'Uncompetitive' legal profession criticized in report

A report on the legal professions has recommended allowing more universities offer vocational training and the establishment of an independent regulator in an bid to ease unjustifiable restrictions on competition in the sector.

The Competition Authority's preliminary report into the legal professions, which was published today, noted that access to legal education is "determined by monopoly establishments controlled by lawyers".

The report said the demand for legal services in the State has grown substantially to exceed €1.14 billion in 2001, up from €300 million in 1992 and that average incomes in the profession in 2001 were €120,000. More than 130 senior counsel earned over €230,000.

Dr John Fingleton, chairman of the authority, said the current legal system was failing consumers by not offering the value and range of services that they and the economy needed.

The report suggests 41 proposals to remedy the problems it identified in the profession. Central to these is widening the availability of training for solicitors and barristers to suitable courses in more colleges.

Under the current system, solicitors can only train at Blackhall Place and barristers at King's Inns. The Competition Authority described these monopolies are indefensible and said they do not occur in other professions.

The report recommends that the two colleges issue criteria detailing how training for solicitors and barristers should be provided by the end of September. This would allow other colleges apply to provide these training courses, possibly by the 2006 academic year.

Two colleges, University of Limerick and Dublin Institute of Technology, have already expressed interest in running such courses.

Drawing an analogy with the engineering profession, Dr Fingleton said if engineering were taught in the same way, there would be only one college offering engineering degrees instead of 14; businesses could not hire engineers directly but would have to go via another specialist and engineers could not advertise or work in partnership.

Under such a system, Dr Fingleton said there would be fewer engineers and they would charge more. And customers would have less choice.

In examining regulation of the sector, the Competition Authority found that the self-regulation practiced by the legal profession "involves a serious conflict of interest as each of the regulatory bodies is controlled by lawyers."

To address this issue the report suggests a single independent regulator but no additional regulatory burden. This would be in line with international best practice and follows reform undertaken by countries like Britain, from where the legal profession inherited many of its restrictions. New legislation would be required to introduce this.

The report also makes a number of recommendations about the operation of the legal profession. Barristers should be able to offer their services directly to clients and should be allowed to represent their employers in court, the report says.

On the basis of the recommendations issued today the Competition Authority plans to consult with the Law Society and the Bar Council on how best to implement reform. Dr Fingleton said he hoped many of the recommendations could be introduced in partnership with the legal bodies.

"If the response of the professional bodies is 'everything's fine, we have no problem', that's a head in the sand attitude and that will delay reform," he said.

Mr Hugh Mohan SC, chairman of the Bar Council, said the report would require detailed and careful consideration. "We will be studying the document very carefully and will engage with the Competition Authority in relation to a number of issues in the report."

"Some of the proposals will require the alteration of existing rules and practices. Certain others affect fundamental aspects of the legal system and the administration of justice and will need to be discussed further", he said.

Dr Fingleton suggested that there was a strong consumer demand for reform. "I think there's a climate of the public demanding more competition in this country and singling out a whole range of sectors that are not performing well . . . That will increase political pressure" to take action, he said.

Responding to the interim report, the Minister for Enterprise Trade and Employment, Mr Martin, asked all sides in the consolation process to remember that competition is as good for business as it is for consumers.

Fine Gael's Enterprise, Trade and Employment spokesman, Mr Phil Hogan, said the report, if implemented would "revolutionise the legal profession, demolish many barriers to fair competition and without doubt widen choice and give better value to the consumers who spend over €1 billion per year on this sector."

The Labour Party spokesman, Mr Brendan Howlin, also welcomed the report, saying its recommendations would help improve "the transparency and accountability of the regulation system applying to the legal profession".

He added that reform of the current system of regulated price control is necessary in order to ensure that the rights of third parties are properly protected.