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Question

514. Deputy Seán Ó Fearghaíl asked the Minister for Justice and Equality the action she will take to reduce the legal costs associated with family law cases; her views on fees being charged in such circumstances; her plans to have discussions with the Department of Finance with regard to exempting such fees from value added tax; and if she will make a statement on the matter. [20513/15]

Answer

Minister for Justice and Equality (Deputy Frances Fitzgerald): The Legal Services Regulation Bill 2011, which has completed Second Stage in the Seanad, gives legislative expression to the commitment in the Programme for Government to "establish independent regulation of the legal professions to improve access and competition, make legal costs more transparent and ensure adequate procedures for addressing consumer complaints". The Bill is, therefore, a key component of the Government's strategy to bring greater transparency to legal costs and to reduce their burden on consumers, including those involved in family law litigation. It is the intention to complete the Bill so that the new Legal Services Regulatory Authority will come into operation without delay this year.
The Bill makes extensive provision, in Part 10, for a new and enhanced legal costs regime that will bring greater transparency to how legal costs are charged. Legal practitioners, whether solicitors or barristers, will be obliged to provide more detailed information about legal costs from the outset of their dealings with clients. This will be in the form of a Notice written in clear language which must be provided when a legal practitioner takes instructions. Among other things, the Notice must, as set out in section 123 of the Bill, disclose the costs that are involved, or, where this is not reasonably practicable, the basis upon which such costs are to be calculated. A cooling-off period is to be allowed for the consideration of costs by the client. When there are any significant developments in a case which give rise to further costs, the Bill provides that a client must be duly updated and given the option of whether or not to proceed with the case in question. In addition, the Bill sets out that it will not be permissible for legal practitioners to set fees as a specified percentage or proportion of damages payable to a client from contentious business and that it will no longer be permissible for barristers to charge junior counsel fees as a specified percentage or proportion of Senior Counsel fees. VAT exemptions for fees in family law cases are not under consideration.
Under the Bill the current functions of the Taxing-Master will be taken over by the new Office of the Legal Costs Adjudicator, backed up, for the first time in legislation, by a set of Legal Costs Principles and published legal costs determinations. The Bill will also pave the way for the introduction of new business structures combining legal and other service providers so that they can combine to meet the needs of consumers in a more cost-effective way. In England and Wales, for example, greater cost transparency has been achieved and savings have been made by consumers in specific areas of family law since the introduction of these new legal business models.
In addition to these legal services and costs reforms there are other family litigation supports which deserve mention. The Deputy will wish to know that family law proceedings are, in fact, exempt from the payment of court fees. In terms of assisting those engaged in family law litigation who are most in need, it must also be recognised that family law continues to constitute the predominant area where the Legal Aid Board provides legal services. Of the cases handled by the Board in 2013, 85 per cent, that is to say 12,936 cases, were in the family law area. Moreover, since 2011, the Board also has responsibility for the Family Mediation Service, which is staffed by professionally trained and accredited mediators through a network of full- and part-time offices around the country.The service is currently free.
In general, as set out in Section 29(1)(b) of the Civil Legal Aid Act 1995, clients being provided with legal aid make a payment before they see a solicitor (an advice contribution) and a further payment before their solicitor represents them in court (an aid contribution). The amount of the payment is based on the person’s disposable income and, where their capital assets (excluding their family home) exceed €4,000, their disposable capital also. The minimum contribution is usually €30 for legal advice and €130 for legal aid. Most of the applicants for the Board’s services pay these minimum contributions. The service which the Board provides is a full service involving advice, representation (including in certain cases the services of legal counsel), implementation and enforcement. It should be noted that VAT is not paid on contributions.
In respect of the rare cases in which the contribution might be significant, section 28(4)(c) of the Civil Legal Aid Act 1995 specifically allows the Board to refuse legal aid where the contribution is likely to exceed the amount of fees which an applicant might be charged if he/she went to a private solicitor. In practice this provision has only rarely been applied as the costs of privately delivered services usually will exceed any contribution which might be charged.
In replying to the Deputy, I also understand that persons who apply for legal services to defend proceedings brought by the Child and Family Agency (TUSLA) to take children into state care or to supervise them in their own homes do not pay a contribution towards legal services. In addition, section 29(2)(b) of the Act provides that the Board can waive any contribution due, or accept a lower contribution, in cases where failure to do so would cause undue hardship to the applicant. In most family law cases involving persons who are in receipt of legal aid the usual practice is for the Court to make no order as to costs at the end of the case. This means that each party pays their own costs. In the unusual event that costs are awarded against the other party the Board is required to seek to recover its costs from the costs awarded and the person in receipt of legal aid is under an obligation to assist the Board in doing this.
Provision is also made under section 33(7) of the 1995 Act which can mean that if a person recovers any settlement monies these must be paid into the Legal Aid Fund. This is to enable the Board to recover the costs of providing the service to the legally aided person. If any property other than the person’s home is recovered or preserved it is subject to a charge in favour of the Legal Aid Fund. The Board will generally cap the solicitor’s fees element of any costs recovered from a person receiving legal aid in judicial separation and divorce cases at €5,000. It will not recover its costs from newly awarded maintenance, nor from maintenance arrears where the amount recovered is less than €3174.35. Section 33(8) of the Act provides that the Board can waive any money or property it is due under section 33(7) if not to do so would cause hardship.