Legal profession is anti-competitive - watchdog

The Competition Authority has proposed a number of "root-and-branch" reforms of the Irish legal profession that it says could lower charges and improve the quality of service.

The Authority's report into competition in the industry criticises both the Law Society and the Bar Council for presiding over a profession that is "permeated with unnecessary and disproportionate restrictions on competition".

"Overall, the legal profession is in need of root-and-branch reform reflecting the important need to create a modern, system of regulation that is proportionate, accountable, transparent, flexible and reflects the need of consumers," the report states.

Bill Prasifka, chairman of the Authority, said the legal market is "not working to the benefit of consumers".

Chief among the 29 recommendations contained in the report is the establishment of an independent Legal Services Commission to regulate solicitors and barristers.

It also seeks the introduction of the profession of conveyancing, which it says would bring down the price of buying a home and improve the standard of service for consumers.

The report also recommends an ending of the monopoly on educating lawyers currently operated by the Law Society and King's Inns and allowing the public to consult directly with barristers.

Barristers should also be allowed to form partnerships, as solicitors do. They should also be allowed to advertise their services.

The Authority also wants solicitors whose clients want to switch to another solicitor to be obliged to hand over their files and wants the public to be provided with full disclosure of their rights and how legal fees are determined.

It says many clients are not aware of their rights when it comes to legal fees. They are entitled to get an estimate of legal costs from their solicitors, and not obliged to pay a percentage of the value of a property as a fee. It is also illegal for a solicitor to base their fees on a percentage of any compensation received.

The report also claims the practice of barristers charging a fee that is equal to two-thirds of a Senior Counsel's fee, regardless of the amount of work involved in a particular case, is anti-competitive.

On the appointment of Senior Counsel, Mr Prasifka said the title is currently "conferred without any transparency whatsoever". He said a new scheme for awarding the position should be established and it should be made open to solicitors.

The report has been forwarded to Minister for Justice Michael McDowell. Mr Prasifka said the Minister has demonstrated by his proposals for a Legal Services Ombudsman and the establishment of the Legal Costs Working Group that he is "someone who is looking for change".

Mr Prasifka said he was therefore "hopeful" the recommendations would be adopted by the legal profession. If not, he said the Competition Authority has a number of enforcement powers it is "holding in reserve" that it may consider implementing. He did not specify what form this enforcement would take.

According to the Competition Authority, there are 7,242 solicitors and 1,665 barristers working in Ireland. The average salary in the legal profession in 2002 was €164,000.

This afternoon, the Law Society rejected the proposals and insisted there was nothing new in them.

Adding the body was not opposed to change, director general Ken Murphy said many of the recommendations put forward by the Competition Authority were already being addressed.

"It does seem to us even on a preliminary view that there is nothing new in it. There is no opposition to reform in the legal profession or change as far as we are concerned," he said.