Published on 

Minister Fitzgerald publishes proposed amendments to the Legal Services Regulation Bill

“This landmark bill delivers real and lasting reform in the legal services areas, to benefit of the justice system, the consumer and the economy.” – Fitzgerald

“Amended Bill contains substantial provisions which will promote competition, help reduce legal costs in Ireland and support Ireland’s economic competitiveness.”

Proposed Committee Stage amendments include provisions to:
· Strengthen the powers of the new Legal Services Regulatory Authority;
· Introduce and regulate new business models to get new Legal Partnerships (barrister/barrister and barrister/solicitor firms) up-and-running and introduce Limited Liability Partnerships;
· Provide new robust oversight powers for the Authority in relation to functions to be carried out by the Law Society;
· Introduce Pre-Action Protocols for medical negligence cases for the first time.


18 November 2015

The Minister for Justice & Equality, Frances Fitzgerald TD, has today published over 100 amendments to the Legal Services Regulation Bill. The amendments, which were yesterday approved by Cabinet, to will be tabled during the Committee Stage of the Bill which will take place in Seanad Éireann tomorrow Thursday 19th November.

The Bill currently comprises 158 sections spread over 13 Parts.

Minister Fitzgerald stated: “The Government’s intention is that this Bill will now be enacted before the Dáil rises for the Christmas recess so that the new Legal Services Regulatory Authority will be up and running early in 2016.”

The Minister said that the Legal Services Regulation Bill will deliver on the Programme for Government commitment to “Establish independent regulation of the legal professions to improve access and competition, make legal costs more transparent and ensure adequate procedures for addressing consumer complaints”.

The Minister stated: “This landmark Bill, providing independent regulation of the legal profession for the first time, will deliver real and lasting reform in the legal services areas, to the benefit of the justice system, the consumer and the economy.”

“These reforms respond to 34 years of Reports recommending reforms to the legal profession, going back to the Restrictive Practices Commission report in 1982. This Government is delivering on long-overdue reforms.”

This new bill will:

· Establish a Statutory Regulator of all Legal Practitioners for first time in history of State.
· Set down in law for the first times the statutory regulatory objectives and professional principles for legal services and legal practitioners.
· Subject the Law Society to oversight of an independent statutory Regulator for the first time.
· Subject Irish barristers to independent regulation for the first time in the history of the State.
· Allow for the 100+ barristers who are operating at the moment in a regulatory limbo outside of the Law Library to be regulated for the first time.
· Introduce new Business Models to increase competition in legal services.
· Allow for Legal Partnerships - so barristers can start up business either with other barristers or with solicitors in Legal Partnerships within a year of enactment of the Bill.
· Allow barristers in employment to provide legal services to their employers including representing the employer in Court, tribunals etc.
· Overhaul the system for adjudication of legal costs and provisions regarding legal fees.
· Provide that complaints about legal practitioners will be dealt with by an independent statutory public body for the first time.
· Provide protection for the taxpayer from exposure to Compensation funds.
· Reform the rules on Legal Services Advertising

Minister Fitzgerald added that: “the amended Bill contains substantial provisions which will promote competition, help reduce legal costs in Ireland and support Ireland’s economic competitiveness. These are important reforms and will be good news for consumers and for SME’s and they will help improve equity of access to the Justice system for all.”

Commenting on the Seanad Committee Stage amendments, Minister Fitzgerald stated: “These amendments are designed to strengthen the proposed regulatory powers for the new Legal Services Regulatory Authority; introduce and regulate new business models, including Limited Liability Partnerships; and provide robust oversight powers for the Authority in relation to functions to be carried out by Law Society.”

Reducing Legal Costs
The provisions of the Bill which address legal costs include:
· The existing Taxing Master system is being replaced and overhauled in a new Office of Legal Costs Adjudicator.
· There will be new transparency rules for legal practitioners on informing clients about costs and estimates.
· There will be a new set of principles for adjudicators assessing bills of costs.
· There will be new rules about fees and junior counsel charging % of senior counsel fees and fees being charged as % of value of cases.
· New business models - such as Legal Partnerships of barristers operating outside of the Law Library, and of solicitors and barristers working together - will provide competition and choice for consumers – starting in 2016.
· The new Authority will deal with excessive fee complaints by informal resolution
· There will be State regulation of complaints about all legal practitioners for the first time.
· Barristers in employment representing their employers should mean lower business legal costs.
· Pre-Action Protocols for medical negligence cases will lower legal and medical insurance costs.

Complaints and Discipline
The Amendments in relation to Complaints and Discipline will ensure that:
· The new Regulatory Authority will handle all complaints about all legal practitioners up to and including the prosecution of any misconduct issues arising from complaints;
· The new Regulatory Authority will supervise the continued operation by the Law Society of its statutory functions relating to the Solicitors Compensation fund and financial and accounts-related oversight of solicitors under relevant provisions of the Solicitors Acts;
· The new Regulatory Authority will have a full suite of inspection powers, appropriate to a modern regulator, to underpin both its complaints handling and regulatory compliance powers.
· Several repeals and amendments will be necessary to the Solicitors Acts 1954-2011 to provide for the existence and powers of the new Regulatory Authority and for the retention of certain financial and compensation fund oversight by the Law Society under the Authority’s supervision.

New Business Models
The amendments in relation to the new Business Models (i.e. Legal Partnerships & Multi Disciplinary Practices) will provide:
· A new statement that as a matter of law, barristers and solicitors will be permitted to provide services through the new business models and no professional body shall prevent or restrict its members (whether solicitors or barristers) from working and doing business with barristers and solicitors who choose to practice through the new models;
· A new statement that as a matter of law, barristers will be permitted to provide legal services to their employers as employees up to and representing through the new business models and no professional body shall prevent or restrict its members (whether solicitors or barristers) from working and doing business with barristers who choose to practice as employees.
· A new set of provisions to allow for existing solicitors partnerships and the new Legal Partnerships to become Limited Liability Partnerships. Limited Liability Partnerships are partnerships where the partners are not personally liable (in terms of their own personal assets such as their homes etc) for debts, liabilities and obligations of a partnership business. In existing law (the Partnership Act 1890), partners are stated to be personally liable for the obligations of a partnership where the property of the partnership is not sufficient to meet liabilities. Other jurisdictions around the world including USA, Canada, UK and many others have modified partnership law to introduce limited liability for partners and these amendments propose that Ireland follow suit in relation to legal practitioners. The price of limited liability will be a specified level of professional indemnity insurance to protect clients, LLP registration, authorisation and regulatory oversight by the new Authority; provision of designated information to clients and creditors. Safeguards are put in place to ensure loss of limited liability status where there is fraud and dishonesty or in certain other circumstances and the new Authority will be empowered to make regulations regarding LLPs and to go to the High Court if necessary to enforce them.

Advertising
Under the Bill, the regulation of advertising by both solicitors and barristers will now be done by the new Regulatory Authority (and not by the professional bodies as happens at present).

The new provision has been discussed with the European Commission and will address the concerns expressed by the Commission, under Article 24 of the EU Services Directive, regarding the current restrictions that apply in this area.

Pre-Action Protocols
Amendments will be introduced for Pre-Action Protocols in respect of medical negligence cases. These protocols are procedures that are to be followed by both medical service providers and their patients or former patients in the event of disputes, complaints or inquiries in relation to medical services already received. Their purpose is to encourage full disclosure of all available evidence in advance of formal litigation with a view to early resolution thus leading to the lessening of litigation cases, their costs and impact on insurance costs and other courts business.

Further amendments
Further amendments will address issues including:
· Nominations to the Authority will reflect the merging of statutory bodies to create the Irish Human Rights and Equality Commission, and the Competition and Consumer Protection Commission;
· Under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, the new Authority will be the designated authority to monitor for money laundering compliance concerning barristers who practise outside of the Law Library;
· Complaints about Excessive Fees to avoid duplication between the functions of the new Legal Costs Adjudicators and the complaints functions of the Authority;
· The Authority’s functions and regulation making powers in relation to the professional indemnity insurance requirements for legal practitioners and different legal practices;
· An option for certain of the Law Society’s and Bar Council current staff to transfer to the new Authority to ensure there is a continuity of knowledge between the current professional body complaints handling systems and the regime of the new Authority;
· Issues of privilege arising where important information is discovered by the Authority during its investigations.

The Minister concluded: “We now have the basis to proceed to finalisation and enactment of this Bill within the coming weeks.”

“Once this Bill has been enacted, we can then proceed to appoint a Chief Executive and get the new Authority with its nominated members up and running. The amendments now being proposed strengthen the Bill. They set down a firm path, after thirty years of reports and recommendations, to commence State regulation and opening up of the Irish legal services market”

“It is important to note that this is not the end, but the beginning, of major reform in the Irish legal services market. We are setting the authority with a series of consultation and reporting tasks in its initial years on a whole range of further reforms. They will be consulting with all interests, including consumer representatives and competition experts, and reporting to the Minister and to the Oireachtas with their recommendations within two years.

Ends.../