IMF deal can change Irish legal system for the better Post author By Colin Scott Post date December 13, 2010 An article by Eoin O’Dell, Trinity School of Law explains how. You can read it here. Categories In Bailout, Competition policy, Prices, Regulation Tags Competition, Legal Profession, Regulation 23 Comments on IMF deal can change Irish legal system for the better By Colin Scott Colin Scott is Principal, UCD College of Social Sciences and Law and Professor of EU Regulation and Governance at UCD. He is a Co-Editor of Legal Studies (Wiley-Blackwell). View Archive → ← The EU Commission’s View of Ireland → Sargent: Ask Olli Rehn About the Minimum Wage 23 replies on “IMF deal can change Irish legal system for the better” I have absolutely no doubt that the legal profession will find many ways to slow this one down. At a time when the rest of the world is trying to force lawyers to move away from time based billing to fxed fees to reduce transaction costs we will be moving towards time based costs. Good for lawyers anyway! We are also told there is not enough competition at a time when qualified solicitors cannot get jobs and approximately 100 law firms are expected to have to shut down for good over the coming months as tax and insurance premia fall due. We are also heading for England & Wales style conveyancing and all the problems that has caused, particularly in relation to claims and risk premia. This is welcome because it will compound the cost of doing legal business and therefore increase the cost tot he consumer. In the meantime, the Revenue and others continue to ask accountants and lawyers to do more and more of their work and take on more and more liabilities. This is having the desirable effect of increasing transaction costs for the consumer as repetitive specialist tasks are outsourced to generalists who must insure against any errors. It is a scandal that the cost of recourse to the law is too high for the average man/woman. People who have been blatantly wronged cannot afford the cost of pursuing their case in many instances. However, the measures which are being introduced are aimed at creating competition at a time when competition is already cut-throat. I think it would be better if the processes of making bringing cases were made easier so people could make the case without a lawyer as many cases are decided on the facts alone. Similarly, a person might have to pay a lawyer to be in Court for a full day for a 15 minute application. This is hugely inefficient and the lawyer, the witnesses and other parties (e.g. Gardai) would all surely prefer to be doing other productive work rather than waiting for a court list to be dealt with. Who pays for this waste? The consumer. Former Supreme Court Judge Donal Barrington has offered a simple and effective solution, based on his own experience – he points out that the State is a massive buyer of legal services (as zhou says above), yet it happily pays out way over what is necessary for both solicitor and barrister services. He says they used to set and stick to a reasonable fee for legal services in years gone by. Now he thinks that they regard the hourly fees charged by the large commercial firms to their multinational commercial clients as a kind of benchmark for routine State work. Meanwhile when they hire barristers they no longer offer a reasonable fee on a take it or leave it basis. Old ways are best sometimes? The Attorney General’s Office could fix this tomorrow he reckons. This is my take on his comments made during his guest appearance on TV3’s Tonight with Vincent Browne last year. The state has at least three ways of reducing the deadweight costs around service provision in the very necessary legal business. (i) Reduce the complexity & inefficiency of the processes. This is – I believe – zhou’s main point. (ii) Increase the ease with which people can organise to provide services. This is the IMF’s approach. (iii) Become an effective and even a cheapskate purchaser of legal services. All steps are useful and necessary. If the first two were implemented then number three would probably be less critical. The fact that new and more complicated legislation has been the solution to every problem for the last 20 years means that you cannot now get rid of lawyers. The public sector, and particularly the Gardai, have no capacity to apply or enforce half the legilation they are responsible for. The private sector will soon be facing the same problem as they become more and more reticent about paying the fees of those nerds who actually know what the law and regulations are. Only corporations who can fund specialists will have access to the necessary expertise. Good for competition? Good for the economy? I don’t think so. @all This is truly wonderful news – more and more lawyers is precisely what this society needs right now – the Vichy-Bank Regime must be protected at all costs, and speaking of time and tribunals/tout prices one suspects an inverse relationship with the number of legal eagles – ex AGs, ex ECs, ex Ministers, exFF advisors, Pining PD advisors, Gangland Fellow travellers, – available. But Why? There is no white collar crime in Ireland – you couldn’t find a white collar in De Joy if you took a bull-dozer to it and sifted the rubble with a fine-tooth comb – so the purpose of all these lawyers must be to keep all the white collars on the NeuDAZ as they swan off into the sunset …. and pack another couple of hundred ODSerfs into De Joy. And then one has NAMA, and more NAMA, and yet more NAMA probably by video-conference from Lausanne, Rio, New York, ….. Could do with a couple of thousand IP Lawyers … Tags Competition, Legal Profession, Regulation Hello Legal Profession. I believe you haven’t been introduced to either of these 2 gentlemen. There’s a joke about the US political system and voters’ impression of same. DC is a whorehouse and once every 4 years voters get to choose the piano player. In the case of the Irish Legal system, they don’t even get to vote on the music. There are many things wrong in the legal profession but training greater numbers to become solicitors and barrister isn’t the answer imo. There are approximately 1200 unemployed solicitors in Ireland. A small number of these May set up and offer reduced prices but most won’t because the cost of professional indemnity insurance means that a solicitor would have to take in about €40k in fees just to compete with jobseekers benefit and that would be without any secretarial or book keeping support whatsoever. the reality is that far from entering the market as competition for existing firms the majority of the unemployed solicitors are looking for entirely new careers and regretting the day that they put law on the cao form! @Hugh The third option could be implemented tomorrow. I don’t understand the argument in favor of allowing barristers to form chambers. I see the comp authority think it will allow barristers to pool and thereby reduce costs and therefore encourage lower fees. This sounds like nonsense to me. It won’t reduce costs significantly and will act as a HUGE barrier to entry. In England, getting into chambers is difficult. It is also difficult to get tenancy when you do get in. In Ireland it is much easier to start up as a barrister, but much harder to get going. The state could reduce how much it pays for legal advice. However, in some instances this could be penny wise pound foolish. There is a reason why big companies and wealthy individuals tend to hire the best legal advice. The cost of losing a case often dwarfs the cost of the legal advice and if you win the other side often pays a large chunk of your costs. I wanted to add that in the Past few months the law society vacancies website has been carrying adverts for several firms offering work placement programmes where any unemployed solicitors who have been out of work for 3 months or more can apply for 9 months work – no wages, just your jobseekers benefit. These are advertised as though it was a properly paid job with competitive process in which the proposed “employer” sets out the type of experience etc that would be advantageous etc. Reform gets a mention but it will be 5 years and an Argentina style collapse that will prove the real catalyst for changes to the legal hegemony. White collar crime WCC needs to be prioritised. It is leading us towards a 200bn debt burden on the people of Ireland. It makes bank robberies and drug dealing seem almost incidental activities. Many of the laws should be simplified, communities should be at the vanguard of the dispensation of justice and the revolving door should be immediately stopped as should automatic remission of jail time. Tribunals should be halted, and lay “judges” should be appointed to hear simple, repetitive, cases which should include many of the habitual crimes committed including some criminal charges relating to drugs and alcohol abuse. In any event, these would become far less repetitive if we had three strikes and you are not out! Many fines and white collar crimes should be dealt with by way of community work/service. Judges preaching that nobody is above the law should not be above the law themselves which they are at present. 10 years should be the maximum any judge be allowed to sit on a bench, then they should have to returned to the body of the court room or retire. “It requires the government to introduce legislation to remove restrictions on trade and competition”. Ultimately, only economic collapse changes what years of reports lying on dusty shelves can ever achieve. The reform, if it happens, will be in proportion to the collapse. I was struck by Colm McCarthy saying that he could not get his hands on one of his own reports because it was now covered by the Official Secrets Act, not only do we not implement reforms we then go and make sure they will never, ever, be implemented by the simple expedient of a lock and a key. I know some people don’t like hearing this, but increasing the number of legal training providers is a non issue with respect to barristers. The vast majority of people who sit the bar entrance exam pass. The vast majority of people who take the course pass. 50 % of a graduating class (probably more in this climate) won’t be a barrister 5 years after graduation. They never get enough work. The problem is not the fact that too few people are coming down to the bar, and even if it was, and extra training schools reduced the price of the course, this wouldn’t significantly reduce the start up costs of becoming a barrister, wouldn’t increase the chances of getting going at it, and therefore wouldn’t significantly increase numbers. It may be a good idea, but it is of almost no importance in terms of making any real changes. Christy, the pass rate for the Barrister at Law program is 50% or so at the moment. Other than that- you are correct, as a barrister one should only expect to pay income tax after 5 – 7 years practice… @jm The pass rate after repeats is much higher as far as i am aware – at least it was a few years ago The fact that the losing side has to pay the winning side’s costs in litigation has a distorting effect on the cost of legal services. It means the effective purchaser of the legal services has no say in the level of costs. Instead, the Taxing Master adjudicate and fix the costs which the losing side has to pay. As the recent PIAB case illustrates, the winning side often submits bills based on what they think the Taxing Master will allow rather than by reference to work actually done. The Taxing Masters operate in a non-transparent way. It is very difficult to secure copies of their rulings. The fact that fees are calculated by reference to global fee, i.e. a brief fee for a barrister and a “general instructions” fee for a solicitor, makes it very difficult to ascertain what fees are being allowed for. The fact that barristers cannot accept instructions directly from the public, and the senior/junior divide at the Bar, means there is overmanning in cases. Many High Court cases involve 3 lawyers sitting around in court, when one lawyer could effectively run the case. Very often, the junior barrister is missing for part of the case, doing other cases at the same. Will barristers have to carry professional indemnity insurance if they are going to set up chambers and deal with clients directly? That should put a few hundred out of business and increase fees anyway. @zhou barristers do carry insurance but I have heard that because they don’t deal with clients directly, never hold clients funds and are essentially immune from suit for what they say in court, premiums are much less than for solicitors. Therefore Id agree that changing those features could well increase premiums @gadge I would agree that the taxing master and the costs system is an issue. I suppose one view is that fairness demands that a party who wins ought not to have to pay his costs. There are also equality of arms issues. Junior counsel may be off doing other work, but a large chunk of the work done for a case is done by the junior counsel. Seniors however are real barristers in that they take witnesses and actually run the case. Having seniors do all the preparatory work may not reduce costs as they charge more for their time. Having juniors sit in court doing nothing is a waste, but it is also a simplification. As far as I am aware it is standard for a senior to consult with a junior both during and at breaks of a case to see if anything has been missed or should be stressed etc Irish lawyers have been knee deep in every con, scam, scandal and scheme in this country for the last 40 years. We have Gardai running amok all over the country, untouchable bankers and developers, internment and secret courts, exploitation of trainees, and most cases are decided in the law library rather than open court. Things aren’t working and the people who claim to be the guardians of the rule of law haven’t been doing their job. What possible justification is there for leaving the national legal system in the custodianship of the current guild? It is not proper for our courts to be run by organisations which were founded in the middle ages, and who by and large still live in them. The roof of an antiquated courthouse in Tipperary collapsed recently; A rather succinct summary of the entire Irish legal system. @christy: ” As far as I am aware it is standard for a senior to consult with a junior both during and at breaks of a case to see if anything has been missed or should be stressed etc” Why don’t we buy them tape-recorders instead, so they could review the case themselves? I gather some of our learned brethren have been losing money on property, so they may not be able to afford to buy their own technology. bjg There’s a glaring ommision here. If the supply of solicitors/barristers becomes effectively unlimitied, in the long run, litigation will increase. The capacity of our judicial system will not. The correlation between numbers of lawyers and injustices averted is complicated if not perverse. In truth, there is no demand for the ‘deregulation’ of legal services. However, cheap, hungry and plentiful negotiators are always useful in an economy that is being asset stripped. Lawyers who are personally liable to their clients and dependent on their reputation are (a) a counterweight to the moral hazard of agents with limited liability and (b) a mode whereby information asymmetries for parties involved in infrequent transactions can be lessened. Comments are closed.