Sunday, January 22, 2006By Vincent Browne
Barristers have taken most of the flak for the correct perception that legal costs are a massive rip-off.
But the blame, or at least most of it, actually rests with solicitors.
One Galway solicitor tried to overcharge the state by a factor of three, amounting to more than €1.5million. Several ‘reputable’ Dublin solicitors have been found to be at the rip-off game as well. To a large extent, the state itself has been complicit in this for decades.
One of the main problems is that solicitors are required to itemise their costs only in the most perfunctory way. They have to itemise their ‘outlays’ (third party costs) and barristers’ fees but, when it come to the work done by themselves, there has been no requirement to specify precisely - or even in broad detail - the work involved and the charges for that work.
Instead, they have been permitted to lump all this together under the heading ‘instruction fee’, which is always the biggest item by far, often comprising more than 80 per cent of total costs.
The High Court and Supreme Court have gone along with this rip-off mechanism for years - and, as a consequence, the taxing masters have had to follow suit. Taxing masters are the legal officials who adjudicate in disputes on legal costs. During all this, successive governments have stood idly by, one arm longer than the other, doing nothing.
To be fair to him, Michael McDowell has prompted an investigation of this situation by a legal costs working group, chaired by Paul Haran, the former Secretary General of the Department of Enterprise, Trade and Employment. An excellent report has been published and will be followed, we are promised, by legislative and administrative action.
But a few curious issues arise in relation to the report.
For instance, it recommends that, from now on, cost guidelines on legal fees be issued (and followed) to take account of the ‘‘appropriate hours’’ expended on a case, the complexity of the proceedings and the level of the court in which the case is heard. I find this surprising.
If a solicitor is to be remunerated on the basis of the appropriate time expended on a case, isn’t that enough? Why should the complexity of the case be a factor? If the case is extremely complex, then the number of appropriate hours expended will be greater, so why should there be double allowance for this?
And if the case is complex, involving a great number of appropriate hours, why should it matter whether it is a Circuit or High Court case? The work is the same whichever it is. Alternatively, if the case is in the Supreme Court and the work involved is very little, why should solicitors be paid extra because of the level of the court?
Another factor that should be taken into ac count is whether the solicitor needs the involvement of counsel or not.
If the solicitor is not capable of handling the case, then allowance should be made for that in the fees. The client should not be required to pay the full whack for both a solicitor and a barrister. Anyway, if a barrister is engaged, this will necessarily involve less work for the solicitor. I wonder how often this is taken into account in the computation of ‘instruction fees’.
Another anomaly is the arrangement whereby the solicitor is paid full whack for having a junior secretary accompany a barrister to court.
What is the point in having anybody from the solicitor’s office there at all if a junior clerk suffices as ‘cover’?
The report is very good at explaining why market mechanisms don’t operate in relation to legal fees. The main reason is that - in the majority of cases - clients expect that the other side will have to foot the legal bill. There is no pressure - or less than the usual market pressure - on the client to keep costs down.
Another reason is that many solicitors refuse to comply with the requirements of Section 68 of the Solicitors (Amendment) Act 1994, which stipulates that solicitors, on taking instructions to provide legal services, ‘‘shall provide the client with particulars in writing of (a) the actual charges, or (b) where the provision of particulars of the actual charges is not in the circumstances possible or practicable, an estimate (as near as may be) of the charges, or (c) where the provision of particulars of the actual charges or an estimate of such charges is not in the circumstances possible or practicable, the basis on which the charges are to be made’’.
The Oireachtas clearly intended that the practice of keeping the client in the dark on charges until the case had concluded should end. A great number of solicitors don’t bother with this statutory requirement, yet the courts do nothing. It’s a cosy club where the interests of the populace are an aside, if not an irrelevance.
The whole shebang is a huge conspiracy against the ordinary person. As the Haran report says, the high and unpredictable nature of legal costs means that less well-resourced citizens cannot engage in litigation until they can find a lawyer willing to act on a ‘no foal, no fee’ basis.
This no foal, no fee arrangement will operate - when it operates at all - only where the other side in a case is well resourced.
If both the plaintiff and defendant are of modest means, then no chance.
The costs and risks of going to court are enormous. Parties risk losing their house, sometimes even when they win a case, as the losing side may not be able to pay the legal costs of both sides.
Curiously, the working group doesn’t address itself to the fundamental inequity of the system which it has identified.
It is as though the basic unfairness of the legal system is unreformable.
