The State acts like it “only does its shopping at Brown Thomas” when it is looking for a barrister, Fianna Fáil justice spokesman Jim O’Callaghan has said.
Speaking as the Oireachtas justice committee held a meeting on legal costs, the Dublin Bay South TD, who is a senior counsel, said his impression was that the State and the insurance industry kept going back to the same people when seeking legal representation.
Mr O’Callaghan said about 300 of the 2,300 barristers in the State won the bulk of the work. He said the Bar was a very competitive environment, but a lot of very educated and able barristers were not getting enough work or earning a living.
He said the State and the insurance industry – both of which were represented at the committee – were the largest purchasers of barristers’ services, but that they sought these services from the same group of people.
“It is as if you are both only doing your shopping in Brown Thomas,” he said. “Why don’t you shop around a bit?”
Mr O’Callaghan said it was understandable that they did not want to hire untested people, but if they were to put work out to tender, he could guarantee that they would get young, qualified barristers who were able to do what was required, and would charge 75 per cent of what is being paid at present.
David Mack, head of the State Claims Agency's legal costs unit, said the agency could control the costs of cases it was directly involved with, but this was not the case with claims it handled on behalf of third parties. He said the Chief State Solicitor's Office managed those cases in terms of engaging barristers' services.
Isolde Goggin, chair of the Competition and Consumer Protection Commission, said barrister "superstars" were constantly used because there was an asymmetry of information available to consumers, who had to try assess the quality of the barrister they were hiring.
She said consumers went back to the “same superstars, who earn a lot of money… people only know about the very top of the industry”.
Mr Mack said that personal injury claims pursued on a no-win, no-fee basis are the “great outlier” when it comes to competition in the legal costs market.
He said there was no doubt these arrangements facilitated people who would not otherwise be able to get access to justice. “However, ultimately the costs are paid by a third party insurer or indemnifier and there is no incentive for the plaintiff to shop around or to seek value as to the fees charged.”
Gerry Hassett, the interim chief executive of Insurance Ireland, said his view on the reason behind growing premium prices was not changed by the report published on Monday by the Central Bank about motor insurance.
He said the insurance business was a cyclical one, with losses being made in some years and profits in other years. Premiums are received in one year, and paid out in future years.
“Some years you undershoot, some years you overshoot.”
He said the 9 per cent profit figure for last year was a peak for the period examined by the Central Bank. He would be “very surprised if that figure continued at that level”.
He said he was not sure what the profit margin was in the personal injury insurance market, but the “big trend” was that companies were leaving the market.
Ms Goggin said the State was the largest purchaser of legal services and that excessive fees and outdated practices continued to add to the size of the costs involved. The “existing monopolies” of the Law Society and the Bar Council in relation to education and entry into the solicitor and barrister professions, were among the contributors to the issue of high costs. Increased access would, she said, contribute to a lowering of legal costs.