Lawyers 'were sheltered from the economic storm'
Published 12/04/2016 | 02:30
During the bad old days when the Troika was in town, it referred to legal and medical services as the "sheltered part of the economy".
European Commission official Istvan Szekely in particular was perplexed by our high legal costs.
He said these caused direct harm to the economy and that the legal profession and its costs needed to be brought "into the 21st century".
An analysis by the National Competitiveness Council for Jobs Minister Richard Bruton backs up the impression that the legal services were sheltered during the recession.
It says legal fees proved "extremely sticky", failing to reduce to the extent that might have been expected during an economic crash, and were now on the increase.
It remains to be seen what impact the Legal Services Regulation Act passed last December will have on legal fees. Justice Minister Frances Fitzgerald has promised it will improve transparency, ensure there are adequate complaints procedures and help reduce delays and legal costs.
Although parts of the bill were altered following lobbying from the legal profession, the Law Society has insisted sections relating to legal costs remained almost completely unchanged.
But it is clear the Government's advisory body on competitiveness believes something has to give. It says high legal costs have significant knock-on effects on other vital business services, such as the cost of insurance.
In a recent bulletin, it cited World Bank 'Doing Business' data that showed Ireland remains an expensive location in which to enforce a business contract, ranking eighth highest out of 32 OECD countries.
It wants the competition-enhancing provisions of the Act to be incorporated into regulations to be issued by the new Legal Services Regulatory Authority as soon as possible.