Shatter Statement on Final Group of Committee Stage Amendments to the Legal Services Regulation Bill 2011

Committee Stage of the Legal Services Regulation Bill Resumes on 12 February

The Minister for Justice, Equality and Defence, Alan Shatter TD, has confirmed that he has circulated today the Government’s amendments to Parts 7, 8 and 9 of the Legal Services Regulation Bill which will be discussed when the Bill resumes Committee Stage on 12 February. These three Parts of the Bill deal with the:

· regulation of new alternative business structures along with new partnership options for solicitors and barristers. These structures will include multi-disciplinary practices or “one-stop-shops” where lawyers can provides services with other providers such as accountants;
· the maintenance of the Roll of Practising Barristers, and
· the transparency, disclosure and other requirements of the new legal costs regime, respectively.

Their completion will bring Committee Stage of the Bill to a conclusion.

Speaking on the circulation of the amendments, Minister Shatter commented “These are the final group of Government amendments to be considered by the Justice Select Committee to enable completion of Committee Stage of the Bill. The Committee Stage amendments will have substantially addressed a number of important issues that arose following publication of the Bill in respect of which there has been constructive and considered engagement. This is a continuing process and I anticipate, arising out of debate at Committee Stage and submissions received, some further refinements and amendments will be proposed by me at Report Stage.”

An overview of the amendments is included below:

Part 7: Alternative Business Structures and Multi-Disciplinary Practices
The proposed Committee Stage amendments to Part 7 of the Bill to be brought forward by Minister Shatter will strengthen the regulatory powers and functions of the Legal Services Regulatory Authority in relation to the new business structures for the delivery of legal services, including multi-disciplinary practices. These provisions build on the relevant working experiences of other jurisdictions such as Australia and the UK and on advices from the Attorney General regarding the regulation, monitoring and operation of such entities. Minister Shatter has confirmed that the key Government amendments he will be tabling are that:
§ The Legal Services Regulatory Authority will be given the necessary and specific powers under which it shall make regulations for the operation and management of alternative business structures including multi-disciplinary practices (MDPs).
§ The Authority will exercise these regulatory powers by reference to the objectives set out in the Bill which balance the interests of legal practitioners with those of consumers of legal services while maintaining the relevant professional standards.
§ A series of safeguards will be clearly set out in support of the proper operation of the alternative business structures with particular focus on multi-disciplinary practices – lawyers in these entities will, of course, also be governed by the other enhanced conduct and disciplinary provisions of the new Bill.
§ The public consultation process regarding the operation of multi-disciplinary practices and legal partnerships provided for in the published Bill will now take place within 6 months of establishment of the new Authority (i.e. not 18 months as in the published Bill).
§ As prescribed by the Bill when published, the Report of the public consultation process, once completed, will be presented to the Minister who will have it laid before the Houses of the Oireachtas. The Minister will also furnish the Report to Cabinet along with details of the proposed date of commencement for the new legal business models, including multi-disciplinary practices.
§ The Legal Services Regulatory Authority, as an independent statutory authority, will consider the recommendations in the report derived from the consultative process when framing the Regulations that it will be making regarding the operation and management of MDPs and Legal Partnerships.
§ There will also be a separate public consultation process in relation to the manner in which a barrister may hold clients’ monies, and, in relation to the retention or removal of the current restrictions on barristers receiving instructions on a contentious matter directly from a person who is not a solicitor. This consultation process is now to be completed within 12 months of the establishment of the new Regulatory Authority (the Bill as originally published prescribed a period of 18 months) with the relevant Report laid before the Houses by the Minister within 30 days.

MDP Safeguards in Part 7
Minister Shatter’s safeguard amendments in relation to multi-disciplinary practices (MDP) will cover:
· Notification to the new Legal Services Regulatory Authority of commencement/ cessation by an MDP;
· The liability of partners; the sharing of fees or income between legal practitioner partners and other partners and the prohibition of certain persons being partners;
· The strengthening of the powers and duties of a ‘managing legal practitioner’ in an MDP (the managing legal practitioner will be the person with statutory obligations to oversee the delivery of legal services by the MDP);
· Safeguards, including financial and insurance safeguards, for legal services in the operation and management of the MDP; and
· Powers of the new Authority to intervene where there are regulatory breaches – such an intervention can, where appropriate, include the securing of a High Court order directing the cessation of provision of legal services by the MDP.

Part 8 – Amendments Relating to the ‘Roll of Practising Barristers’
In line with amendments already made at Committee Stage to Part 6, Part 8 of the Bill will now make the Legal Services Regulatory Authority responsible for maintaining the ‘roll of practising barristers’. This is a policy decision based on the fact that the Bar Council does not wish to be held responsible for maintaining a roll and, consequently, collecting a levy payment from those barristers who, due to the changes being brought in by this Bill, will be permitted to practise as barristers without being members of the Law Library. Non-Law Library members such as in-house counsel, partners in a legal firm or MDP and other sole practitioners who do not fall within the Bar Council’s remit will, upon enactment, be permitted to practise with full rights of audience etc. and to hold themselves out as practising barristers. This also fills a current gap in regulation where practising barristers who are not members of the Law Library are concerned. However, this Part of the Bill is also being strengthened to ensure that unqualified persons and persons whose names are not properly on the Roll of Practising Barristers will face sanction if they attempt to so practise. These amendments are in effect equivalent provisions to those that already apply to solicitors under the Solicitors’ Acts.

Part 9 – Amendments Relating to ‘Legal Costs’ and Schedule 1.
As a core policy component of the Bill, Part 9 sets out an array of legal costs transparency and disclosure provisions that better balance the interests of legal practitioners with the consumers of their services. This approach informed the published Bill and has been carried over in the Committee Stage amendments. The result is that clients will be better informed about the costs of their legal transactions and will be kept up to date on any developments in their case which may have additional cost implications for them. The Committee Stage amendments also take account of legal advices as well as submissions received since publication of the Bill from those with expertise in this area.

A definition of the term ‘disbursement’ will be provided by amendment as there is none in statute at present. Another set of amendments will bolster a legal practitioner’s obligation to try to resolve disputes concerning bills of costs before applying for legal costs adjudication. The client will be made aware of the relevant time limits and that the ‘clock will stop ticking’ for the duration of an attempt to resolve a dispute in this less cumbersome manner.

A key amendment provides clarity in relation to the application of this Part to the adjudication of legal costs by County Registrars – there had been some ambiguity about this aspect following publication of the Bill. The new Office of the Legal Costs Adjudicator will replace the current Office of the Taxing Master only and the status quo will continue in relation to County Registrars, their limited taxation functions (‘party and party’) and their relationship to the Circuit Court. The only change in relation to County Registrars is that they will be required to keep a public register of their determinations and will, in their own adjudications, be guided by the Principles Relating to Legal Costs set out in Schedule 1 of the Bill which will also have some amendments made to it during Committee Stage.

An amendment is also being proposed to provide for a ‘filtering system’ whereby certain issues already determined by the Legal Costs Adjudicator can be briefly revisited at the request of either party to the adjudication in an attempt to resolve it there and then, thus negating the need to refer the matter to the High Court. It is felt that such a filtering system, which is in fact already in place, should be carried over into this Bill in order to ameliorate the number of High Court applications.