LEGAL OPINION:DURING THE Dáil debate on the Legal Services Regulation Bill over the past two weeks, TDs from all parties, including the Government parties, have raised concerns that some of the proposals in the Bill will limit the access to the best legal expertise at the Bar for small and rural solicitors' firms.
They also raised concerns about the independence of the proposed Legal Services Regulatory Authority, and the distribution of work among members of the Bar. These concerns need to be addressed.
However, other aspects of the Bill have received less attention, and some may actually increase rather than decrease legal costs, which have been the subject of repeated criticism over the years.
The new regulatory authority, combined with new disciplinary machinery, will be funded by the legal professions who will pass the costs on to their clients.
There will be a new Legal Costs Adjudicator, but he or she will differ little from the existing High Court taxing masters, who have on many occasions presided over the awarding of exorbitant costs. In contrast with the current situation, hearings before the new body will be in private.
Some welcome proposals for transparency in legal costs are contained in the Bill, but such transparency will only arise once a solicitor is engaged. There is a need for transparency about the likely cost of routine legal services prior to the engagement of any solicitor in order to enable people to make an informed choice.
Of course, cheapest will not necessarily mean best, and clients are also entitled to know about the experience and expertise of the lawyers they are dealing with, while taking into account the likely ancillary costs associated with the size and location of offices and professional indemnity insurance.
A more fundamental examination of the mechanics of legal costs is needed.
The State, the largest consumer of legal services, inevitably sets the benchmark for costs in many areas.
Inexplicably, the State generally does not tender for legal services (it is not the only State in this position – legal services are exempted from obligatory tendering under EU law). This means there is no transparency in the award of State contracts and costs are set by what the State is prepared to pay, which sets benchmarks in the wider economy. The tribunals demonstrate the folly of this approach.
Another issue, and one little discussed, is the culture of cross-subsidisation that exists in the provision of legal services. In the majority of cases one of the parties will not end up paying the costs of the action.
Because the losing side pays the costs, most firms, especially those dealing with the general public, offer a “no foal, no fee” deal, whereby they take the case on the basis that they will get their costs if they win, but will not charge the client if they lose – though the client will be liable for the fees of the other side.
This means that, for a firm to be commercially viable, it must price winning cases to subsidise those that are lost, thereby inflating costs. Many such cases are genuinely in the public interest, in that they clarify the law on an issue of public importance. They can only be taken by an individual litigant, who must carry the risk of paying the other side’s costs – a huge deterrent to the vast majority of people who may have a very legitimate case to pursue.
This could be dealt with by “protective costs orders” – orders from the court at the outset that, because the case involves a matter of public importance, each side will bear their own costs or there will be a cap on costs.
It will involve the lawyers on the winning side passing up the opportunity of a windfall in fees but it would ensure that meritorious cases can be taken without fear of punitive costs being awarded against the individual who takes them.
There is much in the Bill that may benefit large commercial firms in accessing legal services.
There is little, so far, that increases access to legal services and to justice in general for ordinary members of the public.