Debate over excessive legal bills prompted reform plans

Analysis:Rows over tribunal costs have highlighted the issue of excessive legal fees, but this debate is really just the tip of the iceberg.

Across many areas of law, solicitors and barristers charge high fees, provide minimal cost and billing information and often link their charges to the amount of an award rather than to the work done. A case can settle within days, even minutes, without impacting on the global fees set by a lawyer before proceedings begin.

Whatever scrutiny there is of their invoices, whether in a court challenge or by the Taxing Master, will be carried out primarily by a member of their own profession rather than by an external agent.

These kinds of practices would not have - and have not - survived in many other areas of business, but they help to explain the spiralling costs of the planning tribunal, not to mention the complete inability of the Minister for Justice and the tribunal chairman to agree on the cost of that inquiry. Could it be €300 million or €1 billion? Who knows, when witnesses have to furnish so few details in support of their legal bills.

The average income of all lawyers, including newly-qualified juniors, was €164,000 in 2002 and has undoubtedly risen since. Lawyers accounted for one in eight of the highest earners in the tax figures from that year.

Michael McDowell's decision to set up a regulatory body and an assessment office for legal fees should be seen as part of a spectrum of reforms.

The Personal Injuries Assessment Board was set up in 2004 to deal with a situation where legal fees added half as much again to the cost of personal injuries awards. Legislation to set up a legal ombudsman, currently before the Oireachtas, is a response to public complaints about legal services.

The question about the Minister for Justice's latest initiative is whether it will achieve its stated aims. The promised consistency and transparency in legal fees are welcome, but not if the costs remain as high as they often are.

The Minister's implementation group says that guidelines on costs should take into account the value of the claim involved in a case as well as the risk involved in taking on "no foal, no fee" cases. This would seem to support the Law Society's contention that fees should be directly related to the value of an award.

Yet the Competition Authority, in its highly-critical report on the legal profession last December, claimed that such contingency fees are illegal. The proposal to set up a legal costs assessment office to replace the Taxing Master system is welcome. For the first time, non-lawyers would be involved in assessing legal costs.

To their credit, both branches of the legal profession have shown a willingness to adopt many of the changes being urged upon them by others.

Mr McDowell's proposals will not make it to the Oireachtas before the next election, so there is a doubt that they will ever be implemented. And given this week's comments by Sinn Féin's Arthur Morgan about the (six-figure and seven-figure) "pittances" being earned by the top criminal lawyers, the profession might have less to worry about than we think.