At a recent local IFA meeting farmers spoke of a layer of new charges being imposed on farmers taking out bank loans. In the past, most farmers taking out loans simply deposited the Title Deeds of some or all of their property with the bank as security for the loans.
Since last year Title Deeds have almost been rendered redundant as the Land Registry Office moved to an internet-based, digitised regime. Your digitised land parcels on your land folio are part of this new system.
This is all fine and dandy for the Land Registry Office but the downgrading of title deeds has resulted in banks now demanding fixed mortgages as security for lending to farmers. In the recent past it was accepted that a single solicitor could process the mortgage for both bank and client. Not any more. Now the Law Society insists that two solicitors must be used and the borrowing farmer pays for both. (The imposition of the extra cost arises because rogue solicitors abused the system by raising multiple mortgages on the same property.)
At the IFA meeting farmers spoke of this double solicitor process adding an extra €3,000 to the cost of taking out a loan. And if a farmer wants to transfer his loan to another bank the mortgaging process has to be repeated with the new bank, the meeting was told. This extra load of cost and red tape isn't doing much for increased competitiveness where a farmer needs extra cash to grow his or her business.
The 2009 Conveyance Act which devalued the title deeds, also made a crucial change on rights of way. Traditional rights of way will lapse at the end of 2012 unless farmers take steps to get them registered. However, the annoucement by Minister for Justice, Alan Shatter, seems to have dealt with this issue.
The fees for the above type of transactions are bad enough but they are dwarfed when the barristers are called in. Recently RTE covered the issue of legal costs. Examples of barristers' fees included a case of an estate which went to probate valued at €820,000. The will was challenged by a third party -- it never actually went into court but the legal bill was €370,000. In that case the barristers charged a brief fee of €42,000 per senior council and €28,000 for a junior. Two months later they gave another bill for nearly €10,000 for entering pleadings. Less than a week later they charged a consultation bill for €1,500 and then on the same day they charged a refresher fee of €4,000 and €2,720 plus vat. In another case quoted on the radio a man was told in writing his divorce would cost between €10,000 and €15,000 but when it came to paying he was billed almost €130,000.
Such obscene fees are hard to comprehend. Overnight they could wipe out the value of a farm itself, let alone the savings. The issue is not confined to the clients using their services, the bills from the spate of tribunals are being carried by every taxpayer.
Similarly with the huge fees being demanded by the medical fraternity. They too are hitting us all even if we have the good fortune to avoid illness. This year the VHI jacked up its fees by as much as 45pc. A big part of the VHI outlay goes on the exorbitant fees being charged by medics. Similarly, farmers now have a major issue on the Fair Deal Scheme for nursing home fees. Again it is the high medical costs that trigger this overall problem.
On top of the high fees the public has to bear with the restrictive practices of the profession. To get to a barrister we must first hire the solicitor. Similarly, local doctors deliver a stream of clients to the consultants and there is no way round this practice.
How do the professionals justify their fees? They talk about the cost of professional indemnity insurance but is that too a racket? Have they no conscience or are they not aware of the crisis in our economy? Are they even on the same planet as the rest of us?
There are reports that many of the high earners including medical consultants, solicitors, barristers, and even judges, took a major punt on property during the Celtic Tiger boom and that we are all paying for this gamble through their excessive fees.
The Government has promised to address the issue of high fees and restrictive practices. If our economy is ever to recover, Government action cannot happen fast enough.