Hugh Barrett, Executive director for commissioning, Legal Services Commission In your article titled ‘Law Society calls for halt to BVT rollout’, [Law Society chief executive] Des Hudson expressed concerns about BVT (see  Gazette, 21 May, 3). Since this is a consultation, and I cannot anticipate its result, I will not address Des’s point about timelines. However there is one point I can clarify for the benefit of your readers. Des says we are ‘strangely silent’ on the question of TUPE. In fact, we set out in detail our understanding of the law at paragraphs 4.87-4.88 of the first consultation on BVT (December 2007). This made it clear that in our view TUPE is unlikely to apply to the form of tender that would take place under our BVT proposals, and explained why. Our position on this issue has not changed.
Time passes quickly. Three months after becoming president it remains the case that the main challenge facing the profession is change. After all of the changes currently in train are complete, one hopes (prays) for a period of constancy, unlikely as that may seem. Alas, we are not there yet. On legal aid however, there does seem to be a constant – or at least a constant stream of consultation – on change. The Law Society keeps responding of course, but it is clear that a full-scale settlement of the question of how to provide access to justice in a sustainable manner is what is required. The Society’s ongoing review of access to justice provision will hopefully satisfy that need and I very much look forward to the delivery of its interim report in January. There also remains concern that some lenders, without providing good reason, are determined to ‘free’ some solicitors from their panels. The challenge, especially for those lenders who profess to possess a social conscience, is to justify the harm that their actions will cause many solicitors’ firms and the communities they serve. To do so may not be as simple as they believe. Robert Heslett is president of the Law Society Regulation reviewAnd what change in the future? For too long, discussion of regulation has been dominated by governance issues. Last year the Society commissioned two reviews from Lord Hunt of Wirral and Nick Smedley on the substance of regulation of the professional community. I am delighted that we now have their final recommendations. Decisions on which recommendations to adopt lie with the SRA, but both reports provide considerable food for thought. The Law Society council will begin its consideration of the Society’s own representations this week. Any such representations will have at their core the need for regulation which is principles-based. Lord Hunt has added to the mix a primary recommendation of a system of authorised internal regulation (AIR) against such a need. In the past 18 months, principles-based regulation has had a bad press. The Financial Services Authority’s use of principles over rules was blamed by many for creating the conditions in which short-term risk-taking overcame measured, long-term growth. However, as Lord Hunt says, it was not the very premise of principles-based regulation which caused the banking crisis, but the inadequate application of the principles themselves. As Hector Sants has since acknowledged, the FSA was perceived as a toothless body lacking effective sanctions and this, in itself, was a contributing factor. But the principles-based approach remains at the heart of new proposals announced by Hector Sants in August. The lessons for the legal sector are that a principles-based system provides the flexibility required for effective competition, but in order to promote stability and responsibility, the regulatory principles must be firm and the sanctions at the regulator’s disposal must be appropriate. Regulatory certainty is vital. The professional community must have clear guidance on whether a particular approach will get them into trouble, rather than being at risk of regulatory ambush by unintended breach. The benefit of AIR is that it would offer a considerable incentive for effective compliance and rigorous risk assessment in the shape of reduced routine intrusion from the regulator. Lord Hunt’s recommendations on AIR to a large extent complement those of Nick Smedley. Both agreed on a need for the SRA to acquire the necessary skills to regulate corporate firms effectively. However, I believe that the point was that the required change was one that reflected the move to principles-based regulation and the need for a proportionate system across the board that meets the needs of the clients of a very diverse and complex profession. I am much encouraged that the SRA has recognised the validity of many of the concerns expressed and has started a process of engagement which I trust will in time encompass the entire professional community. It is my belief that they must also address the question of cost, as I foresee little tolerance of any further increase, not least as the cost for representation and complaints has been frozen or is reducing. Controlling the cost of regulation is vital for another reason. The switch to entity-based regulation is on the horizon, which will also pave the way for a significant change to the way in which practising fees are raised. A first consultation on this has already been carried out and there is more to come later. The regulatory system must provide value to those who pay for it, offering fairness while protecting the public. Amid all of this, the Society endeavours to provide stability and solidity amid a sea of change. We know that we must continue to support our members’ best interests and to offer the services and advice that they need in these testing times, and we will certainly endeavour to do so. PII renewalThe renewal period for professional indemnity insurance has caused considerable difficulty for some (but by no means all), including those who followed the advice of the Society to apply in good time. It is for the Society to thoroughly investigate allegations made by members that some qualifying insurers left proposals unanswered until the last minute (if at all) gave firms as little as hours to take or leave a quote, and ramped up premiums dramatically with no warning and little apparent justification. So with the added challenges of yet another consultation on legal aid, the organisation and administration of the Legal Services Commission, and ongoing changes within the conveyancing system, the Society is well occupied.
1 Attorneys and solicitorsOn the other side of the profession was the attorney at law who was in some ways the forerunner of the present day solicitor, although the office of attorney was abolished in 1875 as a result of the Judicature Acts. The Ordinance of 1292 had recognised attorneys as a separate part of the legal profession, confirming their monopoly on the right to practise in the courts of the Common Bench, and may well be the origin of solicitors being officers of the court. Attorneys dealt with procedural matters and managed litigation on behalf of their clients. They began to develop similar professional standards to those adopted by the serjeants under the supervision (in their capacity as officers of the court) of the judges of the Common Pleas. There were in fact also ‘solicitors’, practising in Tudor England, who were not necessarily trained lawyers of any description, although some of them were members of one of the inns of court. It was not until the 19th century that the expression ‘attorney’ was dropped in favour of the term ‘solicitor’. The earliest surviving form of the attorney’s oath dates from the mid 1550s, although it is known that the oath was in use as early as the 1520s and possibly even before that. The oath contained the following requirements: ‘You shall do no falsehood nor consent to any to be done in this court; and if you know of any to be done you shall give knowledge thereof to my lord chief justice and other my masters his brethren, that it may be reformed. You shall delay no man for lucre or for malice. You shall increase no fees, but be content with the fees accustomed. You shall plead no foreign pleas nor sue any foreign suits unlawfully to hurt any man, but such as shall stand with the order of the law and your conscience. You shall seal all such process as you shall sue out of this court with the seal thereof or see the king’s majesty or my lord chief justice satisfied for the same. Also, you shall not wittingly sue or procure any false suit, nor give aid or counsel to the same, on pain to be expelled from this court for ever. And further use yourself in the office of an attorney within this court according to your learning and discretion. So help you God etc.’ An oath was also taken as early as the 15th century by court officers in which they were required to use every effort to hinder falsehoods and reveal them to the court. In the attorney’s oath can be seen an early reference to the disciplinary consequences of falling short of the required standards of ethical behaviour. The penalty for deliberately making or assisting in making false claims was permanent expulsion from the court and, thereby, legal practice. An attorney expelled from the court after formal investigation on oath was said to be ‘forejudged’ and it was customary for the penalty to be physically enforced by throwing the attorney over the bar of the court. This gave rise to the colloquial expression ‘to turn up one’s heels’. Some form of suspension from practice was imposed while a complaint of professional misconduct against an attorney was investigated and in serious cases the investigation could be by a grand jury of attorneys. It is believed that less serious offences such as continuing with a matter without good cause were punished by a fine or a term of imprisonment. As with all lawyers, the court regulated the professional conduct of attorneys. Up to the 13th century a litigant was required to appear in person and to plead his case. Practising attorneys became more commonplace during the 13th to 15th centuries. However judges appear always to have exercised an inherent power to control the admission of lawyers to practise in their courts and to sanction them when they misbehaved. (Indeed, the overriding power to refuse to hear a particular advocate has recently been placed on a statutory footing in sections 27(4) and (5) of the Courts and Legal Services Act 1990, subject to the requirement to give reasons for exercising the power.) It appears that the disciplinary function was carried out publicly, at least in serious cases. In 1558, the court summoned all the attorneys and court officers to hear the sentence of forejudging passed on a senior attorney of 40 years’ standing ‘to the terror of other offenders’. To assist the poor and oppressed without reward; To give counsel to anyone who should seek it – one of the earliest statements of what is now called the ‘cab rank rule’ comes from the Scottish Court of Session in 1532: ‘No advocate without very good cause shall refuse to act for any person tendering a reasonable fee, under pain of deprivation of his office of advocate’; To dissuade clients from pursuing unjust causes and to advise them to abandon causes if it appeared that they were in the wrong; To deal with business expeditiously and not to prolong it for gain; To keep clients’ business secret (by 1647, the allegation that an attorney ‘revealed the secrets of my cause’ was considered so shocking that it was actionable for slander); To avoid corruption by money or favour, not merely in deceiving clients but also for instance in pretending to be ‘blind’ – unable to assist in a worthy cause; To ‘stick with hand, foot and nail’ to the truth, never pretending that a wrong is right; and To do nothing contrary to good conscience. In spite of the wealth of legal training offered by the inns of court, whose principal function was the education of students and practitioners of the law, it seems that no specific instruction on professional ethics was provided. Formal instruction on ethics may have been considered unnecessary, not least because lawyers no doubt discussed professional conduct matters and specific recent examples of misconduct among themselves. Concepts such as the importance of loyalty and confidentiality would no doubt have evolved and developed from those discussions, influenced both by Christian religious education as well as developing humanist learning, such as the lawyer’s duty to justice. The academic Jonathan Rose suggests that senior lawyers, as role models, may well have influenced the development of ethical sensitivities. The similarities between the ethics of the lawyers practising before the church courts and those of the lawyers practising at the common law bar are no doubt explained partly by the fact that principles of ethics, in common with substantive legal principles, were originally based on biblical precepts. By way of example, the medieval ethical principle that it was wrong knowingly to defend an unjust cause can be traced to the writings of the theologian St Thomas Aquinas. St Thomas taught that lex humana was subordinate to the eternal law of God. Additionally, it appears that early lawyers practised in both the ecclesiastical and common law courts and that, although the two legal professions developed separately, there would no doubt have been some cross-fertilisation between them. The king’s serjeants, who were appointed from the ranks of the serjeants at law and represented the Crown in important criminal and civil cases, were not allowed to appear or advise against the Crown except in certain limited circumstances; and then, if the verdict went the other way, they could change sides and ‘pray judgment for the king’. Conflicts of interest remained a very serious matter. There are a number of reported defamation cases in the 16th century containing judicial pronouncements suggesting that accusing a lawyer of being an ‘ambidexter’ or, colloquially, a ‘daffy-down-dilly’ was reckoned to be as serious a charge as to accuse a doctor of killing a patient. Sir Nicholas Bacon, the Lord Keeper of the Great Seal in the reign of Elizabeth I, suggested in 1559 that it was improper to ‘offer jeofail or error’ – to take technical points after a hearing – although this may not have been a universally held opinion. 2 The litigation and advocacy divideHistorically, barristers had exclusive rights of audience in the higher courts including the Crown courts, High Court and Court of Appeal, although solicitors have always had rights of audience in the lower courts, including the magistrates’ courts and the county courts and, in interim matters, in the higher courts. Barristers could not generally appear in court, except on dock briefs, unless instructed by an attorney (or, later, a solicitor). They had to be attended in court by a member of the solicitor’s practice. Barristers expected their ‘professional clients’ (solicitors) to visit them for ‘consultations’ at their chambers, in the manner of a consultant doctor, and negotiations over fees were conducted by barristers’ clerks and not by barristers themselves who regarded such matters as unprofessional. In the early 18th century, the notion developed that barristers received an ‘honorarium’ rather than ‘merces’. In recent times many of these traditions of the bar have been swept away. The legal profession, spilt into two branches for several centuries by historical accident, is now in a period of uneasy transition. In 1990, all solicitors were given full rights of audience in all courts upon qualification, albeit with restrictions on the exercise of some of those rights until the grant of a higher courts qualification following training and monitored experience. Solicitors began to appear in the higher courts in 1994. Barristers are no longer prevented from visiting solicitors at their offices and may freely accept instructions from professional persons other than solicitors who have been approved to instruct barristers directly, or even, subject to certain restrictions, directly from a lay client. The profession of barrister is undergoing a transformation to accommodate modern legal practice while continuing to provide a service to the public specialising in advisory work and advocacy. At the same time, solicitors are beginning to take advantage of the increased work opportunities made available by the relaxation of restrictions on their rights of audience. Mark Humphries has 25 years’ experience of contentious legal practice. Until recently a litigation partner and head of advocacy at Linklaters in London, he is now the director of his own commercial disputes firm Mark Humphries Ltd. He is a past chairman of the Solicitors Association of Higher Court Advocates In the second of three articles tracing the history of ethics and the legal profession, Mark Humphries recalls a time when accusing a lawyer of being a ‘daffy-down-dilly’ was as serious as accusing a doctor of killing a patientIn the period 1483–1558, principles of professional conduct above and beyond mere honesty began to be formulated for the bar by the Court of Common Pleas, the main common law courts of the time. The principal evidence of this formulation consists of three speeches to the new serjeants at law during the reign of Henry VIII in which the lord chief justice would explain the ethics of the profession and the high standards of conduct expected of practitioners. A number of specific requirements can be identified from these speeches: Part 3 of this series, published online next week, will analyse the development of ‘modern’ ethics and professional regulation.
As shown in president Linda Lee’s excellent summary piece it is clear that the government has a simple arithmetical problem (over and above the deficit itself). The debate on legal aid today in parliament will have to address a sum that does not add up. Legal aids cuts + Jackson/Young review = access to justice disaster. This problem is especially pronounced for clinical negligence claims. As with all good disaster movies however, it is first necessary to set the scene with some general points which bear repetition with each and every MP in the country who is going to be involved in the debates on this issue. First, it does seem to me that the coalition government – despite being in its infancy – already risks repeating the very mistakes it criticised in the Labour government for when in opposition, namely not listening, not understanding, and picking on supposedly weak targets in carrying policy into effect on this issue. Does the government appreciate that there is a ‘double whammy’ hit of both the cuts and the Jackson/Young proposals on access to justice? Is this a case of those who understand the law and constitution become lawyers, and those who don’t become MPs and ministers? Secondly, it seems clear to everyone except the Ministry of Justice, that there is no point in having a justice system if we as citizens have no practical access to it – that would be a breach of the fundamental constitutional basis for any state, that we as citizens give up our individual rights to the state in return for a way of enforcing those, that is, the justice system. Indeed, access to justice is not just part of David Cameron’s ‘big society’, but in fact is a marker of what I have always known as a civilised society. Thirdly, European law is quite clear that in order to comply with their obligations, member states must have effective and independent justice systems, and only within the last two weeks the European Justice Commissioner has signaled a very clear intention to introduce minimum levels of legal aid provision which all states – including the UK – will have to adhere to. Our government is clearly swimming against the tide upon this issue generally, and risks successful challenges under domestic and/or European law (note to government: rather ironically, any judicial review of these decisions will likely have to be paid for out of legal aid funds). And finally, what can we now expect of a ‘consultation’ – which the present government would do well to remember became a by-word for rubber-stamping exercises under the last government – from a government whose health and safety adviser, Lord Young, can confirm there is no such thing as a compensation culture in this country, only a perception of one, and then perpetuate that myth by referencing all proposals for legal reform under the report headings ‘compensation culture’? Applying that background specifically to the proposal to withdraw legal aid from all clinical negligence claims, produces the following more specific points. Crucially, to solve a problem you must first have a problem – in clinical negligence cases, as per the government figures standing behind the green paper, the success rates for clinical negligence cases has increased to 91%. Therefore on the basis that legal aid funds only pay for unsuccessful cases, clearly we as lawyers are doing a better job at pursuing meritorious cases and so driving down the costs to the legal aid fund. Add to that the average costs of unsuccessful cases have decreased 69%, and one may wonder what the problem is the government has with funding clinical negligence cases via legal aid. Following on from the above, the problem the government has – in many different respects – is that it funds the NHS, which sometimes injures people negligently, legal aid may fund their case and then the government has to pay the compensation. If you make it practically impossible for patients to sue the NHS by withdrawing funding, you in effect as a government/NHS put yourself above the law. There seems to be an inherent conflict of interests for the government, and therefore abuse of power situation to be created, which no-one appears to have yet focused on, opening up further avenues for successful challenge under domestic and European law. Most importantly, cutting legal aid for clinical negligence cases will affect the most vulnerable of claimants in clinical negligence – severely disabled children, the bereaved, children generally and those who lack mental capacity. This cannot be part of the coalition government’s stated plan to protect the most vulnerable from its cuts? Buried deep within the impact assessments attached to the green paper – which are cunningly not stored on-line with the green paper itself – are the figures behind the cuts. In terms of clinical negligence work, the net cost, that is presumably of unsuccessful cases, to the Legal Services Commission in 2008/09 (the figures the government quotes) was £17m. It cannot be that anyone has looked at that aspect of the impact assessment and done a proper cost/benefit analysis. If the costs are access to justice for some of the most vulnerable in Society who have been injured by the negligence of the State/the NHS with the potential political and constitutional costs of that, and the saving is £17m or 0.7% of the total legal aid budget of £2.3bn to contribute 0.01% to the £150bn deficit, surely that cannot be worth it? Is the government only looking at bald numbers and not the implications of those? In summary it would appear that the government either does not understand the combined implications of the legal aid cuts and Jackson/Young review in regard to conditional free agreements and access to justice, or it does not care. They can either cut legal aid or tamper with CFAs, but if access to justice is to prevail as it must, they cannot do both. Either the government does not understand the true implications of its proposals to cut legal aid for clinical negligence (and other) cases, or it does not want to listen when this is pointed out – or most dangerously it neither understands nor wants to listen. For us as a profession, now is the time for us to stand up for access to justice, on the firm basis that in fact the government needs us more than we need them. Without us and an effective justice system, they erode the very democracy which puts them into power, and keeps them there. If we do that, and educate the general public, they will also have the voice to fight these cuts and lay bear the truth behind the oft quoted spin of the ‘compensation culture’ and ‘self-serving lawyers’. We are simply the servants of our clients and the justice system, just as MPs and ministers are servants of the people. As Lord Neuberger MR aptly reminded the government only a few weeks ago – the justice system is the third branch of Government, and therefore in terms of their proposals the other two branches, the executive and legislature, should proceed cautiously if they are to avoid the same perils that beset the last government. In Not Listening/Understanding v Déjà Vu  Court of Public Opinion & Constitutional Niceties – the jury’s still out. Paul Rumley is a partner in the clinical negligence team at Withy King
Rachel Falconer, West London Law Society Junior Lawyers’ Division committee member and solicitor with Hodders Law by Rachel Falconer, West London Law Society Junior Lawyers Division committee member and solicitor with Hodders Law In October 2010, BPP announced the decision to open three new branches nationwide, namely in Cambridge, Newcastle and Liverpool. This announcement sparked a heated debate and provoked passionate challenges to the decision that will lead to successful candidates paying fees (currently £8,995 a year and £12,500 in London) to embark on the LPC, when the number of training contract places is widely reported to be in rapid decline. Articles in the Gazette, following the decision, highlighted the difficulty in identifying the extent of this problem from the statistical information available (Rachel Rothwell ‘How should oversupply of LPC graduates be tackled’ and David Dixon ‘Future LPC students need to be better informed about career prospects’). This is a legitimate concern of the committee of the West London Law Society Junior Lawyers Division (WLLS JLD), which represents the interests of its members who are students, trainees and junior lawyers. The diversity of age, qualification, experience and opinion of the individuals within this pool of membership, however, dictates that there is no simple answer to this debate accurately reflecting the interests of all. For some, an additional choice of locations will be beneficial and could reduce living and travel costs. Yet there is a significant risk that candidates will embark on a course that will consume a considerable amount of their time and money, without being fully aware of the prospects of securing a training contract. BPP College of Professional Studies, the umbrella under which BPP Law School sits, is a commercial entity which, by nature, will seek to enhance its services and maximise its profits for the benefit of its members. It cannot be expected to self-regulate its own expansion, or the number of places it offers to candidates, due to some moral conscience regarding the buoyancy of the legal market and the future opportunities those candidates may have. Nor does the SRA have the relevant authority to intervene to regulate this expansion (although the Law Society’s education and training committee is considering alternatives, such as an aptitude test for LPC candidates). There is no doubt that, if the demand is there, the expansion of LPC providers will continue and there is validity in the argument that diversity of choice of LPC providers creates free market competition, directly impacting on pricing policy and quality of service. As a committee, the WLLS JLD has concluded that there is a need to focus on practical solutions to address the problem of over-subscription without becoming embroiled in a protracted debate. The emphasis should be on providing prospective candidates with comprehensive, objective information to equip them to make their own informed decisions. In the light of this, the WLLS JLD has decided to utilise the experience of its committee members to assist law students who are facing key decisions about their futures. The committee, with the assistance of experts from alternative fields, will be working with universities to develop a series of seminars aimed not at discouraging students from joining the profession, but at giving them access to the information necessary to make informed choices about their future careers. If our members are fully informed about the realities of joining the profession and the range of career options available to them, then we should credit them with the acumen to make the right decision on an individual basis.
The latest legal services comparison website to enter the market was launched by a Hertfordshire solicitor last week. Michael Welsh has launched fixed costs comparison site comparelegalcosts.com, which offers consumers a choice of three firms based on their postcode. Firms pay an annual subscription fee to join the service, with no additional charge for referrals. Once a consumer or business inquiry has been submitted to the site, it selects the three nearest firms based on the client’s postcode. The consumer can choose from the three fixed-price quotes presented. Law firms may join the scheme free of charge for the first three months, while it builds up a network of providers. Last August saw the launch of legal services comparison sites legalcompare.com and bid4fees.com. Wigster.com launched in November, signing up Access Legal, the consumer brand of national firm Shoosmiths, as one of its member firms. It has 2,000 registered consumers.
A London solicitor at the centre of a dispute over alleged illegal file sharing could face a huge costs bill after a judge ruled that he had breached the code of conduct and ‘brought the legal profession into disrepute’. Judge Birss, sitting in the Patent County Court, allowed the first stage of an application for wasted costs against Andrew Crossley and his firm ACS:Law last week. Crossley sent thousands of letters on behalf of client Media CAT, a company that pursues alleged copyright infringers. The correspondence demanded around £500 in compensation from people whom Media CAT claimed had illegally shared pornographic films via the internet. Crossley brought court proceedings against 27 defendants, but attempted to discontinue the actions. Last month Birss formally struck out the proceedings, prompting some of the defendants to pursue Crossley for costs. Birss ruled that Crossley had breached the Solicitors Code of Conduct by entering a prima facie ‘improper and champertous’ agreement with Media CAT, under which he would receive 65% of any damages collected from the alleged file sharers. Under rule 2.04 of the code of conduct, a solicitor ‘must not enter into an agreement to receive a contingency fee for work done in prosecuting or defending any contentious proceedings’ before the court. Birss said: ‘I am quite satisfied to the standard necessary for this stage of a wasted costs application that Mr Crossley is responsible for the basic agreements, and has thereby acted in breach of [the] Solicitors Code of Conduct.’ Birss said ACS:Law’s conduct was ‘chaotic and lamentable’, and that Crossley had lent his assistance to proceedings that were an abuse of the process of the court and ‘brought the legal profession into disrepute’. He said: ‘This was not the behaviour of a solicitor advancing a normal piece of litigation. I do not doubt that this led to unnecessarily incurred costs.’ Crossley will appear before the Solicitors Disciplinary Tribunal later this year. A spokeswoman for the Solicitors Regulation Authority said: ‘The judgment supports our concerns about the effect this sort of correspondence has on the public.’ Mills & Reeve, which represented Crossley and ACS:Law, declined to comment. Michael Forrester, intellectual property partner at national firm Ralli, who represented five of the defendants, said his clients’ costs amounted to £80,000.
As firms begin thinking about renewing their professional indemnity insurance, the Law Society has warned conveyancing solicitors to ignore its new Conveyancing Quality Scheme (CQS) ‘at their risk’. Since the application process launched in January, almost 1000 firms have applied and 202 have been accredited. Chancery Lane has reminded firms that mortgage lenders, consumer and insurers will be looking for the quality mark. Law Society chief executive Desmond Hudson said: ‘With 202 firms now accredited and another 750 applications to be assessed, CQS has arrived and is clearly on the home buying industry’s radar as a key requirement for conveyancing solicitors.’ Accredited firms have already reported that new clients are checking whether they have the accreditation, and high volumes of traffic online are going to CQS firms via the consumer website. ‘Firms without CQS accreditation could find themselves left behind,’ said Hudson. He added that while the number of accredited firms ‘might look low’, the process was not intended to be ‘rubber-stamping exercise’, and firms are thoroughly assessed on a range of factors, including client care. ‘This is not just some marketing gimmick. Quality in relation to CQS means quality rather than simply being a label,’ he said. In relation to insurance renewals, Hudson commented: ‘We cannot know for sure whether CQS will be a factor in PII premiums for conveyancing firms, but the fact the scheme is supported by insurers suggests that CQS cannot be anything other than a positive step for PII.’ He added: ‘Firms need to ask themselves whether it is worth the risk in not seeking to secure CQS accreditation.’ The scheme requires practices to undergo an assessment, compulsory training, self-reporting, random audits and annual reviews. The scheme is open only to firms regulated by the Solicitors Regulation Authority. It has the support of the Council of Mortgage Lenders, the Building Societies Association, the Legal Ombudsman and the Association of British Insurers.
The Solicitors Regulation Authority’s failure to meet the 6 October target date for licensing alternative business structures was branded a ‘shambles’ by a leading market commentator this week. Professor Stephen Mayson (pictured), director of the Legal Services Policy Institute, told delegates at a Westminster Legal Policy Forum event that the delay represented a ‘significant blow to credibility’ in the eyes of new market entrants and existing sceptics. He said: ‘It might be formally correct [for the SRA] to say that 6 October was never set in stone; but the weight of expectation and momentum around that date was openly encouraged, and it would be disingenuous now to hide behind such a regulatory sleight of hand. ‘Nor is it an adequate response to say that the delay will only be a matter of weeks, because we still don’t know for sure that this will be the case. If a week is a long time in politics, three months is an age in the world of business and the movement of capital.’ He added: ‘At this point, the implementation of ABSs has become – I say with deep regret – something of a shambles.’ The SRA’s plans to become an ABS licensing authority were hampered by the need to obtain legislative change to allow it to examine the spent convictions of potential ABS owners. Delay was also encountered in obtaining agreement from the Ministry of Justice to ensure that the cost of appeals against SRA licensing decisions will not be borne by the profession. A number of firms have told the Gazette privately that they were angered by the hold-up. But SRA chief executive Antony Townsend told delegates: ‘We planned throughout for the introduction of ABS at the same time as the release of the new handbook [in October]. ‘I recognise for those planning to become ABSs that it is hugely frustrating and it will muck up your plans. I can only apologise and assure you we’re working flat out with the MoJ to bring in licences for ABSs as soon as we can.’ Townsend told the Gazette separately that he hoped the SRA will be able to license ABSs ‘by the turn of the year’. He added that the regulator has had ‘in-depth’ discussions’ with 50 firms looking at becoming ABSs, some of which were not law firms. ‘[There have been] a few very big players, and the Co-op is the big public one, but others are less public about it,’ he said. Meanwhile, in her first public speech as new chair of the Legal Services Consumer Panel, Elisabeth Davies told delegates at the WLPF event that she is encouraged by the more open market that will be created by ABSs and outcomes-focused regulation. ‘We’re cautiously optimistic and see them as suggesting positive change is afoot – the challenge is how you enforce it to make sure the consumer is protected,’ she said. In a statement after this week’s Gazette went to press, SRA chair Charles Plant emphatically denied the organisation was to blame for the ABS registration delay. He said: ‘It is important to set the record straight. The suggestion that the delay in the introduction of SRA-licensed ABS is attributable to the SRA is simply wrong. ‘On the two issues which have been cited as a cause for the delay – the mechanism for appeals against SRA decisions, and the provision to exempt owners and managers from the Rehabilitation of Offenders Act, the SRA’s position has been established and public for a long period, and has not changed. We delivered our proposals for ABS licensing to schedule. ‘We share the frustration of potential ABS applicants about the delay in implementation, and are working with the Legal Services Board and Ministry of Justice to get early clarity about the parliamentary timetable, a matter which we do not control.’
We all love to moan about budget airlines and their deceptive online pricing strategies for adding taxes, fees and charges. They are no longer allowed to keep taxes as an unpleasant surprise until the last moment when you are about to enter your credit card details, but they do still try and add an unexpected charge for using your credit card. Earlier this year the Office of Fair Trading put passenger travel companies on notice to change misleading debit and credit card surcharging practices or face enforcement action under consumer protection laws. This summer, I was particularly annoyed when the company that we booked our family holiday with tried to charge us extra for sitting with the rest of our party on the flight. This sort of thing just leaves a bad taste in your mouth and undoubtedly diminished my opinion of their reputation. Towards the end of last year, an OFT study on price advertising methods showed many high street stores and service providers, including airlines, were making misleading offers to shoppers. Traders were described as employing underhand tactics to make their prices look competitive in defiance of guidelines from the OFT guidelines. What has all this to do with the legal profession, you may ask? Well, unless someone can tell me when a lasting power of attorney might be VAT deductible for an elderly pensioner, then it seems that many law firms may be perceived to be employing slightly underhand tactics to make their prices look competitive when quoting for private client services. An elderly relative called me to sound me out about the cost of a joint lasting power of attorney and described the conversation with her solicitor like this: ‘They said it would cost £450 each, but with a 25% discount for two, plus VAT and it would cost £125 each for certification.’ The mind latches on to the words £450, so when the total amounts to much more, it feels like seeing a flight advertised for £29.99 but finding it will actually cost £79.99. Grabbing my ever-handy calculator, I worked this out at a total of £810 for the LPAs, but we were uncertain about whether or not to add VAT to the certification or when that might be payable, so had to go back for clarification. An alternative approach might have been: ‘A single LPA costs £540, but if you make two at the same time then the total is just £810, so just £405 each and this includes the VAT.’ I decided to phone a few other firms and got a very similar approach. I understand that there is an argument for quoting like this because ‘competitors do it’ but, while no-one is trying to deceive or hide anything, the total price is not entirely clear and I would argue that this is not behaving in a way that ‘maintains the trust the public places in you and in the provision of legal services’, and it is more likely to leave a bad taste.