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Irish Law Society Slams Competition Authority Report

by Jason Gorringe, for LawAndTax-News.com, London

19 December 2006


Ireland's Law Society has slammed the recent publication by the Competition Authority of a report on the need for reforming the Republic's legal services sector.

In the report, published last week, the Competition Authority concluded that the market for legal services is permeated with "unnecessary and disproportionate restrictions on competition", and is in need of substantial reform.

The Competition Authority went on to recommend comprehensive new legislation – a Legal Services Bill – to address the competition concerns identified in this report.

The legislation would establish an independent Legal Services Commission with overall responsibility for regulating the legal profession and the market for legal services. The Legal Services Commission would be an independent, transparent and accountable body, involving a wider group of stakeholders than the current model of self-regulation.

The Law Society and the Bar Council would continue to have a role in the day-to-day regulation of the profession but would be required to separate their representative and regulatory functions.

Currently, the Competition Authority argued, the Law Society and Bar Council face a conflict of interest (similar to that separately identified in the UK) between their mandate to represent the interests of their members and their role in protecting consumers and the public interest.

It suggested that this conflict of interest has resulted in rules and practices that serve the interests of the legal profession rather than those of consumers.

However, the Law Society and other professional groups have condemned the report as outmoded, arguing that the more than five years taken to compile it have meant that in many cases, it has been overtaken by circumstances, or the practices outlined in the recommendations have already been put in place.

In a statement, published last week in the Irish Independent, the Bar Council drew attention to one such instance, welcoming the report, but observing that:

"The recommendation that a legal services commission be created has been overtaken by events. The government has proposed a legal services ombudsman with the publication of the recent Civil Law (Miscellaneous Provisions) Bill. The legal services ombudsman was in fact a key proposal of the Bar Council to the Competition Authority, proving the benefit of ongoing dialogue to the improvement of services. The ombudsman should be set up as soon as the legislation is enacted, and given time to evolve, before further legislative changes are considered."

The Council also warned that allowing barristers to form partnerships, as proposed in the report, could create "mini-cartels", to the detriment of competition in the market.

Meanwhile, in an interview with RTE Radio to discuss the Competition Authority recommendations, Irish Law Society Director General, Ken Murphy announced that:

"There’s...no opposition to reform in the legal profession and in fact, I have to say, that we’ve only just received this report now, we didn’t have a chance to look at it. We will be looking at it in great detail but it does seem to us on a preliminary view that there’s really nothing new in it and it’s hardly surprising given that it has taken five and a half years for the Competition Authority to produce a report that’s less than two hundred pages in length. In fact, frankly if you or I or anybody else took that long to produce a report of that size I think we’d probably be criticised for inefficiency by the Competition Authority."

He continued:

"But the fact is that this report, because it has taken five and half years has been largely overtaken by events, by other people who have been moving more quickly. The Law Society itself has been engaged in a process of reform."

Mr Murphy went on to state that:

"There is no opposition to reform or change as far as we’re concerned, the question is there are issues to do with both competition, which the legal profession firmly believes in, it benefits consumers through lower prices and better standards, it also benefits the profession by promoting efficiency and innovation."

"But unless there is a balance also in terms of the public interest, in terms of protection, and the regulation is established, not by the legal profession but by Government to protect the public interest, that is the balance, it’s a balance ultimately for Government. What the Competition Authority have produced is of interest certainly, will be of interest to Government is of interest to us but we need to see the correct balance being struck in the interests of the consumer and of the public."


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