Reform could cut fees in legal and medical sectors

The cost of legal and medical services could fall by up to 30 per cent, if anti-competitive practices in those professions were ended, a report commissioned for the Competition Authority has found. Colm Keena reports

Solicitors, barristers and doctors came in for most criticism in a 660-page report from economic consultants Indecon, which the authority published yesterday. The major report forms part of a three-year process of assessing anti-competitive practices in eight professions. The process is due to end next year by which time the authority hopes to have issued separate reports and recommendations in relation to each profession.

The managing director of Indecon, Mr Alan Gray, said that in other jurisdictions the removal of anti-competitive practices, such as demarcation, had led to falls in prices of 10-20 per cent. However when a number of anti-competitive practices were removed regarding a single profession, decreases in prices of 20 to 30 per cent had resulted. He cited solicitors, barristers and doctors as professions where such large decreases in costs were possible.

The other professions included in the Competition Authority inquiry were architects, engineers, vets, opticians and dentists.

Mr Gray said the study had found that there was normal competition between engineers and between architects. However with other professions, the extent of the restrictions on competition "are very significant", he said.

The extent of the restrictions, "particularly in the legal and medical professions, is really very remarkable and has the effect of damaging consumer interests".

He said the issues identified in the report were ones which Indecon believed should be addressed "as a priority" by the Competition Authority and Government.

The authority's chairman, Dr John Fingleton, said it would use the report as a detailed base for the remainder of its study of competition in the professions concerned. The study will now progress profession by profession, starting with engineers but working concurrently rather than sequentially. Consultation papers will be published before a final report on each profession. The process should be completed by the end of next year.

Dr Fingleton said the authority would begin with the engineering profession because it was likely to be completed quickly and because it was a profession that was not heavily regulated. Despite this "houses and bridges are not falling down", he said.

This would be of interest when hearing argument from other professions regarding to regulation and quality of services, he added.