Legal costs report recommends non-binding guidelines for practitioners
A major new report jointly commissioned by the Law Society of Ireland and The Bar of Ireland has recommended a system of non-binding guidelines for legal practitioners as the best means of controlling costs while ensuring fair and equal access to justice.
The independent report was produced by EY and has been submitted to Indecon, the consultancy appointed by the Department of Justice to conduct an economic evaluation of the options to control litigation costs, as well as the Department itself.
It echoes the 2020 report of a review group chaired by Mr Justice Peter Kelly, which said non-binding guidelines would be preferable to a table of maximum costs model. However, the review group was split on the issue and reforms have been delayed while the government conducts further research on the matter.
EY’s report, based on an international benchmarking exercise, a review of past reports on legal costs and analysis of 256 litigation cases from 2011 to 2019, finds that legal costs in Ireland have been overstated and have already declined over the period from 2011 to 2019.
It points out that EU member states which offer consumers lower exposure to costs have significantly higher judicial investment, noting that “if Ireland were to have a similar justice system to the Dutch, it would require an additional investment of €61 per inhabitant, or €305 million on an annual basis”.
The report recommends that non-binding guidelines would not require the establishment of an oversight body, and that the Legal Cost Adjudicators Office could manage the determination and implementation of the guidelines.
Michelle Ní Longáin, president of the Law Society, said: “Our intention in commissioning this report was to obtain conclusive and independent analysis that could assist the discussion on the future direction of legal costs for public benefit. The data shows that awards, legal costs and length of trial are all reducing in the current regime for legal costs.
“The work of the Legal Cost Adjudicators Office, the Kelly report recommendations in respect of practice and procedure, as well as recent judicial guidelines, all point to the continuing reform of the costs regime.
“Of particular interest is the case study contained in the EY report about the use of scale fees at District Court level, last set in 2014. This case study outlines that the impact of set costs penalise parties, and where matters are complex or novel, may in fact make legal representation uneconomical, expanding the unmet legal need.
“Instead, it is our strong view that all users of the courts would be better served by increased investment in judicial resources to facilitate the efficient administration of justice in the public interest.”
Maura McNally SC, chair of the Bar Council, said: “This report is an exhaustive analysis of two options under the Kelly report. It finds that non-binding guidelines pragmatically recognise that each litigation case is different, and so offer flexibility and fairness, as well as speed.
“A rigid one-size-fits-all approach places justice further away from ordinary citizens, and favours those with economic power. Guidelines can bend and flex according to needs of the injured parties and complexity of cases.
“The key issue for citizens – and it’s within the government’s gift – is resourcing of the justice system: case management, judicial resources, support staff. These are important determinants of ultimate costs borne by litigants.
“Furthermore it sets out conclusively that the narrative regarding legal costs to date has been based on incomplete data. The Irish case-data analysed shows that legal fees paid to counsel, and to solicitors has in fact decreased by between 13 per cent and 23 per cent in recent years, while a third of legal costs charged to clients in fact is government levies and duties.”