Parts. It provides for the new independent legal services regulatory authority with responsibility and oversight of both solicitors and barristers. It is of paramount importance that the independence of the new authority, in both its appointment and its functions, is transparent in all respects. I welcome the clarification by the Minister regarding the composition of this body.

The independent complaints systems to deal with public complaints, including those relating to professional misconduct, is a vital part of this Bill. I have been contacted by several people who believe that they were ill-served by the current system which caused great trauma to people who believed their legitimate complaints were not dealt with in a fair and transparent way.

The legal practitioners disciplinary tribunal will replace the two separately operated tribunals which currently exist. I know that the public will now make their complaints directly to the new authority. I hope this is not another case of the legal profession policing themselves. I would welcome the Minister of State's observations in his reply to the debate. I welcome the fact that provision has been made for the informal resolution of more minor and consumer-type complaints such as those about inadequate services.

The new and enhanced legal costs requirement will hopefully bring greater transparency to legal costs and will apply to barristers as well as solicitors. The Bill sets out for the first time in legislation a set of legal costs principles. It also provides that a new office of legal costs adjudicator will replace the existing Taxing Master to deal with disputes about legal costs. It will also prepare guidelines and maintain a public register of determinations. I hope that this will speed up the process as I know that many legal practitioners have expressed frustration at the current delays in the Taxing Master's office which may be due to a lack of resources in the office but I am not certain. Whatever the case I hope that the office of the legal costs adjudicator will be adequately staffed to prevent long delays with determinations.

This Bill facilitates new forms of legal services provision such as legal partnerships and multidisciplinary practices that take account of the emergent new business models in other common law jurisdictions and the significant advances made in business technology. It does not impose new models on legal practitioners but rather the intention is that the new models will operate successfully alongside the existing modes of business used by legal practitioners, including small solicitors' firms and for barristers and the Law Library. The new models will remove current restrictions on the way they deliver their services. They will facilitate consumers by providing more choice, better access and, in due course, lower costs. It will also facilitate the removal of barriers to competition in the legal services market which were identified by the Competition Authority over nine years ago.

I welcome the Minister's amendments on Report Stage in the other House which will further enhance regulation and governance. Part 8 of the Bill refers to these matters. Besides the Competition Authority, the European Commission has long referred to the lack of competition in legal services in this country. I hope that this Bill adequately addresses this lack of competition.

This Bill deserves the utmost scrutiny as it deals with many matters which deserved attention long before now. I commend the Minister and her predecessor, the former Minister, Deputy Alan Shatter, who believe that reform of the legal services and greater transparency will remove some, if not all, the obstacles to competition in the area of legal services. I know that legal practitioners, nationwide, will await the final version of this Bill which will chart a course for them into the future. I know that the EU will be very interested in how this Bill will provide greater competition in the marketplace. Above all, I hope that this Bill will give the ordinary people of Ireland a legal service that is open, transparent and competitive and which instils more confidence in a profession which is so important in the administration of justice.

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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It is a privilege to be in the House today. I apologise on behalf of the Minister for Justice and Equality, who was unavoidably absent for some of the contributions. This legislation, which has been moving through the Houses for a long number of years, represents the fulfilment of one of the country-specific recommendations that we have inherited and that we continue to work towards. Given the importance of the Bill, it is essential that proper time be given to the issues that remain to be agreed. The Minister, Deputy Fitzgerald, is categoric in stating that many, if not all, of the issues highlighted by Senators will be given further consideration on Committee Stage. Senator Bacik pointed out that the Minister will continue to take amendments on Committee Stage. I will not dwell in great detail on all the points raised, but I assure Senators that the Minister has assured me that the required time will be given.

As Senator Noone said, this Bill will touch all facets of Irish life, whether urban or rural. I refer to a specific point with regard to costs, efficiencies and savings. I am informed that there is limited data in that regard, but it will be forwarded to Senators. On the broader question of e-filing, the Minister is currently considering amendments for Committee Stage. With regard to the request for data, I am unsure if absolute cost-benefit analysis has been conducted, but any information will be provided and the matter may be raised on Committee Stage.

The Bill is now much advanced and enhanced, including in response to key observations and concerns that had been expressed since its publication in autumn 2011. The new provisions contained in the Bill enhance the current regulatory regime in relation to the provision of legal services in the State and in how legal costs are determined. This is all predicated on what is to be a robustly independent legal services regulatory authority and on the functioning of an independent legal practitioner disciplinary tribunal.

Alongside the changes that have been made to the Bill to date, we have also experienced change in the national economy, which is now experiencing very positive growth. The challenge for all sectors is to maintain and nurture that growth in a prudent fashion. The Bill is a charter for managed and regulated change. It provides the legal services sector with a vehicle to capture the benefits of our current economic growth in new and lasting ways. The Bill maintains and upholds the independence and professional principles of both arms of the legal profession in this jurisdiction while balancing this with the wider interests of their clients and of a sustainable and competitive economy.

The Bill now includes a series of new provisions to make prudential provision for the future participation of solicitors and barristers in a number of new legal business models. These include legal partnerships between solicitors and barristers or between barristers themselves. They also include multidisciplinary practices, under which legal practitioners, be they barristers or solicitors, may choose to provide their services in tandem with non-legal service providers. This will be informed by the relevant research and public consultation processes. These new legal business models are not being introduced at the expense of all that is good about the legal services sector. Rather, alongside existing practice models, the Bill will facilitate innovative lawyers who wish to branch out in new ways and into new client areas. This should provide new opportunities for employment and specialisation for qualified legal practitioners and any non-legal service providers concerned. Under this mutually accommodating and regulated framework, the Government considers that there should be no impediments to the effective participation in, and delivery of, these new legal business models.

Ultimately, it is the market and consumers who will decide the success of any of these new legal business options. In the meantime, there will be unprecedented choice for legal practitioner and client alike. This has to be an improvement on the existing situation of very limited choice, or in some respects no choice at all, in relation to how legal services may be accessed. For the consumer, this Bill provides unprecedented transparency in relation to how and why legal costs may be charged. Senator Bacik focused on the aspects of transparency, including with regard to costs. The application and determination of legal costs, including by the new legal costs adjudicator, who will replace the existing Taxing Master, will now be much more open. Senator Noone also had concerns and observations in that regard. Up to now, legal costs matters were obscured in arcane rules and in the annals of jurisprudence. These were largely invisible to clients and even to lawyers. For the first time in legislation, the relevant legal costs principles are now laid out in Schedule 1 of the Bill.

This is a very balanced Bill. The Minister is delighted to have an opportunity to further discuss its provisions in the Seanad. It only remains for me to ensure that what is being done under the Bill is done correctly. It remains the Government’s intention that the Bill will be completed so that the new legal services regulatory authority can become operational without delay this year. Detailed work on the Bill continues on that basis, including in conjunction with the Office of the Attorney General and the Office of the Parliamentary Counsel, whose ongoing and key inputs are very much appreciated.

We look forward to discussing the Bill and its various provisions with stakeholders and with Members of this House over the coming period. In this way we can deliver the key modernisation and structural reforms being facilitated by this important piece of legislation. I thank Senators for their contributions.

Question put and agreed to.

Committee Stage ordered for Tuesday, 26 May 2015.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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I propose the suspension of the sitting until 5.30 p.m.

Photo of Paddy BurkePaddy Burke (Cathaoirleach of Seanad; Fine Gael)
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Is that agreed? Agreed.

Sitting suspended at 4.55 p.m. and resumed at 5.30 p.m.