Speech by An Tanaiste at Regulating the Professions in Ireland conference

Ladies and Gentlemen, I am glad to be here this morning to participate in this conference on the Regulation of the Professions in Ireland and I would like to thank the conference organisers, McDowell Purcell Partnership, for affording me the opportunity to address you. Looking around the room it's clear that the professional bodies that are either already the subject of statutory regulation or may be in future are well represented.

As a member of one of those professions myself, I can readily appreciate that the reputation of the professions and the quality of service provided by them to their clients are inextricably linked to the regulatory infrastructure. Such regulation does not in itself impose restriction but, rather, sets clear standards in respect of the services provided by the professions, which in turn helps build client confidence.

 

Legal Profession

I would like to first turn to an area close to home. The legal profession has traditionally been organised in Ireland in two branches, solicitors and barristers, each, as I am sure you are aware, self- regulating. A fundamental part of that self-regulation is concerned with the maintenance of high professional standards and the investigation of allegations that those high standards have not been met in particular cases.

While, on the whole, the self-regulating processes operate satisfactorily, there naturally remains the possibility that a person who makes a complaint against a lawyer may get a result from those processes that does not accord with his or her view of the matter. Their sense of dissatisfaction may sometimes be coloured by the perception that the self-regulating process has favoured the professional over the complainant. This perception can arise simply because the process is self-regulatory regardless of whether or not there has been actual bias in a particular case.

I am in the process of strengthening the mechanisms for dealing with complaints against both solicitors and barristers in the Civil Law (Miscellaneous Provisions) Bill 2006. This Bill provides for the establishment of a Legal Services Ombudsman who will oversee the handling by the Law Society and Bar Council of three classes of complaints against solicitors and barristers, namely inadequate services, excessive fees and misconduct. The key function will be to provide a form of appeal for clients of solicitors and barristers who are dissatisfied with the outcome of a complaint made to the Law Society or Bar Council.

The Ombudsman will also have a more general oversight role for those complaints procedures by examining a selection of complaints files each year taken on a random basis. Access to the professions will also be monitored by the Ombudsman who will report to me and the Oireachtas on the adequacy of numbers admitted annually to each profession.

To be effective and to have the confidence of its users, any complaints mechanism must not only be above suspicion but must also be seen to be so. The introduction of the Legal Services Ombudsman as an extra overseeing layer to the present self-regulating mechanisms will provide the necessary independent scrutiny to assure the public of the effectiveness and trustworthiness of the complaints process as a whole.

With self-regulation, division into two branches and a clear demarcation of functions, the legal profession is always vulnerable to accusations of restrictive practices within each branch and between them. The legal profession is not unique in this regard. High cost is usually the underlying basis for claims of restrictive practices in any of the professional services, whether it is accountancy, architecture, veterinary medicine or the legal service. This leads to calls for deregulation to remove all competitive restraints resulting, in theory at least, in lower consumer costs and higher quality service.

Self-regulation must deliver the highest standards of professional integrity for the protection of clients. There is a public interest in ensuring a high level of confidence in the manner the professions regulate their affairs. In this context the Competition Authority is in the midst of a review of each of the professions including the legal professions. Its final report and recommendations on competition in legal services will be published later this year.

 

Legal Costs

Historically legal fees and costs in the area of litigation have been largely unregulated save that bills of costs may be referred to the Taxing Masters for assessment. I believe that there is a lack of public confidence in this system and a concern that fees charged in relation to litigation are unpredictable and too high. This is why in late 2004, I established the Legal Costs Working Group chaired by Paul Haran, a former senior civil servant - to examine the issue of legal costs.

In particular, I asked the Group to examine the present level of legal fees and costs arising in civil litigation and to make recommendations which would lead to a reduction of costs associated with such litigation, would improve accessibility to justice and provide for greater transparency.

The Group finalised their report late last year and its recommendations were endorsed. I subsequently established an Implementation Team to take the Haran recommendations forward and I hope to have their recommendations very shortly.


Financial Regulator

In 1999, I submitted to the Ministers for Finance and Enterprise, Trade and Employment the Report of the Single Regulatory Authority Implementation Advisory Group. The report recommended, inter alia, that a single regulatory authority for financial services should be established for all prudential supervision in the financial sector.

I believe the ensuing of the Financial Regulator, which involved the enactment of two major pieces of legislation, the Central Bank and Financial Services Authority of Ireland Acts 2003 and 2004, has resulted in significant change in the financial services sector.

 

Property Services

One area of Irish life in which both the finance and legal professions operate is that of buying and selling property. The property industry has grown at a phenomenal rate over the past number of years and the purchase of property, especially the purchase of residential accommodation, is one of the most important financial transactions that many people will enter into during their lifetimes. It is in their interests, and therefore in the public interest, that the property services sector operates to high standards of probity and diligence and that its services are provided in a professional, efficient and transparent manner.

In July 2004, against a background of a considerable level of public concern about specific selling practices in the property industry and apparent deficiencies in regulatory and supervisory arrangements in respect of service providers, I commissioned the Auctioneering/Estate Agency Review Group to examine the licensing and regulatory requirements for property service providers going forward.

The Group's report was published in October 2005 and at that time the Government approved one of its key recommendations, the establishment of the Property Services Regulatory Authority, to assume responsibility for the licensing and regulation of property service providers, including auctioneers, estate agents and property management agents.

Legislation which will establish the Authority on a statutory basis and give effect to other key recommendations is currently being drafted in my Department and the Government Legislation Programme provides for publication of this legislation in 2007. In the meantime, an Implementation Group is in place and working to assist and advise on preparations for the new Authority.

It is intended that the functions of the Regulatory Authority will, in addition to its licensing function, include an investigative function supported by a range of sanctions, ranging from revocation of a licence, or its suspension for a period, to the issuing of a reprimand or caution.

The Regulatory Authority will also have extensive investigative and enforcement powers in relation to standards to be observed in the provision of property services.

I should mention that one of the notable developments in the property market in recent years has been the increasing popularity of multi-unit apartment complexes. According to the Review Group, who recommended that property management agents should be licensed and regulated by the new Authority, these complexes account for about 50% of new housing accommodation in the Dublin area and up to a third nationally.

Purchasers of apartments in multi-unit complexes become members of a property management company. This company is subject to company law requirements and is legally responsible for the maintenance and upkeep of the complex, including common areas and facilities, such as lifts. While the members making up the management company may decide to manage the complex themselves, it is common for the company to engage a management agent to, for example, deal with repairs, keep accounts and pay bills.

In order to ensure that complexes are properly maintained and to guard against claims arising from unsatisfactory work or neglect by management agents, it is in the interests of management companies that such agents are of good character, have the necessary qualifications and have professional indemnity insurance.

My Department is also preparing legislative proposals to provide for powers for the new Authority to deal comprehensively with the issue of estate management charges and management companies for apartments and housing estates.

These reforms are intended to improve consumer confidence in the property services market by promoting increased transparency and strengthening safeguards, including improved redress mechanisms and protection of client funds.

 

Forthcoming Regulation

It could be argued that the importance of regulation of the professions was never more appreciated than at this present time. I understand that the Pharmacy Bill will extend to Pharmacists, for the first time, fitness to practice provisions.

The Health and Social Care Professionals Act 2005 provides for the establishment of a system of statutory registration for 12 health and social care professions. This is the first time that fitness to practice procedures will be put in place for these professions on a statutory basis and it will allow members of the public to be confident that health and social care professionals providing services are properly qualified, competent and fit to practice.

Further legislation will follow for medical practitioners and the nursing professions. Indeed, the issue of complaints and inquiries in relation to the medical profession is under review by the Department of Health and Children in the context of a new Medical Practitioners Bill, currently in preparation. I understand that my colleague Minister Harney intends to present the Bill to the Oireachtas before the end of the year.

 

Summation

In conclusion, I believe that customers are entitled to expect a high and consistent level of service from the professions and that those providing services are entitled to expect to compete on a level playing field. The best way of ensuring delivery on these expectations is, I believe, the maintenance of a balanced approach to regulation of the professions.

 

10 November 2006