Politicians are still reluctant to tackle our expensive, inefficient and self-regulated legal systemSunday, August 22nd, 2010
Irish Mail on Sunday, August 22, 2010
Ireland has one of the most expensive legal systems in the developed world. Itâ€™s almost twice as expensive to enforce a business contract through the Irish courts as it is in the US according to a World Bank survey conducted last year. The process is time consuming as well as costly. It takes 515 days on average to resolve a case here compared with 399 in Britain, 300 in the US and 462 on average in OECD countries.
Our poor showing is partly down to a continuing acceptance of a self-regulatory legal regime and partly due to the imposition of rules and regulations that inhibit competition.
There have been numerous reports outlining what needs to be done, the most comprehensive of which was published by the Competition Authority in 2006. There have been some minor changes since then but the Authority is still of the view that the legal profession needs a root and branch reform.
So, while attention is currently focused on financial regulation and energy regulation, letâ€™s add regulation of the legal system into the mix. The reform is long overdue and while it is too late to stop the tribunal gravy train, there is time to ensure that the legal profession donâ€™t enjoy another bonanza arising from the banking crisis, NAMA and the inevitable associated legal disputes.
The potential for overcharging was highlighted recently when the court appointed Taxing Master, Charles Moran, who adjudicates disputes over legal costs, ordered a reduction from â‚¬2.1 million to â‚¬393,000 in the fee charges in a judicial review case.Â The instructing solicitors in the case, Patrick V Boland & Son of Newbridge, Co. Kildare had their claim for High Court instruction fees reduced from â‚¬975,000 to just â‚¬86,000. A claim of â‚¬10,000 for postage, copying and paper etc. was cut to â‚¬1,000.
Two barristers, Paul Gardiner SC and former attorney general, Harry Whelehan SC had their High Court brief fees reduced from a claimed â‚¬75,000 to â‚¬16,670.
Mr Morgan described the level of costs claimed as â€œrevolting in the extremeâ€ and expressed â€œdisgust and bewildermentâ€ at the claims.
There is no suggestion that the lawyers did anything wrong but the case does highlight the wide range of charges that legal professionals may see as justified.Â In this case the claims were referred to the Taxing Master but in most cases they are not.Â Itâ€™s obviously very easy for consumers to pay more than they need to.
But it is very difficult to shop around. The Competition Authority has made a few specific recommendations that could easily be enforced and would undoubtedly bring down costs.
Barristers are currently forbidden to give direct advice to personal or business consumers. They have to be approached through a solicitor. That ban should be lifted. They should also be allowed to form partnerships and businesses rather than having to operate as sole traders.
Those restrictions are imposed by the Bar Council and could be lifted by it. It doesnâ€™t require any change in the law.
Solicitors claim a common law right to hold onto a clients files thereby making it difficult, if not impossible to switch to another solicitor. That right should be removed and easy switching procedures introduced as they have been with bank accounts. The Law Society could initiate that change although it would require a change in the law to abolish the right altogether.
Legal fees are still often charged as a percentage of whatever award is achieved. Yet the required workload may have little or nothing to do with the size of the claim or the award. Legal fees should be based on the work done. That a change could be encouraged by the Taxing Master.
You donâ€™t need to be a fully trained solicitor to do conveyancing work on property transactions. Yet it tends to be the preserve of solicitors. The Competition Authority would like to see a new profession of conveyancers introduced to compete with solicitors.
But overall whatâ€™s needed is a new independent Legal Services Commission that would replace the self-regulatory role currently enjoyed by the Bar Council and the Law Society. The Competition Authority envisages that this body would have overall responsibility for regulating the profession putting the interests of consumers first.
The current regulators, as representatives of the legal professionals, face a clear conflict of interest. No other profession continues to enjoy such freedom from independent overview. Itâ€™s time for a change and there is no good reason to delay it any further. We can no longer afford to continue feeding the sacred cows.