The International Monetary Fund (IMF) has rejected claims by EU justice commissioner Vivian Reding that it threatened the independence of the Irish judiciary in seeking to place a regulator for the profession under the aegis of the Department of Justice.

The IMF, as part of the troika, recommended regulation of the legal profession be removed from the Law Society and the Bar Council and transferred to a new regulatory authority within the Department of Justice, with members appointed by the minister.

The Government is going to establish a new body, to be known as the Legal Services Regulatory Authority, under the long-delayed Legal Services Regulation Bill, which is still before the Oireachtas. However Minister for Justice Alan Shatter has said the new entity will be independent of both legal professions and Government.

Earlier this month, Ms Reding raised concerns about the appointment procedure for the regulator, claiming it would compromise the independence of the legal profession here.

She also accused the IMF of being guided by “pure economic reasoning” and warned measures to achieve fiscal consolidation could not come at the price of undermining the independence of the judiciary.

Today, the IMF issued a statement strongly rejecting Ms Reding’s claims.

“The IMF considers the rule of law to be a key ingredient in fostering a positive business and investment climate and recognises that it is underpinned by strong and independent institutions, including the judiciary and the legal profession.”

The fund insisted no programme measure was proposed by the IMF in Ireland that would have undermined the independence of the judiciary or the legal profession.

“Following concerns raised by the legal profession, the Irish authorities responded by introducing certain amendments to the relevant draft bill,” it said, noting the new body would be independent of both the judiciary and the government.

There was no comment from European Commissioner Viviane Reding yesterday to the statement by the IMF.

Ms Reding made the remarks at the launch of the justice scoreboard in Brussels on March 17th, in which she specificially mentioned Ireland in her discussion of justice systems in EU member states, and in particular the IMF’s request that the representation of the legal profession was to be abolished and replaced by a “legal regulator” appointed by and integrated into the Irish ministry of justice.

“Let’s be clear:measures to achieve fiscal consolidation cannot come at the price of undermining the independence of the judiciary and the independence of the legal profession. Pure economic reasoning must not be the guiding principle when it comes to judicial reforms,” the Commissioner said.

Ms Reding’s intervention follows a letter by the Law Societies of Europe and the American bar association to the IMF in December 2011, raising concerns about this issue.

It is understood that the top official from the European Commission’s justice directorate general met with representatives from the IMF in January last year, raising concerns about the IMF’s involvement in matters relating to justice in Ireland.

The Department of Justice said today: “The relevant comments by Commissioner Reding were incorrect in relation to the stated objectives of the Legal Services Regulation Bill and their having any adverse impact on the independence of the legal professions - indeed the latest IMF statement is intended to clarify that this is the case.”

“It is now even more clear from the text of the Legal Services Regulation Bill, having completed second and committee stages in the Dáil, that under the Bill the legal professional bodies will maintain their representative functions but legal practitioners are to be regulated by a new Legal Services Regulatory Authority which will be independent both of the legal professions and of the Government,” it said.

The slow delivery of the legal services legislation was a major source of tension between the Government and the troika during the bailout.