Written answers

Thursday, 26 March 2015

Department of Justice and Equality

Legal Services Regulation

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

166. To ask the Minister for Justice and Equality the action she is taking to deal with the very high cost of enforcing business contracts as measured by the World Bank, Doing Business Survey 2014; and if she will make a statement on the matter. [12640/15]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

167. To ask the Minister for Justice and Equality her views on the divergence in the cost of legal services, compared to accountancy services since 2008, which have seen the cost of legal services increase over this period; and if she will make a statement on the matter. [12641/15]

Photo of Frances FitzgeraldFrances Fitzgerald (Dublin Mid West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 166 and 167 together.

The Legal Services Regulation Bill 2011, which is to resume Report Stage in the Dáil on 21stApril, 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". Having been a sectoral objective under the EU/IMF/ECB Troika Programme, the Bill is now the subject of a Country Specific Recommendation under the EU Semester Process as well as being an objective of the Action Plan for Jobs,the Medium Term Economic Strategy 2014-2020 and the National Reform Plan. The Legal Services Regulation Bill is, therefore, a key component of the Government's strategy to bring greater transparency to legal costs and to reduce their burden on consumers and enterprise - including by reference to the competitiveness indicators raised by the Deputy which would appear to be those also cited by the National Competitiveness Council in its "Costs of Doing Business in Ireland 2014" report.

While the fees of the discrete group of 18 solicitors firms covered by the annual CSO survey (it does not cover barristers' services) concerned had remained relatively constant during the recent recession compared to those of accountants, they had demonstrated a reduction late in 2013. I understand that subsequent updates of this CSO survey to the third quarter of 2014 have confirmed the reduction in solicitors' fees among this group as an ongoing competitive trend. In relation to the longer time and higher cost involved in enforcing a business contract in Ireland as highlighted by the World Bank, I would anticipate that this will be ameliorated by the more transparent legal costs regime being introduced under the Legal Services Regulation Bill in tandem with the use of more efficient and timely enforcement and alternative dispute resolution approaches.

As a targeted structural reform, the Legal Services Regulation Bill is given continued validation by the concern also expressed in National Competitiveness Council's report that "looking to the future, further structural or policy induced changes are necessary to ensure that prices do not escalate and erode competitiveness as the Irish economy returns to stronger rates of growth". 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 by legal practitioners, along with a better balance between the interests of legal practitioners and those of their clients. Legal practitioners, whether solicitors or barristers, 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 117 of the Bill, disclose the costs that are involved, or, where this is not reasonably 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. 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.

An aggrieved client also has the option of applying for the taxation of disputed legal costs by the Office of the Taxing-Master. 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. 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 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, 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. These combined measures will enable those availing of legal services, be they private consumers or enterprise, to identify costs more clearly, including in competition with other possible legal service providers.

Comments

No comments

Log in or join to post a public comment.