Business Irish

Tuesday 20 February 2018

Lawyers have won battle over fees after facing down the Government

Members of the Troika pictured leaving the Department of Finance with other officials from the Troika on one of their final visits to Dublin
Members of the Troika pictured leaving the Department of Finance with other officials from the Troika on one of their final visits to Dublin
Colm Kelpie

Colm Kelpie

Lawyers get paid for winning cases, so perhaps it should be reassuring that they win when they are fighting for that most important right; the right to fleece the public.

M'learned friends have largely faced down the Government's attempts to reform the sector, and they've weathered the repeated criticism of the Troika. Now it seems that after years of pushing for reform of the legal sector and calling for costs to be slashed, the European Commission has realised that it is fighting a losing battle.

Legal costs have long been a bone of contention for the Troika of the International Monetary Fund, European Commission and European Central Bank.

It has talked about how high legal costs have weighed on businesses and households, and bemoaned delays to the Legal Services Bill, introduced in 2011 and yet to be enacted.

Progress report after progress report during the bailout years repeatedly flagged the issue. As the bailout programme drew to a close, Troika officials were highly critical and frustrated at the glacial pace of reform in key sectors.

A particular gripe was the failure to bring proper financial management structures to the health sector and other 'sheltered' sectors of the economy such as the legal profession.

In its so-called country specific recommendations for Ireland last year, the commission called for legal costs to be slashed. This year, that recommendation was conspicuously absent.

Instead, the commission noted in its preamble to the recommendations that costs remain high and signalled that they could dent competitiveness, adding that it would monitor progress in this area.

Sources in Brussels are keen to point out that its concern has not waned.

They say the absence of the recommendation in the report reflects the drive from new commission president Jean-Claude Juncker for a more streamlined approach to the country specific recommendations, with the focus simply on big ticket items that could hinder the country's economy.

But one can't help thinking that the legal profession has faced down the commission, and the Government.

What is equally depressing about yesterday's document is that Brussels is warning we could be on the cusp of repeating the mistakes that have cost us so dearly.

What's different now from the boom years is that stricter rules to prevent policies that would cause an economy to overheat are in place. But in the wake of the Spring Statement and promises of tax cuts, Brussels is warning that we are at risk of non-compliance. The positive now compared with the boom years is that the warning bells have been tuned, if we choose to listen.

Irish Independent

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