Alan Shatter was a reforming minister.
Profile of Shatter’s reforms (Feb 2014). by Kyran Fitzgerald
There are few people who are neutral on the subject of Alan Shatter. Almost by definition, Ministers for Justice stand in the eye of the storm. Usually, they are blown along by events. The murder of Veronica Guerin in 1996 was the defining moment of Nora Owen’s tenure in the department. The report of the Morris Tribunal arising out of the extraordinary behaviour of senior Garda in Donegal had a huge impact during the period in office of Michael McDowell. Security considerations have always ranked high. The temptation is for the serving Minister to spend too much time defending the status quo while fending off demands for improved pay and conditions from some of the most formidable lobby groups in the State. All too often ambitious reform plans get pushed to one side.
When Alan Shatter took office in March 2011, he was certainly not a man bearing gifts. His primary task was to implement a series of cost reductions right across the justice and law spheres, involving a programme of closures of Garda stations and courthouses as well as further reductions in payments to barristers and solicitors in civil and criminal aid. The blowback was huge. Gardaí, many of them carrying large loan burdens from property investments, reacted with fury to measures, outside the Minister’s direct control, aimed at cutting their earnings. Aside from the series of general reductions in pay implemented since 2008, Gardaí have been faced with reductions in overtime. The Minister soon became embroiled in a controversy over penalty points, his own in the first instance. The matter of cancelled penalty points has returned to haunt the Force, in recent months. Cutbacks were a feature of Alan Shatter’s early period in office. The programme of Garda station closures soon enmired the Minister in public controversy. More than one in ten of the stations has disappeared include a couple in the Minister’s own Dublin South constituency. Local demonstrations have been staged but the Minister, with the backing of the Garda top brass, has held firmly to the view that it makes little sense for Gardaí to be inside ageing buildings carrying out administrative work. Locals in suburbs like Stepaside, south Dublin, worried about an inevitable surge in burglaries, beg to disagree and some element of payback has been demanded by the Garda. Shatter has been notably indulgent of Garda Commissioner Martin Callinan’s intransigent defence of “his” force over the penalty points debacle, at the Public Accounts Committee, and long prevaricated over affording the Garda Ombudsman Commission access to the Garda’s pulse computer system, without which the Commission’s work is hobbled.
Meanwhile, the Dublin South TD, who also has the Defence portfolio, has presided over the closure of army barracks too – in Mullingar, Clonmel and Cavan. His willingness to face down local opposition has earned him brownie points at Cabinet, though it remains to be seen whether an electoral blowback could throw his engine into reverse.
If Shatter’s efficiency drive in this area has shredded the nerves of local Fine Gael party worthies ahead of the local elections in May, his moves to shake up legal services, unveiled in November 2011, have won more favour with the ordinary punter – while provoking a firestorm within the legal profession. The Minister’s plan to establish a new Legal Services Regulatory Authority, ending the current system of self regulation of solicitors and barristers and introducing reforms such as multi-disciplinary practices, has the strong backing of the Taoiseach, Enda Kenny – the two men tend to sit side by side in Cabinet and are said to be close, politically. This particular set of reforms answers to a popular demand for a shake-up of two professional bodies which would not be atop any poll of anyone. At a time when the current administration is regularly assailed for acting at the behest of the dreaded Troika, in implementing unpopular cutbacks, implementing a crackdown on professions viewed as greedy, smacks of clever populist politics. Some members of the legal profession have been their own worst enemy. There is universal rage at the huge payouts to lawyers involved in a succession of Tribunals, particularly Moriarty and Flood/Mahon which each will cost around €200m and the fact that over the last eleven years the Attorney General’s office alone (ie not the HSE or DPP) paid €3.2 million to two barristers, €2-€3 million to another seven and a further €1-€2 million to a further 27. The Department of Finance alone paid a staggering €15m to Arthur Cox in the five years up to 2012. There is a perception some lawyers have gorged at the expense of the public purse. Certain law firms appeared to garner spectacular costs from the army deafness actions of the late 1990s, leading to a crackdown on costs by the then Defence Minister, Michael Smith. A surge in personal injury actions led to growing concerns about a so-called ‘compo culture’ that led to the establishment a decade ago of the Personal Injuries Assessment Board by the then Justice Minister, Michael McDowell. Many practitioners regard PIAB as excessively bureaucratic and they claim that ordinary claimants, many with good causes of action, have lost out, but PIAB has reined in to a degree the upsurge in premiums that was threatening business and social and leisure activities across the country. Lawyers insist that the real beneficiaries have been the insurance companies which pressed hard for the changes – the insurers respond that premium levels, in a competitive market, are determined by the cost of claims. While the personal injuries bandwagon was halted, the search for easy profit did not end. Alternative outlets were explored with gay abandon. Some solicitors became directly involved as property investors during the boom years – tempted by a beguiling promise of tax avoidance mixed with capital appreciation, a tasty but ultimately lethal concoction – to the neglect of their responsibilities in the area of compliance. Many of their colleagues are now having to clear up some of the legal mess that resulted from the sloppy practices, particularly in the area of conveyancing, that became almost the norm. Such activities, or inactions, have not burnished the credentials of either profession, yet it must be said that there are also countless lawyers running small local practices and representing small clients who were never caught up in profiteering and have, in many cases, been hit hard, as work has dried up during this seven-year recession. Furthermore the pot is divided among more. In 1998, there were fewer than 5,000 solicitors on the roll, but now there are just under 14,000. The number of practising barristers rose from 1,112 in 1998 to almost 2,500 during the boom years but last year there were only 2,255 barristers in the Law Library.
Reflecting the downturn for lawyers, at its peak, more than 200 newly qualified barristers were joining the library each year, but those numbers have dropped to around 140. Last year 179 barristers left the law library. And the State is driving costs down: over the last few years the State Claims Agency has reduced payment levels by 25% to lawyers for working on compensation claims agains the state.
Scandals, such as those involving Thomas Byrne and Michael Lynn, have hit many innocent solicitor practitioners in the pocket as professional indemnity insurance costs rocketed. While most sympathy should go to the innocent clients, legal colleagues of Byrne and Lynn have shipped collateral damage.
The Legal Services Regulation Bill was first published in November 2011. Its origins lay, in part, in the ‘Final Report on Competition in the Legal Profession’, published in December 2006, by the Competition Authority. It followed previous reports carried out by its predecessor, the Restrictive Practices Commission, and the OECD. The Report, the culmination of a five-year long investigation, was to form the basis of Minister Shatter’s reforming legislation, a Bill whose own passage through the Dáil and Seanad has meandered. The Authority questioned whether the Irish people were getting value for the estimated €1 billion a year that they were paying for legal services. The Authority pointed to “unnecessary restrictions” on entry, monopolies regarding training, a ban on barristers forming partnerships or chambers, the inability of in-house lawyers to represent their employer in court, and failures to provide consumers with timely information. It was critical of the manner of selection of senior counsel, practising barristers at the top of the pecking order. It proposed the establishment of a Legal Services Commission as a regulator of the legal profession. At the time of the Bill’s publication, the then Law Society President, Donald Binchy, claimed that the Competition Authority had “failed to unearth any anti-competitive practices, or to establish that the practice of law in Ireland was conducted in anything other than a competitive environment”. Solicitors in small firms coping with the dominance of the large Dublin firms, with their easy access to lucrative public-sector business disagree. The Society contended that the bill as proposed would allow the Minister to “control the profession and the way it represents its clients”. In particular, the Bill provides for outside regulation of both legal professions via a new Legal Services Regulatory Authority along the lines proposed by the Competition Authority. However, the lawyers argued that the Authority’s members would be appointed and controlled by the Minister. The cost of regulation is to be borne by both professions – their representative bodies contend that this will be excessive. The Law Society did concede that changes are required. According to Mr Binchy (writing in the Law society gazette in December 2011), “the Society recognises the need for greater transparency in relation to the manner in which costs are agreed between solicitor and client”. “The Society also recognises that there is a public demand for a complaints process that is even more independent of the Society than the current system. However, that is a very different concept altogether to removing from the profession the ability to make its own rules and set its own standards”. The Society lined up backing from the International Bar Association, American Bar Association and the Council of Bars & Law Societies of Europe. The IBA Executive Director, Dr Mark Ellis, claimed that the Bill was “one of the most far reaching attempts of a Government to control the legal profession”. And he meant worldwide. Since then, the legislation has proceeded at a leisurely pace. In part, this is due to the challenge of drafting legislation on insolvency and an overhaul of bankruptcy law, viewed as critical to the goal of freeing scores of thousands of people from crippling indebtedness without further nobbling the banking system in the process. Before Christmas, there was a rash of media speculation that key elements of the Shatter reforms had either been watered down, or abandoned under pressure from the Labour party whose links to the legal profession are now almost as ingrained as those of FG, the traditional lawyers’ party. But in the end it seems Shatter prevailed with Labour not wishing to be associated with a rearguard action. The Bar Council has fought a separate campaign against the Bill, claiming that the proposed authority would add between €5m and €7m to the operating costs of the current system. Many barristers consider the Minister – a qualified and formerly high-earning solicitor –to be a studied enemy of the Bar whose proposed structural reforms strike at the sole-trader model and by extension at the long-term independence of the Bar itself. A favourite line is that the current system allows access to the best barristers for the poorest clients but this seems a stretch since, though anecdotes abound of alpha counsel representing the little man, there is a tendency for the best advice to wend its way to the highest-paying big men.
Andrew Dillon, a retired Cork-based former member of the Council of the Law Society, believes that at one time, it was indeed possible for the ordinary person to access the top barristers, but in his opinion, things have changed dramatically in recent years.
“Over the past fifteen years, the fee structure has gone crazy”.
He does credit solicitors such as Ernest Cantillon who spent more than a decade representing Louise O’ Keeffe, the victim of child abuse who finally succeeded in her action against the Irish Government before the European Court of Human Rights.
However, it has become a lot more difficult to persuade people with lucrative practices to take on cases which are long and tedious and which may not generate a decent payout.
Indeed, in his view, it is not reasonable to expect a lawyer with a modest practice and a family to rear, to take on difficult proceedings on a ‘no foal/no fee’ or pro bono basis.
This raises broad issues about access to justice in a ‘winner take all’ environment.
Dillon says that his view on the idea of multi-disciplinary practices has altered. If permitted, they could actually serve as a balance against the dominance of the big legal battalions as they would permit professionals in smaller towns to combine, reducing their overheads and becoming more competitive generally.
Nevertheless, the Fianna Fail Justice spokesman Niall Collins, has warned against the imposition on consumers of what he considers to be the ‘Tesco model’ of legal service provision which was recently inaugurated in England. The supermarket chain is on the verge of entering the conveyancing market.
Speaking on RTE radio, recently the director of the Free Legal Aid Service, Noeleen Blackwell, also warned that passage of the Bill could bring about curbs on access to the finest legal minds. Her concern that the large firms will ‘snap up’ the top talents and that ordinary clients will end up paying the huge hourly rates charged by the large legal practices.
The bad blood between the Minister and the practising barristers extended by late 2011 to encompass the judiciary, many of whom have been outraged by changes to pension arrangements and to a referendum which paved the way for reductions in their pay. This in turn led to the foundation of the Association of Judges of Ireland, a body which has been fronted by High Court Judge and President of the Association of Judges, Peter Kelly, with Supreme Court justice, Adrian Hardiman, playing a hands-on role. Kelly, a widely respected dynamo in the commercial court, castigated a “brick by brick” demolition of the judiciary and has indeed announced his early retirement.
Through much of 2012, relations between the Minister and several senior judges grew increasingly fraught.
The mood was not improved by the decision of the Minister to appoint ten special insolvency judges from the ranks of local county registrars, in a move which some judges appear to believe undermines the status of the judiciary. Eventually, an intervention from the Chief Justice, Susan Denham. brought about a reconciliation – or at least, a restoration of a modicum of civility to the relationship.
In a fascinating development, the Chief Justice – a driver of reform of the court service, in the past – has re-entered the debate by questioning the manner of appointment of people to the Bench. While the establishment, some years ago, of a judicial appointments commission was supposed to have removed the appointment of judges from the political arena, it has been said that the decision, once it is clear the candidate is not an axe murderer, is effectively entirely party political. The Chief Justice has acted in her capacity as Chair of the Judicial Appointments Review Committee, a body actually established by the Minister. One of its more controversial suggestions is the introduction of a requirement that a person serve fifteen years as a barrister or solicitor before being appointed to the Bench.
Minister Shatter has never been a favourite of some more traditionally minded judges, who did not always treat him with due respect when he appeared before them as a solicitor directly representing his clients. Anecdotes abound. Barristers, likewise have not taken kindly to being bypassed by such a prominent solicitor who over the years, has done little to hide his lack of regard for the traditions of the Irish Bar (King’s Inns. Their venerable, anti-competitive, educational emporium has as its motto ‘Nolumus Mutari [We do not want to be changed]’.
Most judges spent their careers at the Bar and, perhaps understandably, owe a deep loyalty to this institution.
However, their scepticism about innovation may also be due to an awareness that the reforms of the legal profession instigated by the Progerssive Democrat leader, Des O Malley, and backed by the Competition Authority – in particular, permission being given to solicitors to advertise – may have contributed in no small part to the Wild West atmosphere that spread across the legal world, among others, during the boom years.
As the legal services bill moves to being signed into law, the professional bodies are sending out mixed signals. One senior figure indicated that much progress has been achieved in winning the Minister around to a more nuanced legislative outcome.
The Law Society has operated through the Fine Gael backbenches which has several solicitor members including the experienced party Chairman, Charlie Flanagan, TD for Laois-Offaly and Eoghan Murphy, TD for Dublin South East, who spoke out against the Bill from the backbenches.
Murphy’s father, Henry is a senior counsel while his great uncle, Frank Murphy served on the Supreme Court. .Leading barristers in or close to the Labour party include Junior Minister, Alex White and former Attorney General, John Rogers SC. Eamon Gilmore’s daughter, Gráinne, is a barrister.
“We are till in the dark on the Bill ” insists Bar Council spokesman, David Barniville, SC. His main concerns are the likely cost of regulation to barristers. They may well pick up a bigger share of the cost of regulation than has been the case up to now. Regulation of barristers up to now has been light-touch as unlike solicitors in practice they do not handle client funds. “We do not have a problem with the concept of an independent regulator”, Barniville insists. His concern is that the Minister’s new creation will impose unnecessary audit burdens beyond those required by the Troika or the Competition Authority.
And he worries that the new body will be unnecessarily large in size, leading to higher costs being passed on to the consumer. Barniville also reiterates the opposition of traditionalists to Shatter’s idea of multi-disciplinary partnerships. “We believe that the barrister’s duties to the court will be diluted. Duties are owed to partners and investors too, in a partnership”.
Although Alan Shatter may not be Ireland’s most tactful politician, he does have the temperament to take on vested interests but time is ticking, a new minister may not be so sedulous, and the well-marshalled and well-got legal lobby is one of the strongest in Ireland.