While Portugal and Iceland garner headlines for their international financial woes, Ireland is getting on with implementing the terms of last November’s EU IMF Programme of Financial Support for Ireland. For readers of this blog, one very important element of that programme requires the removal of restrictions to competition in sheltered sectors, such as the legal and medical professions. In particular, the Programme recommends the implementation of the 2005 Report (pdf) of the Legal Costs Working Group and of the Competition Authority‘s 2006 Reports on regulated professions, including their Report on the Legal Professions. Unsurprisingly, the Bar Council professed itself unhappy with the IMF proposals; but, in my view, the implementation of these recommendations can change the Irish legal system for the better.

In January of this year, the Public Accounts Committee published their Third Interim Report on the Procurement of Legal Services by Public Bodies (pdf). Starting from the premise that public bodies procure huge amounts of legal services every year, the Report concluded that the ability to get value for money is restricted by the practices of the legal profession. Indeed, the Committee was very concerned that the two Reports mentioned above had not been implemented:

The Committee notes the restrictive practices that are keeping legal fees artificially high. As public bodies are the largest procurer of legal services, it behoves the State to bring in reforms that will eliminate restrictive practices and bring in more competition in this market. The Competition Authority has provided a blueprint which will facilitate change and it is the Committee’s view that this should now be implemented. [p38]

In this respect, it recommended:

1. Competitive tendering should be made mandatory for the procurement of solicitors’ and barristers’ services by the State, so that a greater number of legal service providers have the opportunity to compete for work. This will lead to better service and better value for money for all State and public bodies. …

3. The taxation of costs system should be overhauled or replaced so that legal professionals and consumers of legal services have available to them clear guidance on current market rates for such services. …

6. Restrictive customs and practices in the two legal professions which lead to higher legal fees should be challenged and removed and should not tolerated any longer by the State. [p40]

It now looks as if all of these recommendations are about to be implemented. Writing in the Irish Times last Friday, Barry O’Halloran and Deaglán de Breádún report that the government intends to introduce new measures to shake up the legal and medical professions within three months:

Under the terms of the €67.5 billion EU-IMF bailout deal, the State is committed to boosting competition in sheltered sectors such as the legal profession, medicine and pharmacies by banning various restrictive practices. … The measures will include establishing an independent regulator for the legal profession and implementing recommendations made by the previous government’s legal costs working group and the Competition Authority.

From the point of view of legal education, the most important recommendation is the introduction of a Legal Services Commission, to act as an independent regulator for the legal professions, to set standards for the training of solicitors and barristers, and to approve and licence institutions that wish to provide such training. The EU IMF Programme requires that this should be completed by the end of the third quarter of this year. We may not meet that timetable, but I’m delighted that things are moving, and I look forward to the Government’s recommendations.