IMF denies undermining Irish legal system

The IMF has denied it tried to undermine the country’s legal system when as part of the Troika it insisted on changes to cut lawyers costs as part of our austerity programme.

Instead, it said, the Government led the changes now in the controversial Legal Services Regulation Bill going through the Oireachtas, and the IMF and the European Commission supported their broad goals.

However, high-level meetings between the IMF and the commission early in 2012 reportedly led to the IMF agreeing it would leave issues relating to the judiciary to the commission that has more experience in the area, according to an EU source.

The IMF was responding to a warning from the European Justice Commissioner, Viviane Reding, that financial concerns must not jeopardise the rule of law, as she feared had almost happened in Ireland.

She believed the IMF recommended placing a regulator for the legal profession within the Department of Justice, with the minister appointing its members, which would have endangered its independence.

Ms Reding referred to a letter that the European and American bar associations wrote to IMF chief Christine Lagarde after the draft Bill was published in late 2011, warning that Troika-pushed reforms in Ireland, Greece and Portugal threatened legal independence.

The letter, which followed a major law conference in Dublin involving both organisations, described the changes in the draft bill as “unprecedented in Europe and the United States”.

It took issue with the appointment of a regulator, all of whose 11 members would be appointed and could be removed by the justice minister.

This, they said, breached the internationally recognised principle of regulation being independent of government.

The statement from the IMF, which comes 10 days after Ms Reding’s warning, said the IMF in Ireland had not proposed any measures that would have undermined the independence of the judiciary or the legal profession.

“The development of reforms of the legal profession was led by the Irish authorities and they focused on increasing transparency on legal costs, better protecting consumers of legal services, and creating independent oversight bodies for professional misconduct and disputes over legal costs, with these broad goals supported by both the IMF and the European Commission,” the statement said.

The Bar Council supported Ms Reding’s concerns and accepted that the IMF may not have influenced the contents of the bill.

It does not “come as any surprise to the Bar that the IMF had no input into the Bill nor was it Troika-demanded but rather that the development of reforms of the legal profession was led by the minister”, said a statement from Bar director Jerry Carroll.

Changes have been made to the bill but the Bar Council said it still has some concerns in relation to the cost of the new Regulatory Authority and proposed alternative business structures involving accountants working in practices with lawyers.

“The Minister for Justice promised to revisit at Report Stage a number of the sections already discussed along with further amendments identified following consultation with the Bar Council and other stakeholders,” the statement said. “The Bar Council is preparing for such engagement.”