Thursday 14 December 2017

Legal reform bill to ban lawyers from taking cut of court awards

Dearbhail McDonald Legal Editor

LAWYERS will be banned from taking a percentage cut of their clients' compensation awards or the sale of their family home to pay their legal fees under radical plans to overhaul the "sheltered" legal sector.

Under the draft Legal Services Bill, which has been obtained by the Irish Independent, a new Legal Costs Regulator will be established to help drive down legal costs and make legal fees more transparent for consumers.

In the past, some lawyers based their fees on the size of their clients' awards and their other assets. But this practice, and the practice of charging fixed fees for services such as conveyancing will be banned.

In the future, lawyers will have to abide by billing principles fixed by the regulator to ensure clients' fees are fully accounted for.

People who suspect they have been overcharged will also be able to appeal their legal bill to an independent adjudicator.

Barristers and solicitors are regulated at present by the Bar Council and Law Society respectively, the representative bodies for lawyers. But under Justice Minister Alan Shatter's plan they will be stripped of any right to regulate their colleagues.

Instead, a new Legal Services Regulatory Authority will come into force with complete control over regulation of the legal profession.

The model of the new authority being introduced by Mr Shatter has led to disagreement at Cabinet because of far-reaching powers it will give the justice minister.

This includes the power to appoint, subject to government approval, the chairperson and members of the new regulatory body.

Critics of the draft bill say that the authority, which will be funded by levies imposed on the legal profession and is estimated to cost €5m a year to run, would be directly answerable to the minister.

Such is the level of scrutiny of the Legal Services Bill, the biggest change to the legal sector in modern times, that it will not go to Cabinet on Tuesday as it is being subjected to a major review by Cabinet members.

Controversially, lawyers will be allowed to form partnerships with other professionals such as accountants.

The distinction between senior and junior counsel will be retained for now and the split in the profession -- that of solicitors and barristers -- will also be maintained.


However, the Government will give itself the right to strip senior counsel of their title if they are bankrupt or if they have to make arrangements with creditors because they have too much debt.

This provision would cause difficulty for many indebted senior counsels who have already had to enter into arrangements with their creditors because of property-related debts and a fall in income.

Under the joint EU/IMF/ECB deal, the Government was required to produce a bill by this month which implemented the outstanding recommendations of the Competition Authority 2006 Report and the establishment of a regulatory body for the legal professions.

But the bill goes beyond those requirements and rejects the Competition Authority's recommendation for regulation of the legal sector.

The Competition Authority had recommended an independent regulator to oversee existing regulation of solicitors.

But Mr Shatter's bill would see all powers of inspection and sanctions handed over to the new regulator.

Irish Independent

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