NI barristers offer initiatives to address competition concerns

Wednesday, January, 2011

The UK’s primary competition authority – the Office of Fair Trading (OFT) – has today welcomed the voluntary steps taken by the Bar Council of Northern Ireland (BCNI) to improve competition in the market for barristers’ services in NI (OFT press release).  The proposed steps are freeing up price competition and making it easier for barristers from outside NI to compete for business within NI.  However, the OFT continues to be concerned that regulation of legal services in NI appears to lack the independence and accountability recently introduced in England and Wales.

Across the developed world, including Ireland and the UK, reform of the ‘traditional’ professions (solicitors, barristers, doctors, dentists, vets etc.) has received much attention in recent years.  The prevailing view of economists and international organisations like the OECD is that the professions should not be exempt from the rigours of competition and that regulation should be proportionate to achieving its intended benefits and no more – for example, to ensure minimum standards of service for clients/patients but not to artifically control the numbers entering the profession.

The professions continue to be by-and-large ‘self-regulating’: rules and restrictions on who can become a member of the profession, advertising and organisational structure tend to originate within the professions and economists generally see these practices as primarily serving the interests of the professions rather than clients/patients.

For example, in the barristers’ profession in both parts of the island of Ireland, there are various rules and procedures that limit (perhaps unintentionally in some cases) competition among practitioners by more than is necessary and these leave consumers worse off.   These impediments have been documented by the OFT and the Irish Competition Authority, which aim to protect the competitive process and consumer interests.

A reform agenda has been underway in the legal and other professions in Ireland for almost a decade now and it is fair to say that the rate of progress has been painfully slow, even though high professional fees have been identified by other bodies, notably the National Competitiveness Council, as contributing towards the high cost of doing business in Ireland.

In an article written by Dr. Pat McCloughan of PMCA Economic Consulting for The Irish Times in 2006 (‘Legal reform will bring gains all round’, 12 Dec 2006), it was argued that reform of the Irish legal profession would not only benefit users, including the government, Irish business and personal consumers, but it would also improve the operation of the profession itself by enhancing the productivity, innovation and efficiency of its practitioners and practices.  The same applies to the other traditional professions.

Different professions are characterised by different issues and research conducted by the OECD and academic economists suggests that competitive reform of the professions should generally aim to tackle unjustified restrictions simultaneously rather than in a piece-meal fashion.  For example, the benefits of making it easier for people to enter the profession will tend to be muted if other restrictions shown to be unnecessary from a competition policy perspective are not also addressed.  Reform therefore needs to be wide-ranging and delivered in a relatively short period of time, which, while difficult for practitoners in the short-term, will have longer-term benefits for the economy as well as the professions themselves.

In the case of the NI barristers, of which there are approximately 600 practitioners, the OFT will (appropriately) continue to insist on an independent regulatory body overseeing the profession in addition to welcoming the BCNI’s initiatives in respect of price competition and allowing barristers from outside NI to compete with those within that part of the UK.  This would be good for Irish barristers as well as NI consumers.

In 2006, the publication of the Competition Authority’s report into competition in the barristers’ and solicitors’ professions in Ireland recommended (inter alia) the establishment of a Legal Services Commission, which would balance the regulation of both professions by giving more voice and representation to consumers. 

However, little has changed in that regard since then but the opportunity for constructive improvement remains in all of the professions, not just among the lawyers.

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