Paschal Donohoe (Dublin Central, Fine Gael)
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To ask the Minister for Justice and Equality if he will outline the measures to date, throughout the past 18 months, by the State to reduce costs in the legal practitioner sector of our economy in response to our economic difficulties; and if he will make a statement on the matter. [54675/12]

Alan Shatter (Dublin South, Fine Gael)
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The Legal Services Regulation Bill 2011, which completed Second Stage in the Dáil on 23 February and is due to commence Committee Stage early in the new year, gives legislative expression to the commitment in the Programme for Government to "establish independent regulation of the legal professions to improve access and competition, make legal costs more transparent and ensure adequate procedures for addressing consumer complaints".Furthermore, as a sectoral objective under the EU/IMF/ECB Troika Memorandum of Understanding, it supports the objectives of structural reform, national competitiveness and early economic recovery, building on the relevant recommendations of the Legal Costs Working Group and the Competition Authority. Indeed, the new business models and technologies for the provision of legal services, that are already being rolled out across other common law jurisdictions similar to our own, pose additional competitiveness challenges to those relating solely to cost.

The Legal Services Regulation Bill addresses these challenges on both fronts and provides the means to help ensure that our legal services sector will not be left to languish at a competitive disadvantage and will continue to thrive on the high reputation it enjoys internationally. The Bill is, therefore, a key component of the Government's strategy to reduce legal costs in this country by way of increasing our competitiveness, both nationally and sectorally, and I will address other aspects of this strategy later in this reply.

The Legal Services Regulation 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. The Bill sets out, for the first time in legislation, a series of Legal Costs Principles. These are contained in Schedule One and enumerate the various matters that may be taken into account if disputed costs are submitted for adjudication. For the first time, these cost transparency measures will apply to barristers as well as to solicitors.

Under the Bill it will no longer be permissible to set fees as a specified percentage or proportion of damages payable to a client from contentious business. It will no longer be permissible to charge Junior Counsel fees as a specified percentage or proportion of Senior Counsel fees. Legal practitioners will be obliged to provide more detailed information about legal costs from the outset of their dealings with clients. This will be in the form of a Notice written in clear language which must be provided when a legal practitioner takes instructions. Among other things, the Notice must, as set out in Section 90 of the Bill, disclose the costs that are involved, or, where this is not practicable, the basis upon which such costs are to be calculated. 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 or not to proceed with the case in question.

The Bill also provides that a new Office of the Legal Costs Adjudicator will 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. Two new Taxing-Masters have been appointed by public competition under the enhanced qualification criteria of Part 14 of the Civil Law (Miscellaneous Provisions) Act 2011 to prepare the way for these modernisation measures.

As the Deputy will be aware, the Oireachtas Committee for Public Accounts continues to highlight and address the unsustainable burden of legal costs that had previously been carried by the State. At the same time, a concerted drive to reduce expenditure and increase efficiency across all government Departments, is being led by my colleague, Minister Brendan Howlin, at the Department of Public Expenditure and Reform. The Government has undertaken a comprehensive review of public spending on legal services, and the manner in which public bodies procure those services. This active review covers both direct employment of solicitors, engaging solicitors or barristers for particular cases and other related items of expenditure that arise from time to time.

The Minister for Public Expenditure and Reform recently outlined to the Dáil actions that have already been taken to address the issue of legal fees incurred by the State, a number of them having been taken by my Department. Among these are:

- an 8% reduction to all legal fees with effect from 1 March 2009 applied to legal counsel fees in the Chief State Solicitor’s Office; Brief and Refresher fees in the Director of Public Prosecution’s Office; Payment of Witness Expenses; State Solicitors fees (this came into effect on 5th May 2009); Criminal and Civil Legal Aid fees including barrister, private practitioner, medical and legal fees; and Tribunal fees,

- on foot of budget 2010, a further 8% reduction with effect from 1 January 2010 applied to legal counsel fees in the Chief State Solicitor’s Office; Brief and Refresher fees in the Director of Public Prosecution’s Office; and Criminal and Civil Legal Aid fees,

- a fee reduction of 10% on Criminal Legal Aid fees was applied with effect from 13 July 2011 and 1 October 2011 for District, and Circuit and Higher Courts, respectively,

- a reduction of 50% in the rate paid in respect of travel and subsistence and a reduction of 50% in the rate paid for sentence fees in respect of adjourned sentence hearings in the Circuit and higher courts was applied,

- in October 2011, a further 10% reduction was applied to brief and refresher fees paid by the Director of Public Prosecutions Office to reduce the level of fees in parallel with the reductions applied to fees payable under the Criminal Legal Aid Scheme, and

- a further 10% reduction was applied to Tribunal fees on 1 March 2012.

In August of this year, the Legal Aid Board withdrew from an agreement with the Bar Council on Civil Legal Aid fees and adopted new arrangements for the retention of counsel. The new arrangements will have the effect, over time, of significantly reducing fees payable to barristers. In relation to procurement policy, the Department of Public Expenditure and Reform, following consultations with the Attorney General’s Office, will issue a circular underlining the importance of competitive tendering for such services to all public bodies. In addition, the National Procurement Service set up a working group on legal services earlier this year to examine ways to assist public bodies that procure legal services and to examine how resources can be leveraged to achieve best value for money. The Working Group consists of representatives from the National Procurement Service, the Department of Public Expenditure and Reform, my Department, the Chief State Solicitor’s Office and the Office of the Attorney General.

Through the extensive legal costs transparency provisions contained in the Legal Services Regulation Bill 2011 and the comprehensive review of public spending on legal services across Departments and State bodies already underway in the Department of Expenditure and Reform, this Government is providing an unprecedented opportunity to achieve greater transparency and competitiveness in relation to legal costs. I am confident that this concerted approach will be of lasting benefit, not just to consumers and legal practitioners, but also to early economic recovery and the long-term prosperity of the State.