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Greater competition for Northern Ireland's solicitors

218/05    25 November 2005

The Law Society of Northern Ireland (LSNI), the professional body and regulator for Northern Ireland solicitors, has changed its practice regulations following an OFT investigation.

The OFT began an investigation into the LSNI's practice regulations under Chapter I of the Competition Act 1998 and Article 81 of the EC Treaty in June 2004.

The LSNI has now amended its practice regulations. The amended regulations come into force on 1 January 2006 and see the revocation of prohibitions on:

• fee advertising and comparative fee advertising charging uneconomic fees
• soliciting, including all direct and unsolicited approaches to existing or potential clients.

The lifting of the prohibitions relating to fees will encourage competition on price and enable prospective clients to compare the rates charged by solicitors in Northern Ireland more easily. Relaxing the restrictions on soliciting (subject to safeguards) will allow solicitors and small firms in particular to compete more effectively for clients.

The OFT further investigated practice regulations of the LSNI which prohibit the payment by solicitors of referral fees to non-lawyers. This prohibition appears to have its origin in a statutory prohibition on fee sharing. The matter has therefore been raised directly with the Northern Ireland Executive.

Vincent Smith, Director of Competition Enforcement, at the OFT said:

'We welcome the Law Society of Northern Ireland's changes to their practice regulations. The introduction of greater competition between solicitors in Northern Ireland will bring benefits to consumers and innovative business.'

NOTE

1. The OFT launches investigations under the Competition Act 1998 and Article 81 of the EC Treaty where it has reasonable grounds to suspect a breach. In light of the changes which the LSNI has made to its regulations, the OFT has closed its file. It has made no decision as to whether the LSNI's practice regulations infringed competition law.

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