Category: Legal Services Regulation

Mrs Lawless and the costs of going to law

Mr Justice Max BarrettI have already noted on this blog the comments of Barrett J (pictured left) in Traynor v Guinness UDV Ireland [2015] IEHC 732 (24 November 2015) [1] that “we have now an expensive court system that remains alien to many and truly accessible to increasingly few”. He recently returned to this theme in Burke v Lawless [2016] IEHC 455 (29 July 2016) (emphasis added):

1. In 2010, Ms Lawless engaged a firm of solicitors to do certain work for her. Apart from an initial down-payment of €5,000, she has not paid a cent for the work that followed. That work was not un-extensive. It related to a dispute concerning an auction of certain lands. Ms Lawless maintained that despite being the highest bidder at an auction of the lands, the lands were not sold to her. Legal proceedings were initiated. Junior and Senior Counsel were retained. Eventually, the proceedings settled. But in all the ‘to-ing and fro-ing’, Ms Lawless ran up legal fees of €176,433.65.

2. A comprehensive fee note issued to Ms Lawless on or about 7th November, 2011, and has been placed before the court in evidence. This indicates that the fees payable by Ms Lawless comprise, inter alia, €120k of solicitors’ fees, almost €40k of fees for Senior Counsel, and €24k for junior counsel. These are enormous, though not at all untypical, fees that point to a continuing deficiency in our legal system whereby full and proper legal representation, at least in civil proceedings, is increasingly a boon that is properly affordable by the few who are rich, and a bane to be feared by the many who are not.

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The Legal Services Regulation Bill has – eventually! – passed all stages in the Seanad

Advert for CEO of LSRAPictured left is a thumbnail of a photograph of an advertisment that appeared in last Friday’s Irish Times (click through for the full size photograph, where the advertisment is more readable; it’s not online anywhere I can find). It is an advance announcement of the upcoming vacancy for Chief Executive Officer of the Legal Services Regulation Authority (LSRA). I suspect that, when the advertisment was placed, it was expected that the Report and Final stages of the Legal Services Regulation Bill, 2011 would have been taken in the Seanad last Thursday. However, given the large volume of government amendments to the Bill, the Committee stage spilled over until Thursday, and the marathon Report stage continued through Tuesday and yesterday, when the Final stage was taken. After all the squabbles, all the controversy, and all the amendments, all that is required now is the signature of the President. The advertisement says that, once the Bill is enacted, it is intended to proceed quickly to appoint a Chief Executive and get the LSRA up and running. Presumably, the CEO and other vacancies will appear in due course on the Public Jobs website.

The LRSA will consist of 11 members, with expertise in relation to the provision of legal services; legal education and legal training; competition law and policy; the maintenance of standards in professions regulated by a statutory body; dealing with complaints against members of professions regulated by a statutory body; business and commercial matters; the needs of consumers of legal services. A majority will be lay persons (that is, not practising solicitors or barristers), of whom

(i) 1 shall be nominated for appointment by the Citizens Information Board,
(ii) 1 shall be nominated for appointment by An tÚdarás um Ard-Oideachas,
(iii) 1 shall be nominated for appointment by the Competition and Consumer Protection Commission,
(iv) 1 shall be nominated for appointment by the Irish Human Rights and Equality Commission,
(v) 1 shall be nominated for appointment by the Institute of Legal Costs Accountants, …
(vi) 1 shall be nominated for appointment by the Consumers’ Association of Ireland, …
(b) 1 shall be nominated for appointment by the Bar Council,
(c) 1 shall be a solicitor nominated for appointment by the Legal Aid Board,
(d) 1 shall be nominated for appointment by the Honorable Society of King’s Inns, and
(e) 2 shall be nominated for appointment by the Law Society.

Given that the members will be nominated by these various bodies, there will be no role for the State Boards website. (There are interesting statistics in the Irish Times (though not yet on the state boards site) on the first year of operation of the latter website: there were than 4,200 applications for 255 vacancies on 63 State boards; of those appointed, 56 per cent were male and 44 per cent were female). And in making its appointments to the LRSA, the Government will have to ensure that no fewer than 4 members are women and no fewer than 4 members are men.

The LRSA will have its work cut out in ensuring systemic reform of the Irish legal system. Other jurisdictions are much further down that road. Indeed, in the UK, as part of plan aimed at Boosting competition to bring down bills for families and firms, the Treasury announced earlier this week that the government

… will launch a consultation by spring 2016 on removing barriers to entry for alternative business models in legal services, and on making legal service regulators independent from their representative bodies. This will create a fairer, more balanced regulatory regime for England and Wales that encourages competition, making it easier for businesses such as supermarkets and estate agents among others, to offer legal services like conveyancing, probate and litigation [para 2.11, p 12 (pdf)].

Access to justice when legal costs are high – 2 updates

Solicitors Regulatory Authority regulation timelineHard on the heels of my post on access to justice when legal costs are high come two updates.

First, in the UK, the Solicitors Regulatory Authority (SRA) has published a position paper, proposing a new simplified model for principles-based regulation of the solicitors’ profession. A timeline of reform of that profession over the last decade is set out in the image at the top left; click on it (or here) for a bigger version.

Second, the Seanad yesterday continued – and came close to completing – its consideration of the Legal Services Regulation Bill, 2011. Given the controversy that has attended earlier stages of this Bill, the lack of fanfare yesterday and today is remarkable. Perhaps this is the way reform now begins, not with a bang but with a whimper.

Access to justice when legal costs are high

Who's who in court.gifI have had occasion on this blog to repeat the old adage that justice is open to all – like the Ritz Hotel. I was reminded of it by two headlines I saw this morning.

The first is from today’s Irish Times:

Judge says courts ‘fearfully expensive’ and ‘accessible to few’

The court system is “fearfully expensive”, “alien” and “truly accessible to increasingly few”, a High Court Judge has said. The courts were a forum that should be engaged only as “a last resort”, Mr Justice Max Barrett added. … “Almost a hundred years after the opening salvos that led to the creation of our present Republic, we have now an expensive court system that remains alien to many and truly accessible to increasingly few.”

Update: Barrett J made these remarks in Traynor v Guinness UDV Ireland [2015] IEHC 732 (24 November 2015) [1], permitting the case to proceed, but recommending that the parties resolve the matter “collaboratively if possible, by mediation if not, by expert decision if necessary and, only as a very last resort, in this fearfully expensive forum” (id).

The second is from the Brief (a daily email newsletter from the Times, which will be made available later in the week here):

We can’t afford lawyers, says public

Lawyers and legal advice are well beyond the budgets of ordinary people, a survey published this week has found.

Some 70 per cent of respondents to research conducted by Citizens Advice said they would not be able to afford a lawyer to advise on a problem or dispute. Only about 10 per cent were confident they could stump up the cost of legal fees.

Other conclusions from the Report are that 1 in 7 don’t have confidence in the justice system, that low levels of support and advice are putting off some people from seeking to solve their problems, that more and more people are going to court without a lawyer, that negative experiences are leading to negative opinions of the justice system, that people’s bad experiences and perceptions of justice are putting them off using it, and that, overall, only 2 in 5 (39 per cent) people believe that the justice system works well for citizens. Also published today is a Report Card on Barriers to Affordable Legal Help in the US, which makes very similar points. The American Bar Association has established a Commission on the Future of Legal Services to “propose new approaches that are not constrained by traditional models for delivering legal services and are rooted in the essential values of protecting the public, enhancing diversity and inclusion, and pursuing justice for all”.

The recent Canadian Bar Association report on its Legal Futures Initiative – entitled Futures: Transforming the Delivery of Legal Services in Canada (pdf) – made a series of recommendations around flexibility in business structures, including the adoption of alternative business structures, and new models for legal education. In Australia, recent reforms in New South Wales and Victoria are intended to create a common legal services market, underpinned by a uniform regulatory system, to promote efficient and cost-effective administration of justice. Canada and Australia are on a journey down the same road travelled recently in the UK, where the destination was the Legal Services Regulation Board established by the Legal Services Act 2007.

Also on that road is the Legal Services Regulation Bill. If it improves the problems identified by Barrett J, by reducing legal costs, then its (long delayed, but now imminent) enactment cannot come soon enough. And it will be a necessary endeavour. Confidence in the administration of justice is at the heart of the rule of law. Access to justice is a constitutional fundamental (Greenclean Waste Management v Leahy (No 2) [2014] IEHC 314 (05 June 2014) [23] (Hogan J, upholding after the event legal costs insurance as serving important needs within the community by facilitating access to justice for persons and entities who might otherwise be denied it). Of course, the Bill (heavily amended, and now far more modest than the position recommended in Canada, or obtaining in the UK, New South Wales, and Victoria) on its own will be an insufficient remedy for these problems, but it is a start it might at least be a good start, and it may even be half the work. But that is all that it will be. Far more will need to be done. Much will depend on the Legal Services Regulatory Authority established under it. For that, we shall have wait and see. And, meantime, our expensive court system will remain alien to many and truly accessible to increasingly few.

Theseus’ paradox and the Legal Services Regulation Bill

The deeds of Theseus, on an Attic red-figured kylix, c.440–430 BCEAccording to Plutarch, in his famous Lives of the Noble Greeks and Romans, Theseus, mythical king of Athens, after many labours and adventures (shown left), including the slaying of the Minotaur, returned to Athens, where his ship was kept in the harbour as a memorial for several centuries. The Athenians repaired and restored it over time, so that eventually every part of it had been replaced. Theseus’ paradox raises the question of whether something that has had all of its parts replaced remains the same thing. The same conundrum arises with the allegorical axe which has had both its head and its handle replaced several times. The Legal Services Regulation Bill has been amended so much during its labyrinthine journey through the Houses of the Oireachtas that I am reminded of these stories.

Many of its proposals were prefigured by the UK’s Legal Services Act 2007. Writing this morning in the Brief (a daily email newsletter from the Times, which will be made available later in the week here), Dame Janet Paraskeva made two points about the Act which resonate in the context of the current Bill. First, she points out the promise of the Act has not always been fulfilled “not … by any shortcoming in the legislation but by a lack of will to make the practical changes on the ground that would remove obstacles to choice.” That is a cautionary tale for the implementation of the Bill, if (and, as now seems likely, when) it is finally enacted.

Second, she argues that the full separation of regulatory and representative functions is one significant piece of unfinished business in the implementation of the 2007 Act:

When regulatory and representative functions are muddled, so are the purposes and impacts of the two activities. … In the operation of the legal services market, and in the delivery of legal services, where the responsibilities and activity of representative and regulatory bodies overlap, there is uncertainty and at times additional, unnecessary burdens that hurt legal businesses and the functioning of the market. … Clarity of separation of roles gives confidence to consumers and certainty to the regulated community. …

This separation of regulatory and representative functions is also a significant element of the Bill. It will establish a Legal Services Regulatory Authority, to “regulate the provision of legal services by legal practitioners” and to “ensure the maintenance and improvement of standards in the provision of such services in the State” (section 12(1) of the Bill as passed by the Dáil (pdf)). For so long as this remains, then the Bill will not have changed out of all recognition, and I don’t think that Theseus’ Paradox will apply. Dame Janet’s column stands as a warning that setting this out in legislation is only the beginning of the story; there are many labours to follow to ensure that its promise is fulfilled.

Impending changes to legal education

Stethescope and gavelWhile 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.

The IMF deal can change the Irish legal system for the better

Sunday Business Post, front page, 12 Dec 10, via their websiteIn yesterday’s Sunday Business Post, I argued that the IMF deal can change the Irish legal system for the better, reflecting arguments I have already made here and here.

IMF deal can change the Irish legal system for the better

The IMF deal has provoked a great deal of discussion, from its impact on our political and economic sovereignty, through the details of tax increases, state spending cuts and the implementation timetable, to the question of whether it needs to be ratified by Dáil resolution or even referendum. But there is a lot more to it than that.

IMF packages typically require structural reform to open the labour market and encourage competition in goods and services. The memorandum of understanding between the IMF and our government is no different. It requires the government to introduce legislation to remove restrictions on trade and competition in professions such as law, medicine and pharmacy. …

The IMF memorandum made it clear that all of the necessary legislation must be enacted by the end of the third quarter of 2011. This is probably not an impossible target, as these recommendations were not new in 2005 and 2006: many of them had been made in a report in 1990. Moreover, many other jurisdictions have already been down the same road. .. There are, therefore, many precedents to aid the Department of Justice in drafting the necessary legislation. It is unfortunate that successive governments have not implemented these reports.

Read the full piece here. Picking up on this, Rossa McMahon has rather dryly observed that the Government could help bring down legal costs overnight, but won’t. He concluded that if the IMF reforms “are implemented in the relatively short timeframe of the programme, they would represent something of a Big Bang for the professions”.

Bar Council unhappy with IMF proposals

Bar Council logo, via the Law Library websiteFollowing on from my post on the impact of the IMF bailout on Irish legal education, I see from today’s Irish Times that the Bar Council (logo left) is not happy with some of the proposals, in particular those directed to the establishment of an independent statutory Legal Services Commission:

Parts of legal sector reform ‘not in public interest’

CAROL COULTER, Legal Affairs Editor

THE BAR Council has criticised proposals concerning the legal professions in the Government’s four-year plan and in the EU-International Monetary Fund (IMF) programme of financial support. … Responding to queries from The Irish Times, the Bar Council said it welcomed aspects of the plan and the programme:

However, there are other aspects which have come as some surprise to the Bar Council, and which cause it concern, not because of any sectional or selfish interest but because they do not appear to be in the public interest.

… Bar Council chairman Paul O’Higgins SC said the Council had not been made aware of any detailed proposal to give effect to the establishment of an agency described as an “independent regulator” and it awaited details:

The Bar Council notes that the position of legal services ombudsman has recently been advertised in the national press. It is not clear how that position will interact with what may be a further State agency, namely, the ‘independent regulator’. …

Well, they would say that, wouldn’t they? The article finished with a quote from me:

the single most effective reform of the legal system would be the establishment of an independent regulator and the introduction of genuinely competitive tendering.

I don’t agree with the Bar Council’s point about there being a potential conflict between the Legal Services Commission and the Legal Services Ombudsman. The role of that office (which I welcomed when the current legislation was initially published) is to oversee the handling by the Law Society and Bar Council of complaints by clients of solicitors and barristers. The Ombudsman is independent in the performance of the functions of the office. There is no reason why this function could not simply be folded into the more general Legal Services Commission. For example, the Ombudsman could be a member of the Commission, and the Ombudsman’s office could be a division within the broader functions of the Commission. Moreover, there is no reason why the Ombudsman should not be given greater powers in respect of disciplinary matters relating to both branches of the profession: in particular, that office could be the first port of call for parties seeking to complain about a solicitor or barrister, and not simply be an appeal body from an internal complaints system.

Other divisions within the Legal Services Commission can take up the other functions recommended by the Legal Costs Working Group in 2005 and the Competition Authority in 2006. One of these concerns extending the provision of professional legal education beyond the monopolies currently enjoyed by the Law Society in training solicitors and the King’s Inns in training barristers. Most other common law countries have gone this route. In my view, it is long past time for Ireland to do the same. My only regret is that is has taken the IMF to make us do it!