Legal Reform - measures to reduce costs

[Brendan Burgess]

Section 89 prohibits a legal practitioner from charging any amount in respect of legal costs if—
• they are legal costs in connection with contentious business expressed as a specified percentage or proportion of any
damages (or other moneys) that may be or become payable to
the client, other than in relation to a matter seeking only to
recover a debt or liquidated demand, or
• they purport to set the legal costs to be charged to a junior
counsel as a specified percentage or proportion of the legal costs
paid to a senior counsel.
It also prohibits a legal practitioner from, without the prior written
agreement of his or her client, deducting or appropriating any
amount in respect of legal costs from the amount of any damages or
moneys that become payable to the client in respect of legal services
that the legal practitioner provided to the client.

 

[Brendan Burgess]

Recommendations from the [broken link removed] Report

Legal Fees

28. Consumers should be able to make informed decisions about which lawyer to choose and at what rates. Currently, there is limited information available to consumers of legal services about fees and costs prior to engaging the services of a lawyer. The lack of transparency in the price of legal services makes it difficult for consumers to shop around for legal services. If consumers cannot compare the prices for legal services there is little incentive for lawyers to compete on price.

29. In addition, the lack of information available to consumers of legal services has facilitated the persistence of a number of anti-consumer practices in the legal profession. In particular:
• Consumers do not always receive a letter laying out actual or estimated charges on retaining a solicitor, even though they have a legal right to such a letter;
• Solicitors still frequently charge fees based on a percentage of the value of the assets being sold or disputed though this is not necessarily in the client’s interest;
• Although it is prohibited by law to base legal fees on the monetary award a client receives in a case, evidence from two different independent sources shows that the principal determinant of legal fees in contentious issues is the size of the award;
• Junior counsel generally charge a fee equal to two-thirds of the senior counsel’s fee, regardless of the work done by each barrister, despite the fact that this practice was identified as anti-competitive in an independent report on the legal profession 16 years ago

30. These features and practices can affect all buyers of legal services, even well-informed repeat buyers, but they are particularly likely to occur when the consumer is unaware of their effects. The Law Society and the Bar Council have failed to provide sufficient information for consumers of legal services about the legal profession generally and the charging of fees specifically. Neither has a section for consumers on its website. This contrasts with the efforts of regulators in other sectors of the economy, for example, the Commission for Communications Regulation and the Financial Regulator.

31. The Competition Authority strongly recommends that the Law Society and the Bar Council develop and actively provide useful and accessible information for consumers on their rights and on key features of legal services. They should develop a “Consumer Information” page on their websites.

32. The Competition Authority recommends that the statutory requirement on solicitors to provide fee letters be made more prescriptive to ensure that solicitors’ clients get a useful insight into the cost they face for legal services. Failure to provide fee letters should be subject to a meaningful penalty. The Competition Authority also recommends that the Bar Council should oblige barristers to provide similar fee information.

33. The practice whereby junior counsel charge a fee at two-thirds that of the senior counsel’s fee in a case (without reference to work done) is anti-competitive and ant i-consumer. It is vital that consumers are made aware that junior counsel need not charge a fee at two-thirds that of the senior’s in a case. The Competition Authority also recommends that the Bar Council, as the regulator of barristers, should point out to its members that the practice is anti-competitive.

34. The Competition Authority makes further recommendations regarding the State’s system of taxation of costs to ensure that the practices outlined above are no longer accepted by the State’s system for adjudicating on legal costs.

35. Finally, the Competition Authority recommends that, as the largest buyer of legal services, the State considers introducing competitive tendering for legal services.

 

[Brendan Burgess]

In 2005, the [broken link removed] issued a report which covers many structural issues as well as the costs of solicitors and barristers.

I don't know if it was ever acted upon.

Brendan

 

[nuac]

Much costs delay and expense arise from antiquated procedures in the Courft offices.

while there has been some computerisation, especially in the District Courts, there is still a lot of superflous paper involved.

1.E.g court fees are paid by paying the amount to a separate court office in Dublin or at a DIstrict Court office outside Dublin. So much on each affidavit, summons etc etc. ON a busy morning there are queues of staff from solicitors' office waiting to pay fees and have the receipt stamped on various documents, before filing them in the relevant court office. Time wasting and inefficient. Should provide for electroniic payment.


2. In HIgh Court many simple motions could be dealt with by registrars either in the office or in Court- rather than going befoe a High Court Judge or the Master of the HIgh Court

3 Circuit and High COurt should provide for electronic filing of documents.

 

[Brendan Burgess]

Hi nuac

That is a very interesting comment.

I think that legal costs could be reduced through merging the two arms of the profession.

But much bigger costs could be saved and delays reduced through better courts administration.

Did the Legal Costs Working Group comment on this?

Brendan

 

[nuac]

BB, I don.t think fusion of solicitors and barristers roles would reduce costs. I don't have time to do a memo on this due to pressure of work today - I have posted shortly on that topic elsewhere on this board recently.

My view is based on practical experience as a solicitor running many many cases of various types over the last 40+ years.

 

[Brendan Burgess]

Alan Shatter answered some Parliamentary Questions on 25th October and they tended to focus on costs. I thought that this was interesting

All of those measures will contribute to cost reduction but the Legal Services Bill is not a magic bullet in affecting cost reduction because a broad range of other things must be done, some of which we are engaged in dealing with. First, we must try to ensure that people use alternative dispute resolution methods as opposed to litigation when disputes arise and I am happy to tell the House that a mediation and conciliation Bill which I hope to bring before the House is at a reasonably advanced stage of preparation.

Second, there is a need to provide for greater efficiencies within the court services to ensure our courts operate in a manner which does not unnecessarily give rise to legal costs.
...
There are substantial reforms needed within our court structures, which ensure that those who have to litigate areas of difficulty in their lives know lawyers are kept waiting around courts from one day to the next with court hearings lasting an hour or a couple of hours while other matters intervene. Court cases end up costing clients of the legal profession for three or four days in court when, if the courts were better organised, the matter might have been dealt with within a single day.

These are specific issues and I have urged the Courts Service to address them in the interests of consumers and also in the interest of the State, in the context of the substantial legal costs the State must meet in dealing with litigation taken against the State.

[FONT=&quot]The anonymity applies to the parties, that is, the husband, the wife or the cohabitees in a family dispute or, if it involved an adoption issue, the adopters and perhaps the biological parent but the anonymity will not apply to the law firm under the provisions of the Bill. The fact that these decisions will be published, whether we are dealing with family litigation, civil litigation or any other litigation, will also act as a spotlight on costs that are charged.[/FONT]

[FONT=&quot][/FONT]

[FONT=&quot]As I mentioned in my initial response, where a complaint of excessive charging is adjudicated upon it is an issue that can fall within the context of misconduct as it arises under the Bill, which may result in that matter being dealt with from a disciplinary perspective. There is a range of what I would describe as connected reforms which should not only shed a spotlight in this area but disincentivise persons who overcharge. In fairness to members of the legal profession, not every allegation of overcharging against members of the legal profession is true. Some are true but some are not.[/FONT]

[FONT=&quot]The view of the troika is that, on average, legal costs in this jurisdiction are something in excess of 20% of what they would be in our neighbouring jurisdiction in England. I am not sure how they have calculated that sum because often it is difficult to do the comparisons.[/FONT]