Friday 9 December 2016

Minister just an obedient poodle as solicitors prove a law unto themselves

Litigants will continue to suffer grave injustice while Law Society laughs all the way to the bank, writes Charles Lysaght

Published 29/11/2015 | 02:30

The Minister for Justice, Frances Fitzgerald, has been criticised by many, including her ungracious predecessor Alan Shatter, for caving into the legal profession and accepting amendments to the Legal Services Regulation Bill for which it lobbied. In fact, the bill was flawed from the beginning because it failed to amend provisions in the existing law that enable solicitors to overcharge their own clients.

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The protection offered to clients by the existence of competition between solicitors and by the right of clients to appeal to an officer of the court to assess fees remains sadly inadequate.

Competition is effective to protect consumers only if they are in a position to ascertain in advance which supplier of a service offers best value in quality of product and in price. The law requires a solicitor to quote a fee in advance where this is practicable. But the courts decided solicitors failing to comply with this law should suffer no penalty. They may still recover whatever fees they nominate subject to the right of the client to appeal to an officer of the court.

In areas such as litigation, where the amount of work involved can seldom be anticipated with certainty at the time a solicitor is first engaged, the prospective client is not entitled to be quoted a definite figure to compare with what is on offer from other solicitors.

The only entitlement of the client is to be informed of the criteria according to which the solicitor's fee will be determined. This criteria is inevitably wrapped up in such vague verbiage or is so imprecise they allow considerable latitude to the solicitor when it comes to naming a fee. The protection offered to the client when presented with a bill is a right to refer it to an officer of the court who decides if the amount charged exceeds the going rate.

In this process, the odds are stacked against the client. There are short time limits within which the application must be submitted. To dispute a bill effectively, a legal costs accountant must be employed; that does not come cheap. Unless the bill is reduced by at least 15pc, the client is liable also to pay the court fees and the costs incurred by the solicitor defending the bill.

This is indefensible and has the effect that few clients refer the charges of their solicitors to such adjudication. In all justice, a solicitor who does not quote a precise fee to a prospective client should bear the cost of adjudication whenever the fee charged is judged to be too high and perhaps in other cases as well. An amendment moved by competition economist Senator Sean Barrett at the committee stage in the Seanad to bring this about was brushed aside by Minister Fitzgerald.

The minister and her predecessor have made portentous statements about more transparency in the process of adjudicating costs. There is certainly some elaborate window-dressing in the bill, such as renaming the Taxing Master as Chief Adjudicating Officer. But closer examination reveals the narrow limits of any transparency. Reasons do not have to be given for determinations in all cases, commercially sensitive information may be withheld and the public may be excluded from oral hearings, all without the consent of the client.

Our system protects lawyers who overcharge and, by doing so, inflates the going rate for legal fees. It bears most harshly on once-off litigants, who predominate in family law and personal injury cases. They lack the muscle of repeat business clients who may move their custom to another solicitor if they are overcharged or under-served.

The Legal Services Regulation Bill also reduces competition between lawyers by prohibiting fees expressed as a percentage of the amount recovered in litigation. Such percentage fees are permitted in other common law countries. They may afford prospective clients a basis for comparing the fees of different lawyers and so make the market more competitive.

Litigants are deterred not only by the fees their own lawyers charge, but even more so by the prospect that if they lose, they will have to meet their opponent's costs. The bill does nothing to discourage litigants with deep pockets from running litigation expensively and saddling their opponent with their high fees and outsize costs, even if that opponent has conducted a case more economically.

The Legal Services Regulation Bill, which has dealt the Bar a few blows, is a triumph for the solicitors' Law Society with its slick PR machine, among whose antics is the award of prizes to legal journalists who are their most feared critics and the provision of briefings for members of the Oireachtas grateful to have their work done for them.

Not alone are solicitors' earnings protected but they are also to be allowed to limit their liability for negligence for the first time. The proposal for multi-disciplinary firms is long-fingered to be considered by the new so-called independent regulatory authority, almost half of whose members will be lawyers.

Proposals that banks or other entrepreneurs should be allowed to employ lawyers to provide legal services to the public were stymied at birth. Solicitors have retained the right to exercise the line condemned by the Competition Authority that allows them to retain a client's papers until they are paid fully - this inhibits dissatisfied clients seeking to switch solicitors. More justifiably, solicitor advocates may now become senior counsel.

If any solicitors from the backwoods are impudent enough to question the handsome remuneration of the Law Society Director-General Ken Murphy, who has master-minded their campaign, they can be told he has proved himself well worthy of his hire by making the Minister for Justice his obedient poodle.

Charles Lysaght, who lectured on competition law at London University, is the author of a study of the Competition Authority Report on Solicitors and Barristers (2006), which preceded the introduction of the Legal Services Regulation Bill.

Sunday Independent

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