Boomtime pay for lawyers hikes up insurance
The high cost of legal services is being linked directly to rising insurance premium bills, according to a government economic advisory body.
The National Competitiveness Council says legal costs have remained stubbornly high despite the collapse of the Celtic Tiger.
In a confidential report, the Council said prices for legal services failed to decrease significantly, despite the impact of the recession, and had now risen to their highest level in six years.
Insurers claim higher-than-expected damages awards and legal costs are among the factors fuelling the 30pc rise in car insurance in the past year.
The NCC's comments were made in a briefing report on rising premiums for Jobs Minister Richard Bruton, obtained by the Irish Independent.
"Throughout the recession, and relative to other professions, prices for legal services in Ireland proved extremely sticky and did not adjust downward to the degree that might have been expected, given economic circumstances," the report said.
CSO data published in a separate council bulletin suggest that legal costs in the third quarter of last year were on a par with those seen just before the crash in 2008.
Mr Bruton is seeking to cut back on the level of insurance claim cases ending up in the courts. He has met with the President of the High Court, Mr Justice Peter Kelly, in an effort to get judicial support for new compensation guidelines, known as the 'book of quantum', which is due this summer.
But the claims have sparked a furious row, with the Law Society disputing the accuracy of figures cited by the council and insisting legal fees have been significantly impacted in recent years. The Society says "legal fees are not driving up insurance costs".