Law Student Submission on the Legal Services Regulation Bill sign now

LEGAL SERVICES REGULATION BILL
LAW STUDENTS’ SUBMISSION/PETITION
Having closely followed developments regarding the Legal Services Regulation Bill (hereafter referred to as the “Bill”), including debates conducted in Dáil Éireann, the sheer number of interest groups who have weighed into this proposed reform cannot but be noticed. The interest groups include FLAC on behalf of the public, especially the more vulnerable elements of society, the professional bodies, legal academics, the Competition Authority and indeed consumer groups. It is also heartening to hear individual TDs express concern for law students and newly qualified legal professionals in Dáil exchanges. It is on this basis that we feel that the concerns that we share as law students should be voiced.
This Submission is split broadly into two parts. The first considers the issues of immediate and direct concern to students. The second encapsulates the more general concerns that we share which might not be considered to relate to students directly but will inevitably affect us in time, as many of us aspire to join the legal profession.
This Submission is in no way as sophisticated as those which have been proffered by various interest groups nor is it meant to be. Nonetheless the concerns that we share are no less genuine. It is important to highlight at this juncture that the Submission has been prepared by concerned students and sent to Law schools across the country with the intent of garnering support and that there has been no involvement either from the professions or academics. We accept that parts of the Bill could only be recognised as commendable and forward thinking. Indeed the costs and transparency provisions in Parts 9 and 10 are one such example. However, at the risk of striking a negative note and due to the exigencies of time with regard to the Bill’s proposed enactment, we feel the need to focus on those parts of the Bill which give rise to concern as students. What follows is a brief outline of concerns with specific measures contained in the Bill.
SPECIFIC CONCERNS FROM THE PERSPECTIVE OF A LAW STUDENT:
THE COST OF THE NEW AUTHORITY: The new Legal Services Regulatory Authority (“LSRA”), envisaged by the Bill, seems to have little constraint imposed on its structure and operation. It will have 11 members, a Chief Executive as well as additional support staff, consultants and advisors, which the Minister for Justice may appoint, with the only caveat that the Minister of Public Expenditure and Reform must approve such appointments. On top of this there will be 16 persons on the two major bodies that will exist as part of the authority (the Complaints Committee and the Legal Practitioners Disciplinary Tribunal). One would have to question the eventual cost of such a structure when compared with the situation at present with the Law Society and Bar Council committees (who have had lay majorities since 2009) composed of persons who do much of the work uncompensated. The Competition Authority, in its 2006 report, proposed that the frontline regulators (the Law Society and Bar Council) maintain their role and that appeals and oversight supervision should be the responsibility of a new independent body. We can only presume that an oversight regulator would be cheaper. This in essence gives rise to our first concern. This body may well result in significant increased costs of practice in the two professions which will affect the solicitor or barrister starting out to a greater extent than the established lawyer. These reservations have been agitated by the fact that the Government refuses to disclose an estimation of what it will cost to run this new Authority. The independent review obtained by the Bar Council (published on 5 March 2012) indicates that the cost of the new structure will be high.
THE NEW BUSINESS MODELS UNDER THE BILL: The Bill proposes three new business models on offer to the legal professions. They are Multidisciplinary Disciplinary Partnerships (MDPs), Legal Partnerships (LPS) and Chambers for barristers who group together. The most worrying aspect is not necessarily the models themselves, so much as the haste and insistence by which they are being introduced. For an esteemed solicitor, such as Minister Shatter, who has practiced in a profession which is guided by the cautious conservative development of case law, it seems to fly in the face of common sense. It is our contention that it lacks prudence to demote the role of the pending report under the Bill simply to “how these new models should come in” instead of “should they come in at all?” The assumption has been made that they are invariably a positive step forward. There is however good reason to consider whether they should be introduced at all. A cursory glance at certain recommendations and developments show this. With regard to MDPs, arguments have been made to suggest other jurisdictions have introduced them so we should follow suit and that any potential difficulties can be overcome. We suggest that the largest common law jurisdiction, that being the United States, has held back from introducing MDPs partly as a response to the fallout from the Enron scandal and the conflict of interests that may arise in such firms. A recent report by Banco Espirito Santo following the commencement of the Legal Services Bill 2007 in the UK on the 6 of October 2011 predicts that the effect of the introduction of MDPs will be to shrink the number of competitors in the market from 10 to 5 commercial law firms with a turnover of more than 1 billion pounds per annum. In addition to these commercial operators, it is predicted a further 5 to 10 general service law firms will emerge having similar profit margins and with offices throughout the country akin to supermarkets or pharmacies. Looking at LPs it is clear from the Competition Authority’s report of 2006 that they are opposed to such an introduction. Their concern was that the more experienced barrister would join with the bigger law firms thereby preventing access for smaller and medium size firms to these barristers “leading to a reduction in the supply and quality of advocacy services for smaller buyers”. This will be the “brighter lights” of the Bar so to speak being offered salaries they can’t refuse. If this where to happen our fear is that these barristers will be kept busy with a steady workload from the employer and therefore unable to take cases of real public interest. It is the consumer of legal services that will be affected. Top barristers have taken cases of public interest at a reduced rate or pro bono (a no win no fee basis) through different schemes, the Public Interest Law Alliance and the Voluntary Access Scheme, to name but two. Examples include Judge Donal O’Donnell who acted for Mrs. McCann in McCann v Judge of Monaghan District Court which decided issues of considerable constitutional importance with regard to a person jailed for not having the ability to pay a debt. Judge O’Donnell was appointed straight from the ranks of Senior Counsel to the Supreme Court. An unusual distinction. Another example was in Foy v An-tArd-Chlaraitheoir where a renowned Senior Counsel, Bill Shipsey, represented Dr. Foy in the superior courts in order to have her birth certificate changed to acknowledge she was female. The two cases are simply mentioned in passing and many more similar examples exist.
CHAMBERS: One of our principal concerns is the introduction of chambers in Ireland. At the moment, under the current system of an independent referral bar, there is effectively no disincentive for an experienced barrister of seven years standing or more taking on a trainee barrister as a “pupil”. At the very least, persons aspiring to have a career at the Bar can easily enter the profession despite the reality that it is an extremely hard graft. Under a chambers system there are immediate costs associated with overheads (salaries, renting of additional office space, support staff etc) which may act as a disincentive for the principals of these chambers in terms of taking people on. If we look at the solicitor’s profession it is characterised by firms of varying sizes. By and large it is the bigger firms who take on most of the trainees. It is common consensus that the number of traineeships offered by these firms have reduced significantly. Even during the boom years, law students were by no means guaranteed a trainee contract and a person cannot qualify as a solicitor without the contract. There is no doubt these firms have reduced the number of traineeships offered as a result of the commercial realities to which they are exposed. Surely on a rudimentary level from a law student’s perspective intending to go down the barrister route, the proposed introduction of chambers is a worrying development. The only benefits being those who get a pupillage and then acquire a tenancy in chambers have at least a steady if not modest income. If we look at the UK scenario a report commissioned by The General Council of the Bar in 2006 showed that of the 71.5% of newly qualified barristers that had applied for pupillage, 51% had not been granted an interview. Of those who did receive an interview, 49.8% had not received an offer. The net import of these figures is that 17.5% of Bar Vocational Course (the equivalent of our Bar Course) graduates were likely to receive a pupillage. It has been suggested that far more people in the UK do the Bar and that situation will not occur in this jurisdiction. We respectfully submit that the numbers of persons qualifying from the Kings Inns has steadily increased in recent years and this, combined with the ever increasing plethora of law degrees offered by third level institutions, will result in Irish graduates of the Bar Course being placed in the exact same situation as their UK counterpart, whether it takes 5, 10 or 15 years to achieve this result.
On the issue of a chambers system being allowed in Ireland our Competition Authority was in favour of such a development. If we look at the Northern Irish Competition Authority however it rejected the idea and compared the North to our jurisdiction in terms of size. The Authority felt that the independent bar in the North was composed of a large number of sellers (barristers) offering services without any collusion between them to a large number of buyers (solicitors). They felt “allowing barristers form associations would, by bringing them together in larger units be a move away from the competitive model described above” and that by doing so they would be able to “raise prices, engage in price discrimination and even deny supply to certain customers”. We are not suggesting that these models should not be considered at all, because some if not all these structures may be a positive development. We ask that they at the very least undergo further study and consideration before a definite introduction.
We suggest that the current status quo is set up in favour of the student with the student being entitled to effectively choose what sort of work they want to engage in whether as a specialist advocate before a court (a barrister) or indeed become a provider of more general legal services and advice (a solicitor). This concern obviously precedes the report which is to be commissioned under the Bill –which Bill presupposes the introduction of the new structures. If the professions are unified it may well result in future lawyers who want to engage in certain work not being entitled to do so. For example a firm may well have a department full of litigators and not have the need for any more. It may even be commercially unwise to allow that department proliferate. It is our concern that should the profession unify, the ability of newly qualified legal professionals to undertake work of their choice will ultimately be decided by the commercial realities faced by firms. This stands in stark contrast to the choice presented to graduates currently.
MORE GENERAL RESERVATIONS WE SHARE:
THE INDEPENDENCE OF THE NEW REGULATORY BODY: It is difficult to see how the Legal Services Regulatory Authority is anything more than a thinly veiled attempt by to make the legal professions completely subservient to the executive. It is a worrying development from the point of view of young aspiring lawyers who understand the importance of independence particularly when you take account of the fact the state is a party to approximately 50% of cases before the Irish courts in some form or other. It is especially remarkable when you consider the reality that the legal profession (in the form of individual lawyers) is the only profession which is capable of holding the executive arm of government to account before courts of law. Perhaps the LRSA can be best understood when juxtaposed with other professional regulatory bodies. The Medical, Dentistry and Pharmacy professions are all regulated by a council and all three put forward the great majority of those members of their council. Take for example the Medical Council. There are 25 members in total. 5 of these members are to be lay persons chosen by the Minister of Health. One more lay person is to be nominated by the Minister of Education after consultation with Higher Education Authority. The remaining 19 are nominated by the relevant professional bodies. In contrast the LRSA will have 4 persons nominated by the 2 professional bodies (2 each) out of a total of 11 persons. The remainder will be appointed by the Minister. For all the talk of public perception regarding regulation little time has been given to the patently understandable reticence by some that this body will function as no more than a mouthpiece for the Minister. We share this concern as aspiring future lawyers. In the words of the Ex Chief Justice Ronan Keane “it is not sufficient to say it (LRSA) is independent. You must ensure that by the method of appointment, the level of remuneration and the method of dismissal”. What follows is an outline of the Minister of Justice’s influence in one way or another on the LRSA:
• Appointment of Members: S 8(2) (a): “[t]he members of the [LSRA] shall be appointed by the Government”. S 8(2) (b): “[t]he Government shall appoint one of the lay members of the [LSRA] to be chairperson of the Authority”. At least seven of the eleven (i.e. a majority) members will be appointed by the Government. In addition there is a specific “officer of the Minister”.
• Appointment of Staff: The Minister appoints the staff of the authority and determines their grades, remuneration, terms and conditions (S 20).
• Remuneration: The appointees are to be remunerated whatever the Minister determines (with the consent of the Minister for Public Expenditure and Reform) (S 8(11)).
• Term of office: The Government determines the term of office for members of the LSRA (S 8(6)). They are to be appointed for four years. The can be reappointed for a further term of four years.
• Terms and conditions: Each member of the LSRA shall act “on such terms and conditions as the Government may determine”.
• Removal: The appointees can be removed by the Government on the rather vague basis that their removal is necessary for the “effective performance of the functions of the authority” (S 12(c)). This is a wide-ranging and subjective provision which will inhibit a High Court judicial review of whether a dismissal on these grounds was lawful. Because the Government could take such an opinion at any time, the member will be conscious of this and it will impede him in his ability to.
• LSRA levy: The Minister works with the consent of the Minister for Public Expenditure and Reform. He determines the amount of operating costs and administrative expenses of the authority and
the disciplinary tribunal. The Minister raises the annual levy- assessment notice against the
 Law Society and the Bar Council. Interest is payable if the levy is not paid on time. The Minister can issue proceedings against either professional body if the levy is not paid. Regulations relating to the levy are made by the Minister (S 69 in Part 6).
• Minister to be kept informed: The Minister is to be kept informed by the LSRA of developments 
in relation to the provision of legal services by lawyers (S 9).
• Consultants and advisors: The Minister approves the appointment of consultants or advisors to the LSRA. With the consent of the Minister for Public Expenditure and Reform, the Minister approves fees to be paid to committee members, consultants and advisors (S 13).
• Strategic plan: The LSRA’s three-year strategic plan must be approved by the Minister and must comply with any directions, from time to time, by the Minister (S 16).
• Annual report: The Minister can direct the content and form of the annual report by the LSRA (S 17).
• Code of practice: The Minister can request the LSRA to prepare or approve a code of practice or a professional code, and the LSRA shall do so. The LSRA shall submit the
 draft code of practice – a professional code – to the Minister, for consent to its publication or approval, with or without modifications. The Minister’s consent is required for the LSRA to amend, revoke or withdraw approval for a code of practice or professional code (S 18).
• Chief executive: The Minister appoints the CEO of the LSRA
 on the recommendation of the Public Appointments Service, for a period
 of office not exceeding five years, as specified by the Minister (S 19). The CEO of the LSRA is accountable to the Public Accounts Committee and the Oireachtas Committee on Justice. In giving evidence to the committee, the CEO is specifically proscribed from questioning or expressing opinion on the merits of any policy of Government, or on the objectives of such a policy (S 23).
• Finances: All estimates, financial information and accounts of the LSRA are subject to the approval of the Minister. The Minister can appoint any person to examine the accounts of the LSRA (Ss 22 and 23).
• Other reports: The Minister can require reports on specified and other matters, including interim reports (S 30)

We the undersigned call for the Bill to be heavily reviewed in light of our above concerns:

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Karl ShirranBy:
Justice, rights and public orderIn:
Petition target:
Minister for Justice, Department of Justice and Members of the Oireachtas

Petition community:
Concerned Law Students

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