TDs will tonight debate the second stage of the Legal Services Regulation Bill, a set of reforms for the legal system introduced by justice minister Alan Shatter.

Here, the director general of the Law Society argues that reforms are necessary, but the bill must be amended – as it stands, it would undermine key principles of democracy.

IRISH READERS OF the Wall Street Journal may have been surprised recently to see reference, in that globally influential publication, to concerns about the future independence of the legal profession in Ireland.

The issue of 5 January 2012 contained a report on regulatory reforms that “threaten one of the core principles of the legal profession: regulation independent of the executive branch of the state”.

The report was of a letter written by the President of the American Bar Association and the President of the CCBE to the Managing Director of the International Monetary Fund, Christine Lagarde. Ms Lagarde, who is a former chairman of global law firm Baker & McKenzie, was asked to pass on their concerns within the IMF, and to her counterparts in the European Commission and the European Central Bank.

In a separate letter, Marcella Prunbauer-Glaser, President of the CCBE (which represents more than one million lawyers in Europe through its member bars and law societies in 42 countries) expressed her concerns on 11 January to both Taoiseach Enda Kenny and Minister for Justice Alan Shatter. In the final sentence of her three-page letter, she said:

“At present, the CCBE considers the bill to constitute a grave threat to the independence of the legal professions in Ireland and, consequently, a threat to the rule of law.”

Ms Prunbauer-Glaser was one of the very distinguished group of national and international speakers who addressed an audience of 600 in the Dublin Convention Centre on 5 December 2011 on the need to defend the profession’s independence.

Numerous reports have now appeared in international legal journals about what the Gazette of the Law Society of England and Wales has described as “growing international concerns” on this issue.

‘The bill is not perfect’

“The bill is not perfect,” Minister Alan Shatter acknowledged when he met with representatives of the Law Society at his office on 16 January 2012. He confirmed that he intends to bring forward amendments at committee stage so that “certain aspects might be improved”.

However, he did not specify what precise amendments he intends to bring forward. Until the bill’s committee stage is concluded, therefore, the final form of the Legal Services Regulation Bill 2011 hangs in the balance.

In his speech at the second-stage reading of the bill on 16 December 2011, the minister denied that there was any ‘hidden agenda’ with regard to ministerial functions or appointments under the bill. He said he was “happy to invite any constructive suggestions that might enhance the bill’s regulatory framework in this regard within the Government’s stated policy objective of independent regulation”.

At the two-hour meeting with the minister and his officials, the Law Society was represented by the president Donald Binchy, myself, and members of the Society’s task force on the bill: Michael Quinlan, Kevin O’Higgins, Mary Keane (deputy director general) and John Elliot (director of regulation).

Beginning with a welcome for the many elements in the bill that the Society supports (45 of the bill’s 123 sections present no obvious problems), the Society then set out its areas of concern, beginning with its chief concern – that the bill, as published, represents a real and dangerous threat to the continued existence of an independent legal profession in Ireland, with incalculable consequences for such fundamental democratic principles as the separation of powers, access to justice and the rule of law.

Government control

Whether intentionally or not, in the Society’s view, the bill as published contains a blueprint for Government control of the legal profession. To be a truly independent regulator, the proposed new authority must be made free of the potential for control by the Government, in addition to being free of the potential for control by the profession.

The Society also raised its concerns about the absence of any proper controls on the potential cost of the proposed new regulator. This was a major and legitimate concern for a profession that is suffering severe economic distress due to the depth of the continuing recession. It was proposed that the cost of the proposed new regulatory model should be limited, at most, to the cost of the current model. Measures to control costs should be written into the legislation.

The bill appeared to envisage that the solicitors’ profession would retain the responsibility to make contributions to, and payments out of, the Compensation Fund. The fund was being left with the Society for these two purposes. However, it seemed that the power to police compliance with the Solicitors’ Accounts Regulations – thereby controlling the risks to the fund – was to be transferred to the new regulator. It would be better policy if the responsibility to police the fund were also left with the Society, where there is the expertise and the incentive to do it well, in the interest of both the profession and the public.

Fair procedures

The Society also expressed concern that some of the fair procedures in relation to complaints, which are built into the current system, appear to have been omitted from the bill. Also, the legal difference between misconduct and inadequate professional services needs to be maintained.

The Society made a great many points about numerous other aspects of the bill. The minister asked that these, and all other suggested amendments, be communicated to him in writing, which the Society is in the process of doing, and he promised to give them all due consideration.

One major omission, in the Society’s view – from the bill’s section on structures – was any reference to limited liability partnerships or to limited companies. The Society, as so often previously, urged legislation to permit solicitors’ firms in Ireland to practise through these 21st century business models as they do in most other common law jurisdictions.

Taoiseach’s assurance

Prior to a dinner in Mayo on 3 December 2011, Taoiseach Enda Kenny invited Council member Kevin O’Higgins and myself to brief him on the Society’s concerns in relation to the bill.

He assured them privately, and then said publicly, to 100 or more guests at the dinner:

“This bill will not be bulldozed through”; and “The only decision taken by the Government in relation to this bill was to publish it.”

In a preliminary report on the bill, the Irish Council for Civil Liberties says:

“As it is currently drafted, the Legal Services Regulation Bill creates the Authority as a creature of the minister/ Government and is inimical to the rule of law.”

It concludes that: “the appointment of personnel to the Legal Services Regulatory Authority should be carried out by an independent body”.

The Law Society believes that significant amendments are necessary in order to ensure the future of an independent legal profession in Ireland, and with this to safeguard essential principles of democracy.

Ken Murphy is the Director General of the Law Society.

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