Clare Daly (Dublin Fingal, Independent)
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340. To ask the Tánaiste and Minister for Justice and Equality further to Parliamentary Question No. 404 of 13 July 2017, if his attention has been drawn to the fact that the position of the Legal Services Regulatory Authority in regard to the recoupment of public moneys extended to it to date is that these funds are non-recoupable (details supplied); if the position in regard to whether these moneys will be recouped by the State will be clarified; and if so, when. [31036/18]

Charles Flanagan (Laois, Fine Gael)
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The matters raised by the Deputy are among those that are being dealt with by officials of my Department in conjunction with their counterparts at the Legal Services Regulatory Authority in supporting the continuing roll-out of the Authority's functions under the Legal Services Regulation Act 2015. They are also matters on which I can assure the Deputy both my Department and the Authority are in ongoing discussion with the Department of Public Expenditure and Reform.

As had been reflected in my Written Reply to Question No. 404 of 13 July 2017, the Authority has been supported in this endeavour by an advance of €1 million during each of the years 2016 and 2017 from my Department's Vote and a similar allocation of €1 million has been made for the current year. These advances are being made, as provided under section 32 of the 2015 Act, with the consent of the Minister for Public Expenditure and Reform for the purposes of expenditure by the Authority in the performance of its functions. As also reflected in that Written Reply and since set out in more detail in the Authority's published Annual Report for 2017, the Authority spent its first year completing a series of statutory and time-bound reports and public consultations while also establishing a start-up office and recruiting its first full-time Chief Executive who was appointed in November 2017.

As part of the roll-out of the 2015 Act, a number of legal and technical issues have arisen in relation to the practical application of the funding framework that the Act provides. These provisions were intended, from a policy perspective, to provide the means whereby the Authority, having been funded for an initial and short start-up period on a recoupable basis, could then become self-funding in the longer term. This would be achieved by means of a levy based on actual expenditure by the Authority in the immediately preceding financial year and raised from those legal practitioners being regulated in the terms currently set out in Part 7 of the 2015 Act. The fact that the effective roll-out of the Authority's remaining functions will require substantially more time than initially considered and that the levy also needs time to generate actual income have revealed a potential gap in the original model of recoupability that now needs to be reconsidered and resolved. This is made more complex because the levy is also intrinsically linked, in its application, to a number of other measures including the current work of the Authority in setting-up the Roll of Practising Barristers in support of which I recently commenced the necessary provisions of Part 9 of the 2015 Act.

My Department has, therefore, acknowledged the Authority's position, which it has reflected in its risk register, that the levy provisions as drafted in the 2015 Act may not, in their practical implementation and in the transpiring circumstances of the start-up, provide an adequate source of funding to the Authority and may not similarly provide for the recoupability of advances as may originally have been foreseen. My Department has also been informed by the Authority that it has engaged a financial consultant to examine the current levy provisions and to provide an expert economic/financial opinion on them. This is expected to be provided soon and will be given early and detailed consideration by my Department and the Authority in conjunction with the Department of Public Expenditure and Reform who are, as I have said, aware of the issues concerned. Both my Department and the Authority are committed, on that basis, to the prompt and robust analysis and examination of the funding provisions within the 2015 Act to ensure that there is a sustainable levy-based framework under which the Authority is sufficiently funded going forward to fulfil its broad remit as a new regulatory body. We also wish to ensure that there is no setback to the progress it has made to date and to the important programme of reform it has undertaken under its Strategic Plan for 2018-2020. Along with the relevant officials of my Department I will, therefore, be giving detailed consideration to any necessary measures proposed including legislative amendments or refinements, if any, that may be considered appropriate.