Cliff Taylor: Waiting – and waiting – for new legal services regulator

When the troika came to town in late 2010, the Government of the day agreed – as part of the bailout plan – to have an independent regulator for legal services established by the third quarter of 2011, as part of a legal reform programme. Nearly four years later, the legislation to allow this to happen has yet to become law. Like a Beckett play, there has been a lot of waiting and very little movement.

The relevant legislation – the Legal Services Regulation Bill – was finally passed by the Dáil at the end of April, but its trip through the Seanad has been delayed by the summer break. When the Bill was originally debated in the Dáil then Minister for Justice Alan Shatter said we could "no longer afford to indulge a cabal of legal practitioners that wants to stay in the 19th century". Yet a wide political push to get reform enacted has been notable by its absence.

It's not as if we didn't know that reform was needed. A succession of reports dating back years, notably the landmark 2006 Competition Authority study of the profession, had pointed it out. Lawyers were regulating themselves, running closed training programmes – with traditions like Harry Potter's Hogwarts, Shatter said – setting their own fee structures and overseeing their own complaints mechanisms. The Bar Council and the Law Society acted as both lobby groups and regulators.

One result has been legal costs well above the international average, hurting the public directly as litigants and also as taxpayers, given the State's enormous use of legal services. Earlier this year the Medical Protection Society, which provides indemnity cover to medical consultants, said legal costs in cases here were among the highest in the world, pushing up insurance costs for doctors and leading to huge financial risks for claimants.

It was a year after the bailout before the legal reform legislation was even published. Maybe it will make it into the statute books before the fourth anniversary of its publication in October. Maybe. The EU Commission, in a recent report, blamed opposition from “vested interests” for the delay. The “vested interests” dispute this, with the Bar Council arguing that the delays had arisen from “within the Department” and due to other legislative priorities. The administrative machinery can move slowly, for sure, but the legal rearguard action has been wide-ranging and well-organised.

Profession

The initial draft of the Bill gave those who opposed one cause to rally around. It said that seven of the 11 members of the board of the new regulatory authority would be appointed directly by the Government and four by the profession. This looked like a Government takeover – and it could have been. Couldn’t you just see the Coalition appointing four

Fine Gael

nominees and three from Labour? This has now been amended, with the representatives from outside the profession being proposed by interest groups such as Ibec and Ictu, though still being appointed by the government.

However, the key battleground has been the structure of the profession and in particular the proposals to allow solicitors and barristers to work together in legal partnerships and to work with other professions, such as accountants, in multi-disciplinary practices.

These straightforward concepts would bring new ways of delivering legal services to the public. But let's not rush has been the message from the lawyers, and the legislators have listened. The Government was taking a "prudent" approach, Minister for Justice Frances Fitzgerald has said, surely stretching the meaning of that word well beyond its known limits.

Even when the law is passed, change will be slow, with those classic "Yes Minister tactics", the "consultation process" and "the review" , brought into play. The establishment of legal partnerships will be subject to a six-month consultation process by the new regulatory authority. The Cabinet agreed late last year – following much legal lobbying – that, in the case of the multi-disciplinary practices, the new authority should undertake a wider review and consultation and can then recommend whether this structure goes ahead at all. It other words it could yet be killed off.

The Bill will bring many welcome changes. Regulation will be taken on by an independent body, it will oversee an independent complaints mechanism, fees will be more transparent and some of the old restrictions – such as lawyers taking a share of “winnings” in court, or junior counsel taking a percentage of the fee of senior counsel – will end.

Restrictions

But the old restrictions will only go slowly into the night. The ability of a consumer to contact a barrister directly on a contentious issue – in other words one before the courts – rather than via a solicitor is also to be the subject of research and consultation by the new authority, before anything happens. The EU Commission and Competition Authority chair

Isolde Goggin

have both criticised the fact that the Bill does not abolish the so-called “solicitor’s lien” – under which a solicitor can hold on to your file until you have paid them in full, if you decide you want to move your business elsewhere.

There are plenty of other episodes in our recent history when strong vested interests delayed reform. Just look at how long it took to phase out tax reliefs for everything from horse-breeding to building. Those who shout loudest and have the resources to do so often get results. The troika ensured there were budget cuts, higher taxes and water charges, but they left without beating the lawyers. What odds now on the new legal services authority being up and running before polling day?