Sunday 25 September 2016

Bill to regulate legal services is a Christmas turkey

Despite 100 new amendments to the Legal Services Regulatory Bill, it still fails to tackle legal costs

Published 22/11/2015 | 02:30

The Government has come in for scathing criticism in some quarters for not assuming control of the Law Society's €80m Compensation Fund, paid for by solicitors through an annual levy
The Government has come in for scathing criticism in some quarters for not assuming control of the Law Society's €80m Compensation Fund, paid for by solicitors through an annual levy

It has been billed as the most spectacular heist in the lifetime of this Dail - how the Government capitulated to the legal profession. It's a convenient, if partially true, narrative. However, it is also a lazy one that lets the Government, the largest purchaser of legal services in the State, off the hook for failing to ensure affordable access to justice.

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Last week, Justice Minister Frances Fitzgerald unveiled 100 new amendments to the Legal Services Regulation Bill. The bill, like many before it, will be guillotined like the proverbial Christmas turkey. The legal services bill was first introduced four years ago by former justice minister and family law solicitor Alan Shatter, whose relationship with the legal profession was - like many a contested divorce - somewhat acrimonious to say the least.

Mr Shatter, who led two referendum campaigns to reduce judges' pay (which worked) and to curb judicial independence (which didn't), introduced his mammoth bill with the crusading zeal of a poacher turned gamekeeper, and the pent up energy of an eager schoolboy waiting for a lifetime to become a government minister.

That was the good part.

But he also approached the bill with a degree of naiveté about the scale of what was to be achieved, and an initial degree of intransigence that did not bode well for much needed reform of the sector - or the protection of the public interest.

The independence of the new Legal Services Regulatory Authority (the first major skirmish) was a case in point.

The legislation initially provoked international protest over concerns the new body would be subject to government control. To his credit, Mr Shatter swiftly amended sections of the bill that would have led to near complete ministerial control over a body whose independence is required in the public interest. Then, the hard work and long, drawn out compromises commenced.

There is no doubt that there have been some major wins for the public, including a new Legal Services Regulatory Authority (LSRA) that will, for the first time, regulate the legal profession.

All complaints about solicitors and barristers will be dealt with by the authority and, if necessary, by a new Legal Practitioners Disciplinary Tribunal (LPDT).

The Government has come in for scathing criticism in some quarters for not assuming control of the Law Society's €80m Compensation Fund, paid for by solicitors through an annual levy.

The Law Society will retain the right to oversee how solicitors deal with clients' funds, albeit with the oversight of the authority.

Is this better than transferring these financial risks directly to taxpayers? The Cabinet clearly thinks it is.

One of the most controversial aspects of the bill was the planned introduction of multidisciplinary partnerships. MDPs, one stop shops that allow lawyers to form partnerships with other professionals such as auctioneers or accountants, are banned, or severely restricted, in many European countries because of concerns about independence and how they are regulated.

As far back as 2006, the Competition Authority recommended research into the pros and cons of MDPs. Now, the first task of the new authority is to undertake precisely that research. MDPs may not even be suitable here - Ms Fitzgerald has conceded as much - so why was so much precious time and energy squandered on them?

Every time the Troika came to town, it complained - rightly - about the Government's repeated failure to reform the legal sector and reduce legal costs. Delays were blamed on lobbying by the legal profession, but this, too, is only partly true.

The reality is that this bill, like that other key pillar of Mr Shatter's tenure - the long-awaited, endlessly revised Personal Insolvency Act - floored the already overstretched capacity of draughtsmen in the Office of the Attorney General.

The bulk of amendments to the bill, including the agreement on the Compensation Fund, were, in fact, agreed three years ago. But such was the scale of the bill, with its knock-on effects on so many other pieces of legislation, it has required 235 amendments (and counting) to date.

It is not fit to be passed. And yet, it will be guillotined with so many loose ends and key reforms, such as MDPs, left to the next Dail.

On the big issue, legal costs, the potential impact of the bill and the introduction of a new Legal Costs Regulator is dubious at best. The failure to tackle legal costs is the real heist.

In half of all cases before our courts, the Government is either a plaintiff or defendant. It is, therefore, the single biggest entity that can control legal costs - but doesn't tell us what these are or what it is doing to reduce them.

The schemes that we have the most transparency around, including the paltry civil and criminal legal aid schemes and the operation of the Office of the DPP, are the ones that cost the exchequer the least.

Whilst not quite the white elephant that the Personal Insolvency Act was, the legal services bill has been a lost opportunity in so many respects. Maybe the lawyers did 'win', but if they did, they were aided and abetted by the State - and we're the losers.

Sunday Independent

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