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This document sets out the analysis of the responses to our consultation "In the public interest?". The consultation dealt with matters falling to the Government arising from the Office of Fair Trading (OFT) report "Competition in professions".
Our consultation paper "In the public interest?" examined the possible implementation of legislation on opening up the conveyancing and probate markets; multi-disciplinary practices and other new business structures for providing legal services; the possible extension of legal professional privilege to non-lawyers; and the Queen's Counsel (QC) system. The consultation was aimed at both professionals and members of the public in England and Wales. It was conducted in line with the Code of Practice on Written Consultation issued by the Cabinet Office. The Code criteria set out in annex D were followed.
On publication, we initially sent some 199 copies to the main professional bodies, representative groups, Government departments, public bodies and others. Following publication, we received requests for over 1000 further hard copies and we recorded 3992 visitors to the consultation document on the website, during the period of consultation.
We received 185 substantive replies to the consultation. 132 of those were identifiable as from individual lawyers or lawyer affinity groups. The rest were from companies, Government departments and other groups and individuals. A list of respondents appears at annex A. We are grateful to all those who responded and for the time and effort given to their replies.
Following this analysis, the Government will decide how to take forward its policy in respect of the issues raised in the consultation: it is planning to set out the way forward in a statement before the summer break.
Any queries concerning this report may be addressed to:
Mrs Susan Samuel
Lord Chancellor's Department
Legal Services Development Division
6th Floor West
Selborne House
54-60 Victoria Street
London SW1E 6QW
Tel: 020 7210 1454
Fax: 020 7210 0613
Email: Susan Samuel
Further copies of this report can be obtained from Mrs Susan Samuel at the above address or by phoning 020 7210 1454.
In July 2002, the Government consultation "In the public interest?" looked at the issues that fell to it following the Office of Fair Trading's (OFT's) report published in March 2001 entitled "Competition in professions."
Restrictions on competition may be justified if, for example, they are in the public interest. The OFT report had highlighted some of the potential anti-competitive restrictions found in the legal professions but it did not examine whether or not these restrictions could be justified (for example, on the basis of countervailing consumer benefits).
The Government is committed to ensuring that the professions are properly subject to competition. In most cases, open and competitive markets are the best way to ensure that consumers get the best possible service. On all the issues raised in the consultation, the Government's position is that the market should be opened up to competition unless there are strong reasons why that should not be the case, such as evidence that real consumer detriment might result from such a change.
This report sets out the analysis of the responses to our consultation on the matters falling to the Lord Chancellor's Department arising from the OFT report. The report follows the format of the consultation paper and is divided into five chapters on (1) implementation of legislation on conveyancing and (2) probate, (3) the multi-disciplinary environment for solicitors, (4) legal professional privilege, and (5) the QC system.
We looked at how conveyancing services are provided now; explained how implementation of the existing legislation would work (including what would need to be done to implement it); and asked what the likely 'take up' by new providers and benefits to the consumer might be if sections 34 to 52 of the Courts and Legal Services Act 1990 were implemented.
Most respondents thought there would be a demand from new providers wanting to join the Authorised Conveyancing Practitioners scheme. But a significant proportion of respondents did not expect that to be sustained beyond an initial flourish.
Most respondents did not consider that the Authorised Conveyancing Practitioner scheme provided enough safeguards to protect consumers, and took the view that Authorised Conveyancing Practitioners should be regulated to the same degree as solicitors. However, about a quarter of respondents considered the safeguards would be sufficient.
Almost all respondents considered there would be a significant impact on solicitors' practices, with smaller high street practices, and those in rural areas feeling the pinch most. Again, most respondents felt there would be implications for access to justice, particularly for those living in rural communities.
About two thirds of respondents considered there were more disbenefits to introducing the Authorised Conveyancing Practitioner scheme, with the remaining third taking the view that there would be a net benefit in introducing the scheme.
The chapter on probate looked at how probate services are provided now; explaining how implementation of the existing legislation would work (including what would need to be done to implement it); and tried to gauge the likely 'take up' by new providers and benefits to the consumer. Given that sections 54 and 55 of the Courts and Legal Services Act 1990 have quite different applications, the chapter, which explained how the new arrangements would work, was in two parts.
Most respondents thought there would be a demand from new providers wanting to become authorised to provide probate services.
Most respondents did not consider that there was sufficient protection for consumers included in the arrangements for authorising new providers under either section 54 or section 55 of the Courts and Legal Services Act 1990. Many thought that new providers should be regulated to the same degree as solicitors, and some considered that existing controls should be tightened. However, 20% of respondents considered the safeguards were sufficient to protect consumers.
This chapter considered the restrictions in legislation that inhibit solicitors from developing new business models. We were concerned with sounding out the appetite for, and the possible effects of, possible change in the legislation, in regard to the provision by solicitors in England and Wales of legal services, with particular reference to new business models; and with sounding out the appetite for, and possible effects of, extension of the provision of legal services by employed solicitors. Our consultation did not put forward particular new business models nor the means of their regulation.
We sought views on whether the Law Society powers to regulate solicitors and solicitor partnerships should be broadened, to enable them to regulate non-solicitor partners and any business entity through which solicitors provide services, irrespective of its structure or ownership. It is for the Law Society to bring forward detailed proposals that would satisfy the Master of the Rolls or the Lord Chancellor that they safeguard the public interest in maintaining a competent, independent and honest profession.
118 respondents commented on this chapter. 47 of the responses made general comments whilst the remainder addressed one or more of the specific questions asked in the chapter. The majority of respondents were providers of legal services rather than users of legal services which meant that user demand for new services was difficult to gauge.
Appetite for change was mixed: for some solicitors providing services through new business models was seen as an exciting opportunity; for others a concept incompatible with the core values of the profession.
Of those that responded to the question on the effect of new business structures on the current legal market, a large majority predicted a reduction in the number of solicitors' practices (but that solicitor numbers would remain constant as more jobs were created in the firms using new business structures). It was felt that rural areas would suffer more from such a reduction.
Particular concern was expressed about publicly funded work; it was felt that such work would not be taken on by new providers and the providers that already existed would struggle if profitable work, which often cross-subsidised their publicly funded work, was 'cherry picked' by commercially minded new entrants. There was no groundswell of opinion that provision of privately funded legal work would be detrimentally affected by the introduction of new business models, except possibly in some rural areas.
Over 50% of respondents who answered the questions on regulation saw the Law Society as the natural regulators of a new system.
The chapter sought to explore how the concept of LPP might be developed. We looked at the options to restrict, maintain or extend LPP.
46 respondents addressed the questions on LPP. Of these, more than half (52%) expressed a preference for not extending LPP beyond its present scope. On the other hand, 37% of respondents advocated an extension of LPP. A considerable majority of these would rather see this achieved by according privilege to the advice given by members of designated bodies, as opposed to attaching it to the nature of advice given, irrespective of the profession of the adviser.
The chapter sought evidence to enable us to address the OFT's concerns.
76 respondents answered the questions on the QC system. These included the Bar Council, the Law Society, the DTI, the Treasury and the Judiciary, as well as many individual law firms, local law societies and a commercial bank. The majority did see some benefit in a QC system (although the reasons varied).
There was much support from law societies, law firms and solicitors' associations for an appointment body independent of Government. The Treasury and the DTI, supported by the Law Society, suggested some form of re-accreditation system which could result in the removal of the award if performance declined. The Judiciary and the Bar were against such a system. There was a range of views about the value and quality of the present consultation system.
REVIEW OF THE REGULATORY FRAMEWORK
The consultation document announced a review of the regulatory framework. The Government is aware that the legal services market is changing in nature and that some of the matters discussed in the consultation (for example, removing the barriers to legal services being provided through new business structures) would add to and accelerate that change. The current regulatory framework, involving a wide range of regulators with overlapping powers and responsibilities, is complex and in some respects is not delivering what the public has a right to expect. The Government therefore decided to undertake a review of the regulatory framework for legal services, the first step being to settle the detailed parameters of such a review and the machinery for completing it.
RURAL PROOFING
The Government is committed to ensuring that all its policies take account of specific rural circumstances and needs. We asked to what extent any impact future schemes might have, could affect smaller practices and whether this might create disproportionate impact on access to legal services for those in rural communities. We shall have to assess:
whether resulting policy is likely to have a different impact in rural areas from that elsewhere, because of the particular characteristics of rural areas; and
where necessary, what policy adjustments or compensations might have to be made to reflect rural needs and circumstances (bearing in mind the likely costs).
REGULATORY IMPACT ASSESSMENT
In taking matters forward and developing policy after the consultation, the information from responses to the consultation will be used to inform any regulatory impact assessment that will be needed.
IN CONCLUSION
The next step for the Government is to decide how to take forward the issues raised. In doing so, it will have to gauge the impact on the market in legal services and the impact on consumers.
We are grateful to all of the respondents for the care and time they took in responding the consultation paper.
Section 22 of the Solicitors Act 1974 reserves conveyancing work to solicitors and, since the Administration of Justice Act 1985, to licensed conveyancers1. However, the Courts and Legal Services Act 1990 provided for further competition to be introduced by means of an exemption from Section 22 of the Solicitors Act. This would allow, subject to appropriate regulation, other potential providers of conveyancing services (e.g. banks and building societies) to be designated as 'authorised practitioners' to undertake conveyancing work.
In his report, 'Competition in professions', published March 2001, the Director General of Fair Trading stated: "Fresh consideration should be given to implementing the parts of sections 34-52 of the Courts and Legal Services Act not so far implemented, with a view to increasing competition in the provision of conveyancing services."
In its consultation paper 'In the public interest?', the Government said that it favoured opening up the conveyancing market further, and, in principle, was willing to incur the cost of establishing an independent regulator, if that represented good use of public funds and the public interest could be protected. The Government sought views on whether the opening up of the conveyancing market to new providers could be achieved successfully by implementation of sections 34-52 of the Courts and Legal Services Act 1990. Under these provisions a range of practitioners would be possible, including banks and building societies. These would be authorised and regulated by an Authorised Conveyancing Practitioners Board. The Board would need to prepare detailed operating procedures and rules for approval by the Lord Chancellor. These would include:
arrangements for the authorisation of practitioners
regulations about the competence and conduct etc of authorised practitioners
arrangements for ensuring no conflict of interest arises
the setting up of a Conveyancing Appeals Tribunal to hear appeals from any person aggrieved by certain decisions of the Board
a Conveyancing Ombudsman Scheme
compensation arrangements
investigation, enforcement and intervention powers
There were 185 responses to the consultation. Of these 128 commented on proposals to use existing statutory powers to open up the conveyancing market to new providers. Just over half of these (68) chose to answer specifically one or more of the questions raised in the consultation on the Authorised Conveyancing Practitioner scheme. The remainder of respondents chose to express their views by way of general comments. It is difficult to attribute some of the general comments made to each of the questions raised in the consultation. This chapter therefore sets out below, first, the responses to each question raised, followed by a breakdown of the points made by respondents in the general comments.
| Question 1 - What is the likely level of demand from other potential providers (e.g. banks and building societies) to be able to offer conveyancing services under the arrangements provided for in sections 34-52 of the Courts and Legal Services Act? Would this demand be affected if the Law Society were to allow employed solicitors to provide services (including conveyancing services) to the public? Is the introduction of e-conveyancing likely to affect the demand? |
A number of respondents expressed the view that it was difficult to predict the likely level of demand if the Authorised Conveyancing Practitioners Board were to be established. There were 57 specific responses to this question. Most of those (60%) thought there would be a good degree of interest from new providers in becoming authorised under the scheme. There were some concerns expressed, in particular that "lighter" regulation of Authorised Conveyancing Practitioners (when compared to existing providers) would be unfair and that consumers would suffer because of a lack of safeguards. There were also concerns that Authorised Conveyancing Practitioners (e.g. banks) would "cherry pick" straightforward work leaving more complex and/or less profitable work to existing providers. Most of the respondents to this question were lawyers or organisations representing lawyers. However, the response did include two potential institutional providers.
A smaller number of those who responded specifically to the question (35%) felt that, while there may be an initial flourish of interest, there would not be any significant or sustained interest in the scheme, particularly if Authorised Conveyancing Practitioners were regulated to the same degree as existing providers of conveyancing services. Again these responses came almost exclusively from lawyers or organisations representing lawyers. But it did include one response from a potential institutional provider.
The introduction of e-conveyancing was not considered to be of major significance, although a small number of respondents felt it might attract more potential providers to join the scheme. Equally, of those respondents who addressed the issue, most did not consider that allowing employed solicitors to provide services (including conveyancing services) to the public would affect significantly the likely "take up" of the Authorised Conveyancing Practitioners scheme.
| Question 2 - Are these safeguards [those set out at Section 40 of the Courts and Legal Services Act 1990 which provide for the Lord Chancellor to make regulations about the competence and conduct of authorised practitioners] sufficient to protect the consumers' interests? Will they be sufficiently flexible to avoid excessive regulation when separate rules for electronic conveyancing have been introduced? |
Of those who responded specifically to the question (59), the majority (56%) did not believe that the safeguards would be sufficient to protect consumers. However, some commented that it was difficult to reach a considered view in the absence of detailed regulations, which would need to be prepared by the Authorised Conveyancing Practitioners Board. These responses were almost exclusively from lawyers or organisations representing lawyers. Notably, the General Council of the Bar took the view that: "The obligations placed upon solicitors both by professional regulation and the common law are onerous and, given that residential conveyancing involves the largest financial obligation undertaken by most households, rightly so."
An additional 15% responded by saying that Authorised Conveyancing Practitioners should be regulated to the same degree as solicitors. Again these responses were almost exclusively from lawyers or organisations representing lawyers. But it did include one response from a potential institutional provider.
Some 28% of those who responded to the question thought the safeguards would be both flexible and sufficient to protect consumers' interest provided they were properly enforced. A number of incidental points were raised by individual respondents:
that the Authorised Conveyancing Practitioners Board should be charged with regulating all conveyancing activity,
that setting up the Authorised Conveyancing Practitioners Board would create another regulator and add to the existing regulatory maze, and
that Authorised Conveyancing Practitioners would lead to a loss of professionalism and "personal service".
Most of the responses came from lawyers or organisations representing lawyers. However, about 25% were from potential institutional providers or organisations representing non-lawyers.
| Question 3 - If the Government were to introduce the authorised conveyancer scheme, would there be any likely impact on solicitors' firms, particularly the smaller practices? And if so, is any impact likely to have implications for the location of firms, particularly in relation to the availability of access to legal services for those in rural communities? Is there likely to be any innovation in service delivery to rural communities as a result of these changes? |
Almost all of those who responded specifically to this question (59) considered there would be a significant impact on solicitors' practices if the Authorised Conveyancing Practitioners scheme were to be introduced. Most felt this would result in the centralising of solicitors' firms in large conurbations, with smaller high street practices, and those in rural areas, feeling the pinch most. Again, most respondents felt there would be implications for access to justice, particularly for those living in rural communities. Some respondents also felt that the closure of smaller/rural practices would lead to a reduction in consumer choice, that institutional providers might "cherry pick" the more profitable services, or seek to "hide" the true cost of their services by making them part of wider package deals (e.g. mortgage services). However, one respondent took the view that lifting restrictions in other areas (e.g. facilitating multi-disciplinary partnerships) might reduce the impact on solicitors' firms.
Almost all responses were from lawyers or organisations representing lawyers. However, about 7% of the responses came from new institutional providers or organisations representing non-lawyers.
| Question 4- What do you perceive may be the benefits that could flow from widening provision of conveyancing services through implementation of this legislation? Are there disadvantages? |
Of those who responded specifically to this question (57), most (67%) considered the disbenefits of introducing the Authorised Practitioner Scheme would outweigh the benefits. Particular concerns included:
loss of small firms of solicitors with implications for access to justice, particularly in rural areas,
conflicts of interest if "package deals" by lenders are permitted,
loss of independent advice to consumer,
lack of ability of Authorised Conveyancing Practitioners to deal with "follow on" or ancillary work/difficulties, and poor quality of work generally,
loss of the trust which exists between existing practitioners on which conveyancing depends,
lack of consumer protection.
These responses were almost exclusively from lawyers or organisations representing lawyers.
The remainder of respondents (33%) said they could see benefits in the introduction of the scheme. Particular benefits identified included:
greater competition/choice of provider and the driving out of inefficient providers,
the speeding up of e-conveyancing (large institutions being able to make the investment needed),
a quicker and more efficient service,
a "one stop" shop for conveyancing/mortgage services.
While most of these responses were from lawyers or organisations representing lawyers, about 40% came from new institutional providers or organisations representing non-lawyers.
Of the 128 respondents who commented on proposals to use existing statutory powers to open up the conveyancing market to new providers, 90 chose to make general comments either instead of, or as well as, answering specific questions raised in the consultation document.
Of the respondents that expressed general comments:
41% felt that existing providers would not be able to compete with large institutional providers and that this would have a significant impact on solicitors' firms, particularly smaller practices and those in rural areas, and that this could have implications for access to justice. One respondent felt that lawyers from ethnic minorities would suffer disproportionately as a result of this, given that most tend to be employed in smaller practices. Most of these responses came from lawyers or organisations representing lawyers. But the responses did include one from a potential institutional provider. The Legal Services Commission commented: "…the Commission is not at all averse to change or to exploring new ways of working, indeed just the opposite. Nevertheless, given that private practice firms operating under contracts with the Commission currently form the back-bone of the publicly-funded system, it will be vitally important not to make changes without a strategy being in place to address any resulting problems for legal aid. If the Law Society and Legal Aid Practitioners Group are right about the effect of the proposed changes on rural and high street practices, it might require very substantial increases in legal aid rates, with serious consequences for the legal aid budget, to avoid that consequence. We therefore agree that further evaluation needs to be conducted to establish the likely consequences of relaxation of regulation in this area, and urge that any programme of change needs to be managed carefully if the aims of the Community Legal Service and the Criminal Defence [Service] are not to be undermined."
The General Council of the Bar also commented: "Opening the market" for conveyancing and for probate services would be likely to undermine the viability of smaller firms of solicitors if banks or building societies succeeded in attracting away work. The problems of conflict and regulation will have to be overcome. The consumer would be the loser through the restriction that would be brought about in the local availability of legal advice as a result of the loss of smaller firms. The loss of smaller firms would be likely to impede the development of the Community Legal Service because smaller firms are essential members of the Community Legal Service Partnerships (CLSPs)."
27% of respondents felt that the conveyancing market was already very competitive, and that if the Authorised Conveyancing Practitioner scheme was introduced it would lead to an increase in "conveyor belt conveyancing" with poor levels of service to clients. Most of these responses came from lawyers or organisations representing lawyers. But the responses did include three from non-lawyers.
25% expressed concerns about the level of regulation to which Authorised Conveyancing Practitioners would be subject, with most believing that they should be regulated to the same standard as solicitors. Most of these responses came from lawyers or organisations representing lawyers. But the responses did include one from a potential institutional provider. The Legal Services Ombudsman commented: "I believe that any regulatory arrangements for the new providers will need to ensure that fairly rigorous standards of service and conduct are maintained. The obligations currently imposed on solicitors are a good benchmark for such standards". The Legal Services Ombudsman also expressed a concern that introduction of the proposed arrangements would add to the existing "regulatory maze" for legal services.
17% of respondents considered that if large institutions became Authorised Conveyancing Practitioners they would use their financial muscle to dominate the conveyancing market. For example, they would seek to tie their customers into package deals (e.g. mortgage deals), and disguise the true cost of their services. Most of these responses came from lawyers or organisations representing lawyers. But the responses did include one from a potential institutional provider.
14% of respondents did not consider there was a demand for the Authorised Conveyancing Practitioner scheme. Some were concerned that new providers might "cherry pick" simpler, or more lucrative work. These responses came principally from lawyers or organisations representing lawyers. But about 15% of the responses came from potential institutional providers or organisations representing non-lawyers.
7% felt that the proposed level of regulation of Authorised Conveyancing Practitioners would be sufficient to protect the public. They also felt that Authorised Conveyancing Practitioners would be likely to have access to capital needed to develop their businesses, would employ modern business techniques, and would provide a quicker and more efficient conveyancing service. These responses were exclusively from organisations representing non-lawyers.
6% of respondents were concerned about the potentially significant cost of setting up the Authorised Conveyancing Practitioners scheme and believed it would do little but add to the existing "regulatory maze". Responses were from lawyers or organisations representing lawyers.
The Law Society concluded that: "Having carefully weighed up the arguments presented in the consultation paper, the Society has concluded that in the wider public interest it is unable to support the introduction of ACPs [Authorised Conveyancing Practitioners] for a number of reasons". These are set out in detail in the Law Society's response.
While the Department of Trade and Industry confirmed the Government's position that it favoured opening up the conveyancing market to additional providers, it also noted that: "…the market [for conveyancing services] may have changed since the Act [Courts and Legal Services Act 1990] was introduced in 1990 and e-conveyancing will have an impact on the future provisions of services" and it concluded that: "…the Regulatory Review should be charged with examining what is the appropriate way to regulate conveyancing services, taking into account how the existing regulatory framework could be enhanced to deliver more effective consumer protection."
Most respondents thought there would be a demand from new providers wanting to join the Authorised Conveyancing Practitioners scheme. But a significant proportion of respondents did not expect that to be sustained beyond an initial flourish.
Most respondents did not consider that the Authorised Conveyancing Practitioners scheme provided enough safeguards to protect consumers, and took the view that Authorised Conveyancing Practitioners should be regulated to the same degree as solicitors. However, about a quarter of respondents considered the safeguards would be sufficient.
Almost all respondents considered there would be a significant impact on solicitors' practices, with smaller high street practices and those in rural areas feeling the pinch most. Again, most respondents felt there would be implications for access to justice, particularly for those living in rural communities.
About two thirds of respondents considered there were more disbenefits to introducing the Authorised Conveyancing Practitioner scheme, with the remaining third taking the view that there would be a net benefit in introducing the scheme.
Section 23(1) of the Solicitors Act 1974 prevents any unqualified person (i.e. persons other than a solicitor, barrister or duly certified notary public) from directly or indirectly, drawing or preparing for fee, gain or reward, any papers on which to found or oppose a grant of probate or letters of administration. If implemented Sections 54 and 55 of the Courts and Legal Services Act 1990 would amend section 23 of the Solicitors Act 1974 by opening up the classes of institutions or persons who could undertake this (paid) work. Section 54 of the Courts and Legal Services Act 1990 was intended to provide that institutions such as banks, building societies and insurance companies should be allowed to provide probate services. Section 55 of the Act would also enable the Lord Chancellor, subject to an approval procedure set out at Schedule 9 to the Act, to add to the list of approved bodies whose members should be regarded as qualified to provide probate services (e.g. licensed conveyancers, legal executives or other body approved under Schedule 9 to the 1990 Act).
In his report, 'Competition in professions', published March 2001, the Director General of Fair Trading suggested that consideration should be given to the implementation of both Sections 54 and 55. He said: "Fresh consideration should be given to the implementation of section 54 and 55 of the Courts and Legal Services Act to allow banks, building societies and insurance companies to provide probate services. Currently, such organisations may provide probate services when named as executors of a will, but they may not be instructed to act as agents of an executor. Implementation of sections 54 and 55 would be likely to increase competition in the market for probate services."
In its consultation paper 'In the public interest?', the Government said that it favoured opening up the market for probate services further and, in principle, was willing to incur the cost of so doing if that represented a good use of public funds and the public interest could be protected.
There were 185 responses to the consultation. Of these, 122 commented on proposals to use existing statutory powers to open up the probate market to new providers, and about half of those (63) chose specifically to answer one or more of the questions about opening up the market for probate services. The remainder of respondents chose to express their views by way of general comments. It is difficult to attribute some of the general comments made to each of the questions raised in the consultation. This chapter therefore sets out below, first, the responses to each question raised, followed by a breakdown of the points made by respondents in the general comments.
| Question 5 - If section 54 of
the Courts and Legal Services Act were implemented it is unlikely
that banks, building societies or insurance companies would be (or
could be) regulated in the provision of probate services by the Financial
Services Authority. If this is the case, the only regulatory control
over these bodies would be the condition that they are a member of,
or otherwise subject to, a scheme which: |
52 respondents chose to answer this specific question. Of those, 79% did not consider that proper controls could be exercised over any new providers authorised under the provisions of Section 54 of the Courts and Legal Services Act 1990. Many felt conflicts of interest would arise and that there should be specific regulation to deal with those and that overall the change would not be in the consumers' interest. Most respondents also felt that any new providers should be regulated, in the provision of probate services, to the same degree as solicitors. Most of these responses were from either lawyers or organisations representing lawyers. However, it did include one response from a non-lawyer and one from a potential institutional provider.
10% of respondents considered that the proposed controls were sufficient. Most of these responses (75%) came from non-lawyers or potential institutional providers.
A small number of respondents (about 5%) expressed additional concerns that if the scheme were to be adopted, and there was any significant take up by new providers, there could be resulting closure of many solicitors' practices, many of whom relied on a steady flow of probate (and conveyancing) work to support their less profitable, publicly funded, work. The respondents considered that there could be resulting implications for access to justice if the scheme were introduced.
Again a small number of respondents (about 5%) expressed the concern that banks would "cherry pick" more profitable work.
| Question 6 - Is the procedure set out at Schedule 9 of the Courts and Legal Services Act 1990, under which the Lord Chancellor may add to the list of 'approved bodies' whose members should be regarded as qualified to provide probate services for reward, sufficient to ensure there is adequate protection for consumers? |
Of the respondents who chose to answer this specific question (53), 77% did not consider that the approval procedure at Schedule 9 to the Courts and Legal Services Act 1990 provided sufficient regulatory control to protect consumers. Most considered that the level of regulation should be the same as it is for solicitors providing probate services. Reservations expressed included concerns about the potential for dishonesty and negligence. Most responses were from lawyers or organisation representing lawyers. But there were two responses from non-lawyers and one from a potential institutional provider.
20% of those who responded specifically to the question did consider that the level of regulation provided for by Schedule 9 to the Courts and Legal Services Act 1990 would be sufficient to protect consumers. Most of the responses came from lawyers or organisations representing lawyers, but about 30% came from non-lawyers including potential institutional providers.
A small number of respondents (about 3%) expressed a concern about the need to ensure the sufficiency of qualification and training arrangements maintained by any new providers, and the concern that smaller/rural solicitors' practices would suffer if there was any significant take up in the scheme.
| Question 7 - The broad range of regulated activities by solicitors requires high levels of regulation. This may lead to higher costs which are passed on to consumers in the form of higher prices for services provided. The lower regulatory burden applied to new providers of probate services, approved under Section 55 of the Act, may lead to lower prices to the consumer, but do they provide sufficient protection for consumers? |
Of the respondents who chose to answer this specific question (45), 89% did not consider that the level of regulation which would apply to those new providers approved under Section 55 of the Courts and Legal Services Act would be sufficient to protect the public. Some considered that lesser regulation would lead to abuses and that there should be a level regulatory playing field in respect of existing and new providers. The need for appropriate indemnity cover was also commented on. The responses were from lawyers or organisations representing lawyers.
9% of respondents considered that the level of regulation provided for by Schedule 9 to the Courts and Legal Services Act would be sufficient to protect the consumers' interest. These were from non-lawyers including potential institutional providers or bodies representing non-lawyers.
One potential institutional provider also commented that, because it was being proposed to open up only a small part of the probate process, any change would be likely to have very little cost impact in the provision of probate services.
A further potential institutional provider also noted that there had been a limited take up in the licensed conveyancer scheme provided for by the Administration of Justice Act 1985 (there were 762 licensed conveyancers in April 2002) and wondered whether the public might prefer to use a lawyer for certain types of work including probate.
| Question 8 - What is the likely level of demand from other potential providers to be able to offer probate services provided for by either section 54 or section 55 of the Courts and Legal Services Act and how would this demand be affected if the Law Society were to allow employed solicitors to provide services (including probate services) to the public? |
Of the respondents who chose to answer this specific question (44), 61% considered there would be likely to be a take up in the scheme by new providers, but most of these did not believe that the change would be in the consumers' interest. There were calls for a level regulatory playing field, and particular concerns expressed about conflicts of interest, the increased risk of fraud and the potentially high costs that might be charged by new institutional providers. A small number of respondents expressed the additional concern that if the scheme was adopted, and there was any significant take up by new providers, this could result in the closure of many solicitors' practices, many of whom relied on a steady flow of probate (and conveyancing) work to support their less profitable, publicly funded, work. A few respondents also expressed the concern that new providers might "cherry pick" more profitable work. Most respondents considered there could be resulting implications for access to justice if the scheme were introduced.
About 18% of respondents (mostly lawyers or organisations representing lawyers) did not consider it would be possible to gauge the likely level of interest in the scheme.
A smaller number, about 11%, did not consider there would be any significant interest in the scheme by new providers. Most responses came from lawyers or organisations representing lawyers. But it included one response from a potential institutional provider.
Some 9% of respondents commented that there would be little impact on the probate market or the demand for the scheme if the Law Society were to allow employed solicitors to provide services (including probate services) to the public. 50% of these responses came from potential institutional providers.
| Question 9 - If the Government were to implement the measures provided for in Sections 54 and 55 of the Act, would there be any likely impact on solicitors' firms, particularly the smaller practices? And if so, is any impact likely to have implications for the location of firms, particularly in relation to the availability of access to legal services for those in rural communities? What innovations in service delivery might be made by providers to continue to satisfy customer demand, especially in rural areas? |
Of the respondents who chose to answer this specific question (48), 85% considered that significant probate work could go to new providers and that there would be likely to be a significant impact on solicitors' firms. Some respondents considered that larger firms may centralise their operations in main conurbations, and that many smaller high street or rural practices may be forced to close, with resulting implications for access to justice. However, a small number of these respondents commented that the impact would be dependent upon the level of "take up" by new providers - some expressed the view that it was difficult to see what other new providers would be interested in the scheme.
About 15% of respondents did not consider that there would be any significant impact for solicitors' practices. Some felt this was because many people would still prefer to obtain probate services from a solicitor.
Of the 122 respondents who commented on proposals to open up the probate market to new providers, 58 chose to make general comments either instead of, or as well as, providing specific responses to one or more of the questions raised in the consultation document.
Of the respondents that expressed general comments:
27% expressed a concern that the consumers' interest would not adequately be protected, with many believing that large institutions would put the interests of their shareholders before those of their customers. Some respondents also considered that large institutions may seek to disguise the true cost of their services by means of "package deals". The Law Society expressed in its response the view that "We are opposed to the introduction of authorised probate practitioners because - as the Government has itself indicated - it will not be possible through that route to provide the full range of consumer protections needed for this work.".
22% of respondents considered that there would be a significant impact on solicitors' practices, particularly on smaller firms and those in rural areas. Many of these respondents also considered there would be access to justice implications, either because of the resulting lack of legal services locally, or because many firms relied on a steady flow of probate (and conveyancing) work to support their less profitable, publicly funded work. The Legal Services Commission commented: "…the Commission is not at all averse to change or to exploring new ways of working, indeed just the opposite. Nevertheless, given that private practice firms operating under contracts with the Commission currently form the back-bone of the publicly-funded system, it will be vitally important not to make changes without a strategy being in place to address any resulting problems for legal aid. If the Law Society and Legal Aid Practitioners Group are right about the effect of the proposed changes on rural and high street practices, it might require very substantial increases in legal aid rates, with serious consequences for the legal aid budget, to avoid that consequence. We therefore agree that further evaluation needs to be conducted to establish the likely consequences of relaxation of regulation in this area, and urge that any programme of change needs to be managed carefully if the aims of the Community Legal Service and the Criminal Defence [Service] are not to be undermined."
The General Council of the Bar also commented: "'Opening the market' for conveyancing and for probate services would be likely to undermine the viability of smaller firms of solicitors if banks or building societies succeeded in attracting away work. The problems of conflict and regulation will have to be overcome. The consumer would be the loser through the restriction that would be brought about in the local availability of legal advice as a result of the loss of smaller firms. The loss of smaller firms would be likely to impede the development of the Community Legal Service because smaller firms are essential members of the Community Legal Service Partnerships (CLSPs)."
19% of respondents considered there should be a level regulatory playing field between solicitors and potential new providers. There were particular concerns about standards of service and qualification and a loss of professionalism. In relation to providers authorised under Section 54 of the Courts and Legal Services Act 1990, the Legal Services Ombudsman referred to the concerns regarding regulatory arrangements raised in respect of Authorised Conveyancing Practitioners: "I believe that any regulatory arrangements for the new providers will need to ensure that fairly rigorous standards of service and conduct are maintained. The obligations currently imposed on solicitors are a good benchmark for such standards". However, in respect of practitioners authorised under Section 55 of the Courts and Legal Services Act the Legal Services Ombudsman did not express the same concerns, commenting: "Section 55 deals with the possibility of extending the right to obtain probate to approved bodies, such as those regulating licensed conveyancers and legal executives. Since these practitioners are already established within the existing regulatory framework, I do not envisage any particular problems in giving them the right to provide probate services." The Legal Services Ombudsman also expressed a concern that introduction of the proposed arrangements would add to the existing "regulatory maze" for legal services.
14% of respondents considered that there was already scope for fraud in the delivery of probate services, and that while this generally occurred after the grant of probate (i.e. during execution of an estate) there were dangers in opening up the process as proposed.
12% expressed support for the proposal to open up the market in probate services, seeing no difficulties arising from the introduction of new providers.
10% of respondents did not consider that adequate regulatory control could be maintained over any new providers authorised under Sections 54 or 55 of the Courts and Legal Services Act 1990.
7% of respondents considered that any relaxation of the employed solicitor rules to allow solicitors to undertake conveyancing or probate work for the clients of their employer would create difficulties, in particular, conflicts of interest.
2% of respondents (potential institutional providers) considered they already had cost effective arrangement in place with solicitors' firms and would have little interest in joining the scheme.
While the Department of Trade and Industry confirmed the Government's position that it favoured opening up the probate market to additional providers, it also noted that: "We think the powers in the Courts and Legal Services Act, which would only require bodies to have a redress scheme in place, do not really go far enough in delivering effective protection for consumers and that the Regulatory Review should consider how to address this shortfall."
Most respondents thought there would be a demand from new providers wanting to become authorised to provide probate services.
Most respondents did not consider that there was sufficient protection for consumers included in the arrangements for authorising new providers under either section 54 or section 55 of the Courts and Legal Services Act 1990. Many thought that new providers should be regulated to the same degree as solicitors, and some considered that existing controls should be tightened. However, 20% of respondents considered the safeguards were sufficient to protect consumers.
Almost all respondents considered there would be a significant impact on solicitors' practices, with smaller high street practices, and those in rural areas feeling the pinch most. Again, most respondents felt there would be implications for access to justice, particularly for those living in rural communities.
In the consultation, we considered the restrictions in legislation that inhibit solicitors in England and Wales from developing new business models. We were concerned with the appetite for, and the effects of, possible change in the legislation and with the extension of the provision of legal services by employed solicitors.
We sought views on whether the Law Society powers to regulate solicitors and solicitor partnerships should be broadened to enable them to regulate non-solicitor partners and any business entity through which solicitors provide services, irrespective of its structure or ownership.
118 specific responses were received to this chapter.
| Question 1 - What is the likely level of demand from other potential providers (e.g. banks and building societies) to be able to offer conveyancing services under the arrangements provided for in sections 34-52 of the Courts and Legal Services Act? Would this demand be affected if the Law Society were to allow employed solicitors to provide services (including conveyancing services) to the public? Is the introduction of e-conveyancing likely to affect demand? |
| Question 8 - What is the likely level of demand from other potential providers to be able to offer probate services provided for by either section 54 or section 55 of the Courts and Legal Services Act and how would this demand be affected if the Law Society were to allow employed solicitors to provide services (including probate services) to the public? |
Although questions 1 and 8 were not part of the consultation chapter on employed solicitors and Multi-Disciplinary Practices (MDPs), the responses are relevant here, as they contain express references to the issues discussed.
54 respondents addressed the employed solicitor issue in either question 1 or 8 (or both). A majority of respondents stated that such a change would lead to increased demand from other potential providers, but a significant minority felt that this would not be the case. A considerable number of respondents raised concerns about the ethical issues, such as independence, surrounding possible relaxation of the rules on employed solicitors, when answering these questions.
| Question 10 - How much use do you make of any facility in present day legal services to obtain different services from the same source and what are the services involved? |
This question draws on the fact that at present many solicitors' firms also provide services ancillary to their main work, including financial and consulting services, and investment business.
There were 27 specific responses to this question. Most of the respondents were providers of legal services, with only a handful of users of legal services responding. The answers were therefore slanted more towards the provision of ancillary services than the use made of such services.
4 respondents stated that they made no use of any present facility (3 of these respondents were providers). 4 users said they used a range of different legal services from the same provider but did not mention using other affiliated services. One user had purchased services from MDPs abroad; their choice of firm was influenced by the quality of the professional service provided and not by the firm's status as an MDP. Another user said that "there are occasions where it would assist if other professional services, such as accounting or surveying could be obtained from the same source".
A number of providers of legal services set out the affiliated services they supplied. These ranged from financial and consultancy services to property services. One provider said that they used to offer property services but stopped in 2000, despite the service being popular, because of unsatisfactory changes to practice rules. The Motor Accident Solicitors' Society stated that they provide a diverse range of affiliated services connected to their area of law including treatment, evidence and car repairs.
General comments were that commercial clients liked the one stop approach but there was evidence that clients are using greater selectivity when choosing the teams they consider to have the right talents. It was thought that people would go wherever they felt they could find the right skills and specialisation. One respondent was of the opinion that those of limited experience would use services from any source they thought would offer a cheaper rate.
| Question 11 - In new business models, should the Law Society be empowered to regulate non-solicitor partners, directors and shareholders/owners, and non-hundred per cent solicitor controlled businesses? Question 12 - Do you object or agree in principle to the Law Society being enabled to regulate new style business structures and their participants whether or not they are solicitors? |
As both of these questions dealt with the Law Society's role as regulator they are dealt with together. 62 respondents answered question 11, while 61 answered question 12. It should be noted that the majority of replies came from solicitors or other organisations with links to the legal profession and the Law Society. Over 50% of respondents to both questions either agreed or strongly agreed that the Law Society should be empowered to regulate new business models and any non-solicitors involved in them. Those in favour of extending the Law Society's regulatory role provided a diverse set of arguments for why this should occur. Some thought that it would be important to have one regulator, and that the Law Society was best placed to perform the role. Others thought that it was the only way to protect solicitors' independence and professional values. The Law Society itself suggested that it could act as sole regulator as an interim measure, with shared regulation occurring later.
Those neutral to the proposition indicated that it was important that new business models were regulated correctly, but that who regulated was less important than the standards that were expected. Others expressed concern about how the Law Society may fund their extended regulatory role.
Many respondents who did not support the Law Society expanding its regulatory remit believed that other professionals would not accept regulation by another body. This feeling was particularly strong amongst other professional bodies who replied to the consultation. There was a general call for a "super regulator" that would regulate all professional services provided by MDPs, although views on the exact nature and role of the body differed from respondent to respondent. Some simply suggested a common regulator was needed, others that professional bodies should work together to develop common codes of practice. The most radical suggestion was the creation of an independent regulator for all the professions, similar to the Financial Services Authority.
| Question 13 - What, if any, safeguards should be fundamental to any development of new methods of supply of legal services? |
63 specific responses were received to this question. A large number of the answers dealt with values respondents felt should be safeguarded. The values that emerged as important, with many of them being cited repeatedly, were:
Independence and impartiality of advice
professionalism, expertise, service and value
avoidance of conflict of interest
duty to the court.
honesty, integrity and probity
transparency and openness
confidentiality and privilege
These values were reinforced by a number of respondents specifically stating the importance of retaining Solicitor's Practice Rule 1, (which deals with independence/integrity, the duty to act in the best interest of the client, the good repute of the profession, the solicitor's proper standard of work and the duty to the court).
Most respondents agreed that to preserve these values, adequate regulation was required. Referring back to questions 11 and 12 some respondents, including the Law Society, said that the safeguards presently in place should remain. There were a couple of calls for regulation to be taken from the Law Society and given to an independent body. Many answers specified safeguards that should be incorporated into a regulatory system. These included:
Indemnity Fund
Compensation Fund
Training
Code of conduct
Safeguards for clients money
A complaints system, disciplinary powers and intervention powers
Other general comments included one respondent who felt that there should be a system of licensing for certain legal services which could be revoked if necessary and one respondent specifically referred to a ban on legal firms and auditors working together as a necessary safeguard.
The majority of respondents felt that there should be the same regulation for all providers of legal services, to ensure a level playing field. There were other views expressed about the level of regulation but these were picked up in more detail in answers to questions 14, 15 and 17.
| Question 14 - What are the essential safeguards that should not be compromised, if different levels of consumer protection were applied in different models of business offering legal services? |
There were 62 specific responses received to this question. 24 respondents referred back to the answer they gave to question 13 and a further 12 respondents, although not specifically referring to question 13, reiterated the values and components of a regulatory structure given in answer to question 13.
18 respondents, including the Law Society and the Bar Council, held that there should be one set of safeguards; there should not be different levels of consumer protection applied in different models of business. One respondent believed that any advantage given to new providers by offering different standards would prejudice existing providers. 2 respondents said that if differing standards were to be applied, it was essential there was clarity and that consumers understood this.
General comments included one respondent who felt, in addition to current professional rules, Chinese walls should be used as a safeguard when different professions worked together. 2 respondents emphasised the fact that alternative business models need to put the interests of the client first. One respondent felt that the regulation of solicitors was excessive and that "in a free market-place, protection can be by "ABTA-style" bonding. Cheap suppliers would not be bonded, or only to a lower level". The Treasury said that competition was the best way of protecting the consumer. The DTI suggested that both this question and question 13 would be best dealt with in the review of the regulatory framework for legal services.
| Question 15 - Should multi-disciplinary practices be bound by the same practice rules as present day firms? |
There were 63 specific responses received. The majority of respondents (49) felt that MDPs should be bound by the same practice rules as present day firms. There were only 6 respondents who expressly dissented from this, giving reasons ranging from thinking that the present rules provided inadequate protection for clients, through to the other end of the spectrum, that solicitors are overregulated and the rules needed to be relaxed.
Despite the fact that the majority believed MDPs should be bound by the same rules as present day firms, a number of respondents then went on to add that the present rules would need some modification in order to accommodate MDPs properly.
The Treasury and DTI both felt that this was a topic that should be covered in the regulatory review.
| Question 16 - Do you believe that the present set-up of firms and employed solicitors discourages or prevents entry into the profession of any groups of people? If so which and why? |
There were 56 specific responses. The respondents were fairly evenly split between those who thought the present set-up discourages entry and those who did not.
The following factors in the present set-up were thought to restrict entry:
The removal of grants to law students and the expense of training (3 respondents cited this);
the lack of training contracts (4 respondents);
being unable to allow non-lawyers to share in equity or the rewards of the business (4 respondents);
freemasonry (1 respondent);
partnership model being outdated and cumbersome and unattractive to potential new members of the profession (2 respondents).
One respondent considered that the present structure discriminated against ethnic minorities, and another that the present system was elitist and sexist. It was not, however, the opinion of everyone that restricted entry was a bad thing. 3 respondents said that restricted entry was positive, as it filtered out poor applicants or applicants that might bring the profession into disrepute.
Those who maintained the present system did not restrict entry made the following comments. One respondent thought that if an individual with the right aptitude and intellect wanted to become a solicitor, there was nothing to prevent them from doing so; another held that, "the Law Society, through its associations, operates positive discrimination in relation to minority groups (e.g. Association of Women Solicitors, Association of Black Lawyers)"
One general comment received was that the challenges faced by minority groups are the same as in any other area of employment and that the proposals discussed in the consultation would not have an impact. Indeed, other respondents picked up on this and commented that barriers to entry existed, but the problems surrounding these barriers were detached from the issue of new business structures and should be tackled separately.
It was asserted by one respondent that there was more diversity in the employed solicitor sector than in private practice and that there should be research to discover why this is so.
| Question 17 - Is it important to you that different transactions with a solicitor should be covered by the same level of consumer protection? |
There were 60 specific responses to this question. The majority of respondents (48) considered it important that different transactions with a solicitor should be covered by the same levels of consumer protection. One respondent referred to being a solicitor as, "a gold standard which all consumers recognise", and a number held the view that transactions should be governed by the highest level of protection in all cases. The comment was made that it was unfair for the public to be subject to less protection in some areas of work. 3 respondents said that they thought differing safeguards would confuse the public; the Law Society also considered this would erode confidence in the profession. 2 respondents said that all transactions required integrity and honesty and another referred back to safeguards cited in question 13.
There were some who did not think it important to have different transactions covered by the same levels of protection. 2 respondents thought that there should be different levels of protection for different consumers, with a lighter touch needed when dealing with sophisticated clients. There were 2 more, similar responses that stated a practical approach was needed, as some transactions would require more protection than others. One respondent believed that regulation should be tailored to the particular discipline being practised and not set at one level for the whole profession. Amongst other suggestions for differential levels of regulation one respondent suggested that "individual non-lawyers only need to be subject to detailed Law Society regulation where they work in conjunction with lawyers or their work impinges directly on work of the lawyers in the MDP and where such regulation is more stringent than their own professional rules". Another respondent was of the opinion that the important thing in a particular transaction was that the level of protection applied was the same for a private practice solicitor or an employed solicitor. 2 respondents felt that there should be greater protection when there were client funds/money involved in the transaction.
The DTI and Treasury said that they felt this area was suitable for being included in the regulatory review.
| Question 18 - Would you welcome
the development of new methods of supply of legal services? |
Responses to questions 18 and 19 overlapped and so they are analysed together. 64 specific responses were received to question 18. Of the respondents 51 were solicitors (either in private practice or employed), or solicitors' interest groups. 13 replies were received from non-solicitors. There were 50 specific responses to question 19. 22 were solicitors (either in private practice or employed), 24 were solicitors' interest groups or local law societies. Replies were also received from the interest groups for conveyancers and notaries and from two consultancy firms.
In response to question 18 there was a lot of interest in developing new methods of supply with 30 out of 51 solicitors and 12 out of 13 non-solicitors saying they would welcome such developments. 27 solicitors said that they would be interested in providing services through new models.
There were a couple of replies that welcomed new methods wholeheartedly and with a great deal of enthusiasm, commenting that reform would enhance the standing of the legal profession and encourage innovation. These replies suggested MDPs would increase availability of a wider range of skills and experience and offer the advantages of economies of scale. However, the more common response was a qualified one and, whilst welcoming the development of new methods, it was emphasised that there had to be adequate consumer protection (6 respondents). 4 respondents moderated their remarks by stating that everyone must be subject to the same rules and must be able to compete on a level playing field. The Law Society said that preliminary views they had ascertained indicated there would be a number of solicitors interested in providing services through new methods.
There were a number of neutral responses which, whilst not ruling out new methods, indicated that matters needed to proceed cautiously and that all the ramifications of any new model needed to be considered. The Sole Practitioners Group said that whilst some of their members would see the opportunity to share fees with another profession as a means of developing their practice, others would regard it as an anathema and would have concerns about conflict and confidentiality.
13 solicitors/solicitor interest groups said that they would not welcome new methods of supply, whilst 15 solicitors said they were not interested in providing services through new methods. A number of respondents mentioned a lack of demand for new methods, amongst these Preston Law Society, Bedfordshire Law Society and the Solicitors Property Group all saw no evidence of demand. Another respondent commented, "there appears to be no public clamour to provide services through new models".
One respondent thought there were other areas on which the Government should concentrate at the moment, such as enforcement of judgments, rather than looking at alternative business methods. 3 respondents commented that, rather than new business models, they would rather have less regulation of the current system.
| Question 20 - Do you think that the new structures could offer a type of service, or a mix of services, not at present available and for which there is a significant demand? |
There were 61 specific responses to this question. The majority of respondents thought that new structures could offer new types of services. However, the number of respondents who disagreed, or felt they could not offer an opinion because of lack of evidence, did not trail far behind.
Of those who thought new structures could offer new services, 8 respondents referred to the creation of one-stop shops and believed these would be welcomed by consumers. The sort of professional combinations that were thought suitable for a one-stop shop approach were: accountants/solicitors and surveyors/estate agents/solicitors. It was thought the benefits of a one-stop shop approach were that it presented the opportunity for the sharing of costs and could offer a comprehensive service.
One respondent believed the business sector would be the biggest beneficiary of a new approach whilst another commented that new business structures and services could help save rural practices by the creation of "limited practices". Such limited practices could exclude themselves from offering certain types of work (e.g. corporate) and be less heavily regulated and charged less for professional indemnity, helping them stay more profitable.
A number of responses predicted that new types of service could be offered under new structures, but they were unsure that the demand existed for these services. One respondent felt unable to gauge demand without some form of market research being undertaken. A couple of respondents were concerned that under any new structure there would be the risk of firms 'cherry picking' work. One respondent did not consider that any new service would meet a previously unknown demand.
General comments received were that standards and safeguards must be reviewed if new ways of working emerged. One respondent asserted that the issue of alternative business structures was more about having access to a wider pool of talented people to deliver the current type and mix of work. One respondent said, "new structures could offer a mix of services not presently available, for example family law needs lawyers, accountants, IFAs. However … these services can often be provided just as well by separate organisations."
| Question 21 - In considering the development of new models, should such developments be limited to the inclusion of other professionals or widened to include non-professionals? If you believe that restriction to professionals only is important, your reasons for your view would be appreciated. |
63 specific responses were received. More people favoured the inclusion of non-professionals in new models than advocated their exclusion.
The main argument put forward for limiting entry was that professionals are already subject to a degree of regulation meaning the public are provided with some protection. Some respondents considered the introduction of non-professionals would mean the dilution of protection afforded to the public. Regulation was also important to those who argued for the inclusion of non-professionals. They said that they would want to see non-professionals subject to proper regulatory control before inclusion.
Other views expressed by those who favoured limitation to professionals were that a professional ethic existed and that there would be an increased likelihood of conflict of interest if non-professionals entered the equation. One respondent thought that limiting inclusion helped maintain public confidence in the legal system. Another respondent considered that delivery of legal services should be restricted to the legally qualified; the changes that were needed to the system related instead to the method of delivery these professionals could use.
On the other side there were a number of arguments put forward to support the inclusion of non-professionals in any new system. One respondent said that non-professionals are already substantially involved, whilst another was concerned that if non-professionals were excluded this could reduce the take up of MDPs and might exclude highly regarded employees. Exclusion was a concern for the law management section of the Law Society which commented, "Many of the Section's members will have attained their current positions through experience and ability, rather than professional qualification". One firm said they would welcome the inclusion of non-professional practice managers, as being able to offer them partnerships was an issue of status, not just a matter of financial reward.
3 respondents believed there should be a staged introduction of non-professionals. Initially only professionals could be admitted to new structures, with this then gradually being widened to non-professionals if it was felt the scheme was working well.
Some respondents replied that concerns about MDPs would remain whether or not non-professionals were included and another said that the term "professional" needed further clarification.
One respondent offered the cautionary note that the practical difficulties of new models should not be underestimated.
| Question 22 - If the legislation were amended to allow non-solicitor partners, directors and shareholders, should a percentage of solicitor partners, directors and owners be specified? Should there be a majority of solicitors in control of the businesses? Do you want to suggest a percentage? Is this something that should be for the professional rules or should it be framed in legislation? Would specific proportions be necessary to ensure the appropriate level of solicitor practitioner independence and freedom from external pressure? |
60 specific responses were received to this question. More respondents felt that there should be a majority of solicitors in control than felt otherwise.
Reasons given for having majority solicitor control were that it would ensure an ethical culture, integrity and maintenance of standards. It was also believed that a majority was needed to guarantee the independence of the lawyers in a practice. Some respondents who said there should be a majority referred specifically to the Legal Practice Plus model proposed by the Law Society. The Bar Council said that "Only solicitors should exercise significant influence functions (as they have been defined for the purposes of the financial services regulatory regime, e.g. chief executive, chief financial officer, and oversight and apportionment functions)". Another believed that, as well as having a majority of solicitors, in a mixed practice legal services should be ring fenced and handled by solicitors or legal personnel only. The comment was made by a couple of respondents that having a majority of solicitors in control was more important if a firm was holding itself out as a solicitors' practice. A handful of respondents specified actual percentages for majority control, with some going as high as 75% but most specifying 51%.
Arguments proffered by those who did not see the necessity for majority solicitor control were that they were anxious not to stifle outside investment by the inclusion of rules on numbers of lawyers and that insisting on a majority could be viewed as anti-competitive. One respondent did not believe that it was realistic to seek regulatory observance by loading the structure with solicitors whilst another couple thought that if there was appropriate regulation in place or professional ethics, this would be enough to guarantee solicitor independence without insisting on a majority.
One respondent said that it was not legitimate to argue for a majority of solicitors as solicitors in private practice were no more 'free' or 'independent' than their commercial counterparts - they were still driven by profits.
A few respondents set out the fact that they firmly opposed MDPs. One said that it would be against the public interest to have firms of 'quasi solicitors' and that if solicitors wanted to join new style set-ups they could, but the public must be clear that these were business set-ups rather than solicitors' firms.
One deemed the concern to be the protection of the client and conflict of interest.
Most respondents who expressed a preference said that the issue was something for legislation rather than professional rules.
| Question 23 - For clarity for consumers, should a practice using the term 'solicitor' in its name have a majority of solicitor partners /directors/ shareholders? |
59 specific responses were received. Most agreed with the question and said it was important to have a majority of solicitors in control if a practice was using the term 'solicitor'. It was considered that this would help avoid confusion.
Some were more prescriptive and said that, in addition, the name should incorporate the relevant professions contained within the practice and that the professional status of each partner/director should be available on request. It was seen as important that clients of MDPs could readily identify to which profession members of the firm belong and who was regulating them. One suggestion was that the entities should be covered by legislation similar to the Business Names Act 1985.
Some responses stressed the importance of partners in solicitors' firms being regulated by the Law Society or bound by professional rules. A number of respondents said that they did not think mixed partnerships should be described as 'solicitors' at all and that another name should be applied. One respondent suggested the term 'Law Agency'. One said that it was the level of consumer protection that was important, rather than what an organisation was called, and another said "The issue relevant to most consumers is the knowledge of whether the person actually providing the legal service to them is a solicitor. They are less interested about the qualifications held by those owning the organisation from which the legal services are purchased".
The Institute of Trade Mark Attorneys advocated a system similar to that run under the Trade Marks Act 1994, which restricts firms holding themselves out as trade mark attorneys unless all partners are registered trade mark agents or they satisfy prescribed conditions.
| Question 24 - It has been suggested that the quality of non-legal personnel which firms of solicitors can attract, and thus the effectiveness of the competition they can offer in the markets for non-legal services, is constrained by the fact that they cannot currently offer such staff career prospects leading to principle appointments. Do you agree? What, if any, has your own experience been of this? |
54 specific responses were received to this question. The responses were fairly evenly split with the number who agreed attracting non-legal personnel was constrained by the present set-up, coming out slightly in the majority.
Examples cited of difficulties in attracting non-legal staff were that it had been hard to attract finance directors; also that some firms would like to be able to reward financial advisers with partnership: there had been problems with financial advisers leaving firms because they were de-motivated building up a business and not being able to share in its value. Other examples given were that practice managers were hard to recruit and retain as sometimes their careers could not develop, and also some clerks do work with little prospect of advancement. As one respondent put it, "if good staff are [to be] attracted they do want a career path and the inability of solicitors to share fees with non-solicitors can prevent good staff remaining with a firm as there is no perceived career progression". The Law Society said the issue of attracting non-legal staff was one of the reasons why they favoured non-professionals becoming partners. Other respondents said that the present set-up does not encourage investment or long-term growth and that without partnership prospects non-solicitors were more likely to join other firms where they could become partners.
A number of people dissented from this view and said that they had not had any experience of difficulty recruiting non-legal staff and there were many career paths open. One respondent said that there were plenty of opportunities for firms to create career paths with associated benefits if they used some imagination.
It was maintained by a couple of respondents that partnership is becoming a less attractive career option as people recognise the liabilities attached to the position. It was therefore becoming less important to be able to offer staff the chance of partnership.
One respondent put the difficulty in recruiting non-legal staff down to the pressure, currently faced by firms to increase competition and reduce costs.
| Question 25 - If you are a non-solicitor, do you have an interest in entering into MDPs with solicitors, if that were permitted? Do you believe interest exists among other organisations in your field of operation, in entering into MDPs with solicitors? |
There were 21 specific responses to this question. 14 of those responses expressed an interest in entering into MDPs with solicitors. Many of the respondents were solicitors' interest groups who said that they thought some of their members would be interested. 7 said they were not interested and one respondent that it would not benefit the public.
The Bar Council was one of those who said that they would not be interested and thought that permitting barristers to enter into partnerships with others would reduce the independence of barristers, reduce the choice to consumers and cause difficulties in the administration of justice. It would also undermine the 'cab-rank' rule and increase costs.
SIFA (Solicitors for Independent Financial Advice), the interest group for solicitor financial advisers, said, "In our view, if the current prohibition on MDPs were lifted to coincide with the implementation of the FSA's CP 121 and Sandler proposals, a substantial proportion of the existing IFA [Independent Financial Adviser] population, which might otherwise go out of business or tie to a product provider, would instead join the legal profession, thereby avoiding the reduction in the availability of independent financial advice which would otherwise result".
| Question 26 - Should employed solicitors be allowed to undertake reserved work, unreserved work, or both, for third parties? |
61 specific responses were received and the majority of these advocated employed solicitors being allowed to undertake reserved and unreserved work for third parties.
Comments made by those in favour were that they would welcome employed solicitors being allowed to undertake both reserved and unreserved work, subject to the proviso that they were fully regulated by the Law Society and fully covered by indemnity insurance. These two safeguards for the consumer were referred to by many of the respondents.
One respondent wanted to see employed solicitors undertaking both types of work, but would want to make sure it was on equal terms with private firms. Another supporter said it would be essential that professional obligations superseded all other obligations. The Treasury held that allowing employed solicitors to undertake both types of work for third parties is key to increasing competition in the market and that competition is the best way of protecting the consumer.
Those that did not think employed solicitors should be allowed to undertake reserved and unreserved work repeatedly argued that, if employed solicitors were allowed to do this work for third parties, then conflicts of interest would arise between the duty to the employer and duty to the client and it was difficult to see how the public could be protected from such a conflict. One respondent was worried that the indemnity insurance position had not been fully considered.
One respondent argued that employed solicitors should not undertake reserved work and should not be regulated by the Law Society, instead they should be governed by the law of contract. Other general comments were that the decision to allow employed solicitors to undertake both types of work would depend on the structure and type of business. Another asserted that there should be changes to ownership rules that would make Practice Rule 4 redundant.
| Question 27 - Will trainee solicitors be interested to join such enterprises? Are there any perceived benefits over private practice for entrants to the profession? |
57 specific responses were received. A majority thought that trainee solicitors would be interested in joining such enterprises. It was commented that there was a vast untapped resource of people with legal qualifications unable to secure contracts. Given the shortage of training contracts available, it would be unlikely that there would be any problem recruiting trainees to MDPs (although whether this would be the case long term was questionable). It was thought by some that in-house work has much to offer the trainee. One commented that it was a more secure career path and had more opportunities for diversification. Another thought that this would tempt trainees who would be attracted by the "risk adverse" route of being an employed solicitor. The benefits of security, pension arrangements and lack of personal liability were also pointed out. Others thought that wider commercial experience would be offered and that this might produce more commercially aware trainees. Many of these organisations would have the investment capital to offer better opportunities and facilities. Some considered that take up of training contracts would depend on the employer and the terms offered and opportunity for career progression.
A number of respondents expressed concern that trainees might not be able to obtain the necessary diversity of training in a non-solicitor organisation. One respondent worried there would be potential disadvantages if there was not scope for training for general practice and that the scope of training would become more restricted as growth focused on core profit areas. Some felt that trainees being able to get wider experience and more management experience would offset the loss of specialist training.
The only identified trainee solicitors to reply to the question were the Trainee Solicitors Group. They said that whilst "the number of training contracts might be increased, it will have a profound effect on the high street practitioner. The TSG is fearful that the creation of MDPs may lead to a reduction in the number of training contracts offered by high street firms, as they will no doubt struggle due to the increased competition. The MDPs will be able to offer higher remuneration, potentially better prospects and greater benefits and pension packages. This could also lead to a higher dependence on business/management skills rather than on legal skills such as advocacy and negotiation."
| Question 28 - Would new style business models encourage more diverse entry into the profession (for example in class, race, sex?) |
56 specific responses were received. The majority remained unconvinced that new models would encourage diverse entry.
9 respondents thought that the profession had a good record on diversity and that recent initiatives by the Bar Council and Law Society have already had a positive effect and may have addressed any issues.
A number of respondents commented that the main barrier to diverse entry was the cost of training and the amount of student debt; they felt that the factors that encouraged diversity were adequate funding, educational chances and experiences. One respondent commented that the increasing costs of qualifying meant that the profession was becoming progressively more middle class. Another suggested new models would help if they provided sponsorship to those from deprived areas and one felt there was an increased chance of diversity if MDPs were to include non-professionals.
Some did, however, think that different business models would encourage innovation, diversity and flexible working. One thought that the profession as it stands is elitist and sexist. The comment was also made that customer service organisations are light years ahead of the legal profession on recruitment issues.
| Question 29 - What features would you like to see in such models to encourage entry? |
46 respondents gave a variety of different answers to this question.
A few respondents said that they would not want to put forward suggestions for encouraging entry, as they did not agree with the whole premise of MDPs.
Popular suggestions to encourage entry were the provision of a proper career structure, also the offer of training contracts, and companies paying legal practice course fees or offering grants and bursaries to students. One respondent suggested that the training contracts should be altered to allow trainees to spend time with non-solicitors and another that entrants should be entitled to be members of more than one professional body.
Some respondents specifically cited the adherence to equal opportunity and anti-discriminatory policies as important in encouraging entry. It was also considered that the profession needed to act as a meritocracy when selecting entrants. One respondent held that there needed to be changes in the image of the profession as at present it was seen as stuffy and middle class, and this could put off entrants.
Two respondents felt that the ability to bring in outside investment and to be able to have non-solicitor principals as directors and partners was important. There were some thoughts on the type of business structure that would encourage entry; limited companies were suggested and the suggestion was also made that there could be some form of licensing to allow people who show proficiency in a particular subject to be allowed to practice under a limited certificate.
Some considered the prospect of exciting opportunities, variety and flexibility would all entice entrants.
The Law Society's response, adopted by many respondents was: "It is important that those employing solicitors to provide legal services to the public should not operate as "factories", but should be - and be seen to be - fully professional legal service providers. They would need to be able to offer a range of practice to trainees, to enable them to meet the requirements of their training contracts leading to qualification and to ensure that entrants to the profession are trained as fully rounded lawyers. To attract both trainees and solicitors, organisations would need to be clear about the services which they offer to the public, as well as career structure and prospects. Solicitors would need assurances that their integrity and independence to their clients would not be compromised, and that the employer would not seek to interfere with client confidentiality or the solicitor's duty to the court."
| Question 30 - Do you consider that the quality or cost of the services which clients obtain would be improved if multi-disciplinary practices involving both solicitors and non-solicitors were permitted? |
58 specific responses were received. The responses were fairly evenly split between those who thought that quality or cost would be improved and those who did not.
The Treasury and a number of other respondents believed that the increased competition that would be brought about by the introduction of MDPs would drive down prices and drive up quality. 2 respondents were of the opinion that MDPs could benefit from economies of scale and one also added that duplication costs might be removed.
One respondent said that MDPs would mean clients received more complete and rounded advice. Solicitors would be better able to serve clients. This theme was picked up by the Royal Institute of Chartered Surveyors which stated, "Multi-disciplinary practices are likely to allow major improvements in the delivery of professional services through the cross-fertilisation of ideas, knowledge and experience gained by the combination of different professionals."
The comment was made that improvements may be possible as long as standards are maintained. One suggestion was that quality would improve if non-solicitor customer care managers were allowed into MDPs.
One respondent thought that the benefits would mainly be seen at a corporate level whilst another commented that there probably would be benefits, although solicitors are often less commercial than members of other disciplines in managing their practices. One respondent thought there was the possibility of improvements if firms who have existing tie-ups with, for example, lenders or surveyors were faced with competition by the introduction of MDPs.
One respondent was unsure about the effect MDPs would have, but thought that an incorporated practice or the extended use of employed solicitors could improve levels of service and drive down costs.
A word of caution was sounded by a respondent who considered that in the long term MDPs could be beneficial, but that any new system must be introduced gradually.
A number of those who did not see MDPs as beneficial said that they would expect costs to decrease but at the expense of quality as corners are cut. One respondent was keen to emphasise that whilst there may be some scope for cost cutting, the primary concern must be to the client and the maintenance of quality. Almost as many people argued that costs would go up and quality would decrease. One respondent ascribed increased costs to the possible extra costs of regulation.
One respondent stated that "larger firms might well be able to take advantage of MDPs to provide a wider service to clients and to spread overheads and therefore become more profitable. In our particular area we feel clients have good value for money but firms are hamstrung by the difficulty in raising capital through the partnership structure and this prevents them investing in large sums in items such as technology premises etc."
One respondent thought that over time some benefits could be introduced, but such benefits would need the background of a stable environment and a supportive regulatory structure. Other comments made were that there certainly would not be improvements in quality and costs in rural areas if MDPs were allowed and it was stated that "it may even lead to more confusion for the consumer".
| Question 31 - Will present standards of integrity, confidentiality and independence change if employed and other solicitors are allowed to offer their services through the new business models? |
57 specific responses were received and again, opinion was divided about whether present standards of integrity, confidentiality and independence would change.
Those that thought standards would change expressed concerns about the erosion and lowering of standards as solicitors compete to survive under a new system. There was concern by one respondent that solicitors will compromise the public interest if they bring competitive products to the market.
Disquiet was expressed repeatedly that conflict of interest would be a problem where employed lawyers are concerned. It was felt that the first duty of an employed lawyer would be to their employer rather than to the client or the court, and that it would be impossible to serve more than one master. There was concern that employed solicitors would have pressure applied from employers to bend the rules or push the boundaries where integrity, confidentiality and independence were concerned. It was thought by some that offering full client protection would be impossible if employed solicitors were used and one respondent did not see how large firms would be able to ring-fence employed lawyers to prevent conflicts. One respondent felt that standards were already too low and must improve.
The mantra of those who thought that standards would not change was 'standards must not change'. Emphasis was put on the fact that appropriate levels of regulation must be applied and that standards must be maintained through regulation - this was not negotiable.
The point was made that solicitors in incorporated practices have not seen standards slip and that the regulation needed to be as stringent for employed as for non-employed solicitors. The Law Society warned that erosion of standards could occur if proper regulation was not in place.
| Question 32 - Are there benefits or disadvantages in new models of business for (a) privately funded legal services (b) publicly funded legal services (c) pro bono legal services? What are they? |
56 specific responses were received to this question. 29 of these responses concentrated on disadvantages with the new model whilst 12 focused on benefits. The remaining respondents did not feel able to commit to a firm view saying that time will tell and that research was needed.
Of those that felt there would be disadvantages, the most persistently held view was that publicly funded and pro bono work would suffer as they are not profitable areas of work and so will not attract new service providers. Existing service providers would be reduced as firms try to cut costs and focus on profitable areas to remain viable. There was also the concern that MDPs and big firms would swallow a lot of profitable work on which small firms rely at present to cross subsidise their publicly funded work. It was felt that under the new model the tradition of service before profit would disappear, as the Law Society said, "The Society considers it likely that new entrants to the legal marketplace would be attracted primarily to more profitable areas of work. This could have a negative impact on the availability of services in less lucrative areas. This would impact in particular on social welfare law and other areas falling within the Government's Community Service. The Government would need to ensure that its Community Legal Service is properly funded to ensure sufficient supply. There is a great deal of pro bono work done in the profession, frequently on an informal basis to top up inadequate public provision. Commercially driven entities might not have the same commitment to pro bono work".
There was some acknowledgement amongst many of the respondents who saw disadvantages for publicly funded and pro bono work, that privately funded work would not suffer in the same way and might benefit from new business models.
A number of those that commented positively on new business models said such models would improve the efficiency of firms which in turn would make legal services cheaper and more accessible. Some respondents thought that this improved efficiency would translate itself into making publicly funded work more viable. One respondent saw these efficiencies arising as a result of better career and investment opportunities.
Another respondent believed that the benefits offered by new models of business would be the access to a wider pool of skilled workers. Another that small or specialist firms might face some difficulty but that the benefits presented by new models would outweigh this. One respondent made the point that "commercially driven entities may also have a strong commitment to pro bono work. Many commercial organisations now include "Corporate Social Responsibility" as part of their normal programme of business activities".
| Question 33 - How important are the perceived benefits to you? Are they outweighed by the risks? |
50 specific responses were received.
22 of these respondents saw no perceived benefits or felt that the benefits did not outweigh the risks. The comment was made that the risks are very real and that the potential loss of independent advice outweighs the benefits. One commented that, "benefits appear marginal and in many areas … counter productive and threats are major and virtually certain".
One respondent thought that the only real benefits would be to large corporations whilst another respondent, addressing the issue in their general comments, said that they were worried about large companies using cheap legal services as 'loss leaders'. The Law Society said, "we think that further research is needed before the Government can make a soundly based decision as to whether the benefits of facilitating new entrants are outweighed by the risk of loss of access to locally available legal services."
19 respondents thought that there would be benefits for them in a new model. One said that deregulation would allow firms to become more competitive allowing cost savings to be passed on to the consumer. Another respondent perceived flexibility to be a big benefit but only if the Law Society were to regulate new business structures. The DTI said that the regulatory review should consider how to minimise any risks.
One firm commented that the potential benefits of MDPs are currently undermined in the context of a unitary firm, by restrictions on MDPs in other key jurisdictions. Another respondent commented that they did feel the risks outweighed the benefits to them but they wanted to be able to take that decision for themselves.
There were a number of respondents that felt they could not conclude whether or not there would be benefits to them until further research on new methods had been undertaken.
| Question 34 - If you already operate in a legal practice providing ancillary services, what benefits or disadvantages might new model MDPs offer you? |
There were 24 specific respondents. They included new service providers who offer ancillary services, some law firms and a few interest groups.
The respondents placed more emphasis on the benefits that would ensue rather than on the disadvantages that might spring from new models. 2 respondents believed that they would have greater flexibility to offer a diverse range of services. One commented that these diverse services could be provided without the extra expense and the additional complications of setting up a discrete non-legal subsidiary. Another respondent said that, at present, many ancillary services had become so regulated they had to be dropped. The perceived benefits of being able to offer ancillary services encouraged some respondents to list the services they would like to provide. 2 mentioned further developing combined property selling services whilst one wanted to link more closely with accountants and independent financial advisers. One respondent thought that new model MDPs would enable them to explore reclassifying the mediation and ADR services they provided as non-legal, meaning they would not need to regulate them in the same way.
The benefits perceived by a few of the respondents were that firms would become more customer focused under new models and would be able to provide a better service for clients. The benefit of being able to provide a 'one-stop shop' was mentioned by 2 of the respondents.
The ability to admit non-lawyers as full partners was a benefit highlighted by two respondents. It was believed, (as many had commented upon in question 16) that at the moment non-legal professionals providing ancillary services were frustrated by the fact that they could not share ownership. The Legal Practice Plus model was cited as a good way for this to happen.
2 respondents said that they could see no benefits that new model MDPs might offer them and one said, "To us, the main disadvantage of a MDP is the risk of third party instructions. Much of our practice concerns estate planning and the preparation of wills. Our concern is the risk that instructions for the preparation of wills may be taken by a person who is not suitably qualified to take such instructions, to assess mental capacity or to advise on the options available. However, such risks are not unique to MDPs.... The important point is that a suitably qualified and experienced solicitor should be available within any MDP to monitor and assume ultimate responsibility for such work."
One respondent considered that being an MDP was not as important an issue as being allowed to operate as a normal company with shareholders and directors. Another thought that career opportunities outside the legal sphere might be opened up by MDPs, although it was thought questionable that this would be attractive to solicitors.
One respondent commented, "The paper seems to assume that there will be a radical change. Surely the concept of new business models will not appeal to everyone? We do not believe that the situation will be as problematic as envisaged".
| Question 35 - Would these potential changes reduce or increase the number of solicitors' firms? What implications will the changes have for (a) the provision of privately funded legal services (b) publicly funded legal services (c) pro bono legal services? |
56 specific responses were received and this was one of the few questions on MDPs where a very definite majority view emerged. 41 respondents felt that the number of firms would decrease whilst only 5 respondents believed there would be an increase. The remaining respondents believed that there would be little change in the number of firms and that the status quo would be maintained.
Of those who felt reductions would ensue, the majority view was that these reductions would chiefly affect small firms; more especially small firms providing publicly funded legal services. The Legal Aid Practitioners Group said, "Given the comments from our member firms, we believe these changes would reduce the numbers of solicitors' firms, with those providing legal aid services being heaviest hit. There would be a disproportionate impact in rural areas because firms in such areas are unlikely to be able to specialise or to achieve economies of scale to the same degree as firms in urban areas, and are therefore more likely to depend on cross-subsidy from privately-paid work to maintain the viability of legally aided services."
It was felt by some that MDPs and employed solicitors would 'cherry pick' the profitable areas of work which could put a number of small firms out of business.
Some believed that there would be very little effect on the number of big city firms; if anything they might increase in number.
The point was made by some that the number of traditional high street practices is already in decline. New business models might accelerate this, but decline would continue even under the present system.
There were some commentators who did not view a decrease in the number of firms as a bad thing. They asserted that changes might mean unprofitable firms would be driven out of business but they saw this as good in terms of increasing efficiency and giving the client a better deal. It was stated by one respondent that the increased competition new models would provide would lower costs and widen access to justice. One respondent thought that the number of firms would decrease but that publicly funded services might increase.
Another respondent thought that the number of firms would decrease but that remaining firms would become larger. In a similar vein one respondent commented that the number of firms would decrease but the number of solicitors actually in practice would not necessarily decrease. This respondent also believed that the large commercial firms were the main providers of pro bono work so that an increase in commercial firms might see an increase in pro bono work.
| Question 36 - Would the new business models impact on the ability of individual solicitors to undertake a range of work? Would the new models concentrate the work in the hands of a small number of large firms? Would the new firms concentrate on particular areas, e.g. commercial clients? Will personal, legally aided work and pro bono work be compromised by potential developments? If business goes to bigger new style models, do you perceive any risks in the new business limiting the kinds of work they do or offer? |
There were 57 specific respondents. The general consensus was that new business models would lead to increasing specialisation as firms concentrate on particular areas of work. A number of respondents said that firms would focus on profitable areas, such as commercial work, to the detriment of less profitable areas. Specialisation might mean a narrower focus and could reduce the level of personal service people obtained.
2 respondents believed increased specialisation was already occurring and that this natural commercial trend would just be accelerated by new business models.
Some respondents did not see specialisation as a problem, with one commenting that it would be good for the consumer. 3 respondents considered that, despite specialisation, a wider range of services may emerge from collaboration with non-solicitors in MDPs. One respondent thought that the ability to provide financial advice would help high street solicitors.
It was argued by some that specialisation would lead to work being concentrated in the hands of a small number of large firms. One respondent referred to it as a concentration of 'super firms'. Such a development caused 2 respondents to comment that small firms would have to become more business focused or merge to ensure survival. One respondent was worried there would be a risk to access to justice if there were a small number of large suppliers. There were differing views about how a concentration of large firms would affect pro bono work. Some argued that it would lead to a reduction in pro bono work whilst others thought that an increase in larger commercial firms would mean more firms with the capacity to be able to offer pro bono services.
Even if there was some debate on the effect that would be had on pro bono work there was less debate on whether legally aided work would be compromised. It was held by a number of respondents that access to public legal services would suffer as firms would concentrate on profitable privately funded work.
Other comments received were that new models would see an increase in the number of quality firms and would lead to a better use of IT and economies of scale. One respondent commented that those that did not adapt to this change would see themselves going out of business.
A couple of respondents said that they would like more research to be done before they would feel able to comment on this question.
| Question 37 - As a supplier, would new models enable you to provide services to your clients more or less effectively and efficiently than now? Do you perceive any impact on privately funded legal services, publicly funded legal services, pro bono legal services? |
40 specific responses were received. Half the respondents thought that new models would improve efficiency and effectiveness. A quarter believed they would operate less efficiently and effectively under a new model, whilst a further quarter did not commit one way or the other, or believed that their service provision would be unaffected.
2 respondents believed that it would be a lessening of regulation in the new models that would bring efficiencies. One commented that they would be able to strengthen their business with investment and with freedom from unneeded regulation. One respondent said that they would be able to offer more services to clients and another stated that new business models would give them the ability to provide the kind of service they wanted to clients. This respondent also felt that changes might not affect public legal services any more greatly than they have been affected by the Access to Justice Act. Greater use of information technology was also cited as a means of bringing about efficiency.
Respondents who feared that new models would decrease efficiency expressed a number of concerns. One respondent stated "Where we consider our clients need specialist advice from other professionals we do not hesitate to refer them and the present breadth of advice is remarkable. The new models might have the unwanted effect of diminishing the availability of wider sources of advice and the consumer would be the loser."
Another respondent believed that there would be a negative impact if suppliers started to go out of business as a result of new models and another was concerned that if small local firms started to go out of business this would affect those with family responsibilities who had to work near home; this could be seen as discriminatory against women as more women than men would be affected. One respondent feared that small firms would lose their core work of conveyancing and probate which was often used to subsidise their publicly funded work, thereby having a negative impact on their ability to engage in publicly funded work.
| Question 38 - If there were adverse effects on old businesses, would this be offset in whole or in part by the availability of employed solicitors' services to the public? |
55 specific responses were received to this question. There was almost unanimous agreement that old businesses would be adversely affected by new models. The answers started to differ where opinions were expressed as to whether this was a good or bad thing and whether it would be off-set by the availability of employed solicitors' services.
There were far more respondents who felt that the adverse effects would not be offset by the availability of employed solicitors. Comments received included a few respondents who worried about the level of independent advice that would be available. One respondent did not believe that the public would perceive employed solicitors as independent. A concern of many was that any disadvantages would not be offset or only partially offset as employed solicitors would only be interested in practising in profitable areas. This could mean that unprofitable work would be left uncovered. One respondent said that this would leave contentious areas of law, such as family, uncovered. One respondent cautioned that efforts needed to be made to ensure the public did not suffer negative effects. 2 respondents felt that employed solicitors would not offset adverse effects as they would be a threat to the survival of high street solicitors.
The respondents that considered disadvantages would be offset put forward the following arguments. One respondent thought that the demand for lawyers would still remain but the method of practice would change. Another believed employed solicitors might offer more choice to the consumer. One respondent thought that it could be an opportunity for high street firms to reinvent themselves, "a limited liability company employing solicitors replacing the old model private practice could be the way forward for provincial firms."
The DTI saw that businesses would adapt. One respondent went further and said that businesses not prepared to adapt would fail, but that would be good for consumers. Another respondent commented, "We believe that provided there is regulation the risk is worth taking since market forces will decide who can conduct the business best in the eyes of the public who will purchase the services".
One respondent could not see a direct link between the two potential developments mentioned in the question.
| Question 39 - Would the development of new business models (a) reduce or increase numbers of firms in rural areas (b) affect the services firms in rural services offer (c) change the way in which customers in rural areas might be served? |
55 specific responses were received. The majority (40) said that there would be a reduction in rural firms. 6 said there would be an increase and the rest thought the market would stay the same or did not feel qualified to offer a view.
There was a common theme running through the comments made by the 6 who thought rural firms might increase. They all used the argument that the ability to diversify and link up with other local professionals could be the saviour of rural practices. They believed that the number of rural firms was already in decline and that new business models might make rural firms more viable and stem this reduction in firms.
The more commonly held view, that rural firms would decline, threw up a number of concerns. A fundamental worry was that new business models would put rural firms out of business and mean less choice and less access to justice for those living in the countryside. One respondent said that there was a risk of decimating service availability in rural areas and a few respondents used the analogy of the current situation with rural post offices, banks and village shops. A number of respondents mentioned the fact that the loss of rural firms would mean people living in those areas would have to travel, sometimes considerable distances, to get access to advice. Some respondents said that the internet could probably help, with services being provided on line, but concerns were raised that this would mean a reduction in face to face interaction and the personal service people often receive from their solicitors. The Countryside Agency said, "Where legal companies would wish to deliver services to rural communities via the Internet, we would expect that the infrastructure is in place to enable this to happen - benefiting both the consumers and the businesses. We are assuming that appropriate safeguards to protect privacy will be put in place to enable the exchange of information in a secure environment. There could be some understandable public resistance to using the internet for legal business and transactions, given concerns about hacking in, etc. Reassurance will be needed about this".
One respondent thought that firms would relocate to metropolitan centres and the Community Legal Service would be damaged. One suggestion was that the Government should ensure a safety net was in place to protect rural services.
Other comments stated the importance of considering the effect on rural firms and looking at the impact on surrounding rural areas.
| Question 40 - Would solicitors' professional independence and standing in England and Wales be perceived abroad as diminished, if the new style practices are brought in? Will these potential developments in new style business models affect the UK's position internationally in the provision of professional services? |
There were 59 specific responses received. There was a fairly even split between those who considered independence and standing would be damaged and those who believed it would be enhanced, with slightly more people expressing the view that it would be damaged.
One concern, voiced by a number of those worried about diminution of standing, was that MDPs had been rejected in a number of other countries. They held that this would put England and Wales out of step with Europe and the United States. The risk was greatest from countries where the opposition to MDPs was deeply entrenched. One respondent commented "that [Law] Society appears to be almost alone, not only in Europe but in the rest of the world in believing MDPs can be reconciled with the core values of the legal profession". One respondent said that the EC approach should be considered in whatever was decided.
The other big concern amongst respondents was that the perception of solicitors' professional independence in England and Wales would be damaged abroad. One respondent believed that damage would be done in the eyes of the legal profession abroad but did not necessarily know whether clients would be as worried. Another respondent said that it would be service delivery that clients would concentrate on, so it would not be so much of a worry, whilst another maintained that most foreign users of the English legal system were large commercial firms who would be able to survive the metamorphosis of the profession. The comment was made that the status of employed lawyers abroad was not as high as that of colleagues in private practice and this might affect perceptions. One respondent worried about the risk of the introduction of 'US style' law firms.
The contrary view (that standing would be enhanced) was expressed by a number of respondents. They said that the perception of the legal system would be enhanced and be seen as forward moving and modernising. One respondent thought that the innovation would be welcomed and would enhance competitiveness. It was seen by another respondent as an opportunity for the English legal system to set an example and lead the way, whilst another felt that reforms were needed to enable English firms to compete with North American firms.
The comment was made that standing would be enhanced if this country had an effective independent complaints system. A few other respondents felt that standing and independence would be safe as long as there were safeguards and professional rules were enforced. 2 respondents said that these safeguards could be maintained if regulation was provided by the Law Society.
This Chapter provoked a number of general comments in addition to responses addressed to specific questions.
The role played by big accountancy firms in developing and driving MDPs was commented upon by one respondent. Another stated that the legal market was now facing competition from accountancy firms which increasingly regard themselves as full service professional advisers to the legal community.
A number of respondents viewed the current market as dynamic and competitive, causing some to question why increased competition was needed. The Office of Fair Trading, in its response, maintained that the current situation with MDPs and employed solicitors was restrictive of competition, whilst another respondent commented that existing rules are aimed at the self preservation of the profession and are anti-competitive.
One person commented that there was little convincing empirical evidence which demonstrated demand for MDPs. Views held by respondents varied as to whether the demand existed, with some arguing that change was inevitable and customers wanted it and others that they had seen no evidence of demand for new business models.
Some general comments focused in on the perceived enormity of the regulatory task if reform was taken forward. One respondent expressed views, drawn from experience, of the difficulty in agreeing protocols across different professions. Another thought that reform of the present regulatory maze needed to take priority over the reforms proposed in the consultation paper.
Appetite for change was mixed: for some solicitors providing services through new business models was seen as an exciting opportunity; for others a concept incompatible with the core values of the profession.
Demand for new services was difficult to gauge with the majority of respondents being providers of legal services rather than users of legal services.
Regulation was seen as a concern by all, both those in favour of new business models and those who disagree with such developments of MDPs. Just over half the respondents saw the Law Society as the natural regulators for a new system. The strong message was that, regardless of who took responsibility for regulation, it must be appropriate, adequate and stringent enough to protect both the core values of the profession and the interest of consumers.
There was speculation about the effects new business models would have on the current legal market. A common view expressed was that the number of small high street legal firms, firms offering publicly funded services, and rural firms would decline. Some respondents saw this as a commercial trend, which would occur in any event, but thought new business models might accelerate this trend.
This chapter in the consultation paper sought evidence that legal professional privilege (LPP) distorted the market in legal advice; and, if it did, views on how to address the problem.
| Question 41 - Is there any evidence that accountants and tax advisers might be - or are, in practice - disadvantaged by the doctrine of legal professional privilege? |
The majority of respondents to this question considered there was no evidence that professionals other than lawyers were at a competitive or other disadvantage as a direct result of the doctrine of legal professional privilege. Those respondents who either thought a disadvantage did exist, or were not sure either way, while comprising only one third of the responses received on this area, put forward some persuasive arguments to support their views.
21 out of the 24 consultees who believed there was no evidence of disadvantage caused as a result of legal professional privilege were either legal representative bodies, firms of solicitors, or individual practitioners. A common view expressed was that the vast majority of clients were, and would continue to be, guided by matters such as reputation, expertise and price. One respondent asserted that "accountants already owe their clients a duty of confidence, as do tax advisers" as justification for their view. Another stated that "in the light of the Enron fiasco it is considered inappropriate that accountants, tax advisers and auditors should have the facility of shielding their own culpability under an umbrella of privacy". The Law Society said in its response "if any advantage exists in favour of the legal profession this is at best marginal…" The Bar Council concluded that, in reality, there is in fact very little difference between the scope of the privilege which attaches to communications with lawyers, and the scope of the privilege which attaches to non-legal professionals.
8 of the 36 respondents to this part of the paper considered there was evidence that accountants and tax advisers are disadvantaged by legal professional privilege. Half of these cited the recent House of Lords decision in R v Special Commissioner of Income Tax, ex parte Morgan Grenfell & Co. Limited in support of their arguments. The Institute of Chartered Accountants of Scotland considered that it was "fundamentally contrary to the principles of free and fair competition that some tax advisers should be able to offer their clients the protection of legal professional privilege while others cannot do so". The Institute of Chartered Accountants believed it hard to produce firm evidence of any disadvantage, but that the implementation of the Second Money Laundering Directive and Section 330 of the Proceeds of Crime Act would widen the disadvantage currently felt by accountants and tax advisers. Another respondent considered that there are three main consequences of a lack of legal privilege for tax advisers; people being reluctant to consult them, constraints on tax advisers acting as advocates, and confusion in applications for disclosure of information.
| Question 42 - If so, what is it about the provision of the Taxes Management Act 1970 that makes it inadequate to level the playing field? |
The majority of consultees who responded in any length to this question considered that the main problem with the Taxes Management Act was that the protection afforded to accountants and tax advisers in relation to privilege was insufficient when compared to legal professional privilege. Typical of comments received in this area was the Law Society's contention that "Any perceived inadequacies in the scope of legal professional privilege arise not from the legal professional privilege but with deficiencies in the Taxes Management Act". They continue, "…a simpler solution to enable accountants and qualified tax advisers to be able to advise their clients in the knowledge that their clients could claim at a later stage that tax advice was privileged, can be achieved simply by extending the scope of section 20B(9) and (10)…"
One potential extension of the statutory privilege, identified by more than one respondent, was the removal of the limitation that documents are only privileged while in the hands of the tax adviser. The same documents, if in the possession of the taxpayer receiving the advice, are not privileged, and are liable to disclosure. This is an identifiable distinction between the statutory privilege and legal professional privilege.
Other respondents saw the Taxes Management Act as even more problematic. One felt that sections 20-20D do not provide a single coherent code for the provision of documents and the protection offered by legal professional privilege. The respondent said, "Auditors and tax advisers have a limited right that entitles them to documents which are their property and which they have created for the purposes of their auditing function or for giving tax advice." Another noted that a change in Inland Revenue procedure has rendered the section 20B(2) protection less effective, and the section 20(9) audit papers protection was hindered by the operation of section 20B(11). A major international firm of accountants stated that "…the form of litigation privilege available under section 20B(2) is both obscure and more restricted than that available to lawyers…" They were also of the opinion that "…a level playing field can only be achieved by complete equivalence in the protections available to clients in respect of advice taken on tax law".
| Question 43 - If privilege were to be extended to communications with accountants and tax advisers, what additions to their training and code of ethics would be necessary? |
The majority of respondents to this question believed that there would need to be some form of addition or adaptation to the training and code of ethics of accountants and tax advisers. Only 2 of the 35 responses considered that no changes whatsoever were needed. 4 respondents believed the privilege should not be extended.
Many consultees expressed the view that the professions to whom legal professional privilege might be extended should be trained to similar levels as members of the legal profession are presently. Similarly, a considerable number of responses identified the need for a parity of ethical standards across all relevant professions. Inherent in this, in the opinion of several respondents, was that those to whom privilege is extended should have the same duty to the court as solicitors. Recommendations as to the exact type of changes that would be required were not common, but one consultee recommended "training would be needed to ensure that these practitioners [accountants and qualified tax advisers] are fully aware of the intricacies of legal professional privilege and that their codes of ethics reflect responsibilities that arise in providing privileged advice to ensure that this is not abused." Several consultees considered that along with similar standards, the penalties for breach of these standards should be the same as for the legal profession. Another suggested that training and ethical standard arrangements would need to be monitored and periodically reviewed.
9 respondents felt that accountants and tax advisers are already subject to very high professional and ethical standards, and as such there would be no need to make any substantial additions to them were legal professional privilege extended. Several representative bodies linked this to their own entry requirements. One suggested that all accountancy bodies admit members on the basis of examinations whose syllabus includes ethics. Another consultee stated that the extension of legal professional privilege should be confined to members of certain approved professional bodies, and as a result privilege and related rules could be identical between lawyers and the other 'approved professions'. The same consultee felt that further bodies could be approved dependent on them demonstrating "similar entry, continuing professional education and regulatory standards". The Chartered Institute of Taxation acknowledged that its own examination syllabus would have to be extended to cover legal professional privilege and that it would have to update its provision of educational material and professional code of conduct were the privilege extended.
| Question 44 - What Government action would you recommend, or discourage? |
Despite the open phrasing of this question, the majority of consultees preferred to respond using references to the Government's options given in paragraph 119 of the consultation paper, as set out below. Of the 46 specific responses received to this question, 1 expressed a preference for option (a) in paragraph 119, a restriction of legal professional privilege; 24 preferred option (b) against extending privilege; and 17 favoured option (c), the extension of privilege in one of two ways either by 1) reference to the profession of the person concerned or 2) reference to the nature of the communication. Perhaps not surprisingly, the majority of those in favour of maintaining the status quo were from, or associated in some way with, the legal profession, whereas those arguing for an extension of privilege came from, or represented, for the most part the other professions to which privilege could be extended.
Of the respondents who favoured affirming the public interest in preserving legal professional privilege and resisting its further extension, the majority simply recommended that the Government take no action. The reasons for this, where they were given, varied from a belief that there was no justification for change to the fact that the 'other professions' were not capable of dealing with legal professional privilege due to a lack of expertise and qualifications. One representative body emphasised that "any extension of professional privilege would involve an inroad into another vital interest: that all relevant material should be available to courts when deciding cases. Courts should not have to reach decisions in ignorance of the contents of documents or other material which, if disclosed, might well affect the outcome." Another stated "the potential risk to the ability of the Inland Revenue and Customs & Excise to successfully challenge tax avoidance schemes leading to increased tax loss from avoidance could be severely hampered if legal professional privilege was extended." A number of consultees, while preferring option (b), added that they would support the extension of legal professional privilege in certain circumstances, and dependent upon certain conditions.
Of the consultees who would prefer to see the scope of legal professional privilege extended, the majority advocated its extension to different professions, rather than to the nature of the advice given. Predictably these professions included the accountants and professional tax advisers mentioned in questions 41 and 43. Most respondents felt it important that the extension be limited to recognised professional bodies, mainly because membership of these bodies would bring with it the qualifications, professional competence and ethical obligations necessary to deal with privilege. Examples of such bodies provided by respondents included, but were not limited to, the Chartered Institute of Taxation, the Institute of Chartered Accountants in England & Wales, the Institute of Chartered Accountants in Scotland and the Chartered Association of Certified Accountants. Some of the consultees who considered an extension of legal professional privilege by reference to the nature of the advice to be expedient did admit that it would be more difficult to achieve this than the alternative. However, one submitted that "It is unlikely that a single, satisfactory list of affected professions can be drawn up and, therefore, privilege would more usefully attach to the advice given rather than simply the profession of the person giving it."
Three consultees who responded to this question suggested that the Government should consider amendments to the Taxes Management Act 1970 as part of any extension of legal professional privilege. One commented that this would provide "a clear and fair code with regard to disclosure and privilege from disclosure", while another said there was a need for express provisions in the Act's"o that taxpayers are able to make a valid claim for legal professional privilege as sufficient reason for not disclosing a document containing advice to the tax authorities". Other suggestions given included the adoption of the recommendations of the 1983 Keith Committee, and numerous calls for further, more extensive, consultation in this area before any action is taken.
| Question 45 - Are there professions (besides accountancy and tax advice) whose members might be commercially disadvantaged by the doctrine of legal professional privilege? |
28 respondents provided an explicit answer to this question. Of these, only 8 could identify professions who might be disadvantaged by the doctrine, with the remaining 20 suggesting there was no evidence that other professions were adversely affected. Many of the respondents, whichever opinion they held, identified difficulties in producing evidence to back up their contention.
Of those consultees who answered in the affirmative, 4 were bodies representative of professions who considered themselves disadvantaged. These bodies represented the interests of scrivener notaries, trade mark attorneys, chartered surveyors and patent agents. One stated "it is not the doctrine per se, but its uneven and inconsistent application to Chartered Patent Agents and Registered Trade Mark Agents that creates the disadvantage." Other professions identified as possibly being disadvantaged by legal professional privilege were independent financial advisers and architects.
| Question 46 - Is it just a theoretical possibility, or can consultees give any evidence that they are, in practice, disadvantaged by the doctrine? |
Three respondents were able to provide some form of evidence that their professions suffered some type of disadvantage as a result of the doctrine. The Society of Scrivener Notaries said "it is the experience of some scrivener notaries that the English courts are reluctant to recognise the existence of privilege in the case of communications between notaries and their clients." The Institute of Trade Mark Attorneys and the Chartered Institute of Patent Agents referred to the same problem of their members being able to advise clients on parts of a case that is covered by privilege, but having to refer the client to a legal adviser for other parts that they suspect might not be. A specific example given was that of a client seeking advice on the existence of bootleg copies of their song. In this case, trade mark and passing off issues would be covered by the agent's professional privilege, but copyright issues relating to the recording may not be, and the client may have to seek advice elsewhere. It was also mentioned in response to this question that explaining to a client that they may have to seek advice from an alternative source can lead to a questioning of advisers' legal abilities.
| Question 47 - What statutory or common law privileges do they have, and why are they inadequate? |
Three representative bodies identified either statutory or common law provisions which accord some degree of professional protection to their members. Scrivener notaries owe a common law duty of confidentiality to their clients which extends to notarial acts, communications between the notary and his client, documents deposited with the notary, and any information concerning the client and his affairs received by the notary in the course of their professional relationship. This is perceived as being inadequate, as the courts are "reluctant to recognise the existence of privilege in the case of communications between notaries and their clients."
Provisions relating to privilege for registered patent agents are found in section 280 of the Copyright, Design and Patents Act 1988 and for trade mark agents, in section 87 of the Trade Marks Act 1994. These offer limited privilege, in that only advice within specified categories is privileged. This, it is submitted, places trade mark attorneys at a commercial disadvantage compared to professions with broader rights, such as solicitors. For example, although patent agents deal broadly in intellectual property, the definition of what legal privilege extends to in section 280 does not encompass all work of this type as, for example, section 72(5) of the Supreme Court Act 1981 does. Rights of audience in the Patents County Court were felt to be the source of more inequality. Although patent agents may conduct litigation before them, as they do not fall within the definition of "authorised litigators" or "authorised advocates" in the Courts and Legal Services Act 1990, they have a lesser degree of privilege than professions who do fall within this definition.
| Question 48 - If privilege is to be extended to communications with members of these professions, what additions to their training and code of ethics would be necessary? |
Of the 23 consultees who responded to this question, 10 recommended that the training and code of ethics applied to members of other professions should be the same as, or similar to, those that solicitors are currently subject to. A further five respondents acknowledged that professions to whom legal professional privilege might be extended would need to undergo further training, and be subject to further obligations before the doctrine could apply. Specific suggestions and recommendations included training in the reasons for, and limitations of privilege, encapsulation of the doctrine in the codes of practice of professional bodies, a system of enforcement being put in place to prevent abuse, and that the 'other professions' be subject to the same duty to the court as solicitors.
Three respondents maintained that the professions to whom the doctrine might be extended already had satisfactory training and codes of ethics. One cited qualification rules made pursuant to the Courts and Legal Services Act 1990 as evidence that the standards of entry and the rules of conduct which apply to their profession are at least as tough as those that apply to other legal professions. Another representative body considered that any additions or changes to an already satisfactory system of training and ethics were unnecessary.
| Question 49 - If privilege is to be extended by reference to the nature of the advice given, rather than the nature of the adviser, how would you define extent of the privilege and the classes of the advice to be covered? |
Respondents to this question generally had difficulty in defining the possible extent of the privilege and the classes of the advice to be covered by it. Of the 27 who responded, 9 considered it either difficult or impossible to define these categories with sufficient certainty. A number raised the fact that there may be difficulties in monitoring and policing the exercise of any extension of privilege. One considered that such a change would be "a prescription for legislative disaster".
Amongst the consultees who did attempt definition, there were a wide range of views. Categories of advice to which it was felt privilege should attach ranged from all notarial records to all intellectual property matters, including those between an agent and a third party for the purposes of litigation, and similarly to all tax avoidance matters. One respondent defined the nature of advice that should be subject to privilege as "any advice that directly or indirectly affects that client's rights and freedoms as guaranteed by the law or which, if given by a client to his solicitor, would be deemed to be privileged." Another preferred "the seeking or giving of professional advice from or by a member of a profession as to rights or obligations in law in relation to the client's own affairs or those with which the client has a direct and relevant connection." Other views expressed included that any extension of the rules should only be as far as those which currently apply to lawyers, that extension should be confined to the nature of the adviser rather than the advice, and that privilege should not be extended at all.
| Question 50 - What Government action would you recommend, or discourage? |
Of the 30 consultees who responded to this question, 11 felt that the Government should take no action. Apart from this, there were very few commonly held views or trends. Only four respondents recommended specific courses of action which would extend the scope of privilege, although several others made suggestions as to safeguards that should be put in place in the event of any change. The desired changes included legislative intervention to resolve uncertainties over the application of the current rule to certain professions; the extension of legal professional privilege to all classes of professionally qualified legal adviser without restriction; and privilege extending to all communications with clients and third parties for the purpose of giving or getting legal advice in regard to existing or contemplated legislation, or collecting evidence for use in such legislation. Among the recommended safeguards were proposals that comprehensive training be given; allowing courts to interfere in the working practices of other advisers, and not allowing action that would undermine present standards. Three respondents proposed that before any changes are made, there should be further, more extensive, consultation.
76 responses were received in reply to chapter 5 of the consultation paper.
| Question 51 - If you are a user (a client instructing a solicitor or exercising direct access; a solicitor; or a foreign lawyer), how is the mark of QC useful to you? |
(Number of respondents: 43)
The Bar Council agreed with the Government's position as stated in the consultation paper, which set out the reasons for retaining the rank of QC2. The Bar Council also referred to the advantages of QCs mentioned in the Kalisher Report3 adding that QC status "signifies that the holder is at the top of the profession as a practising advocate". The Judiciary4 considered the QC system "not simply as a quality mark in the market, but as an important part of the machinery of Justice…The QC system also plays a useful part in identifying future candidates (for the bench)". They also attached "importance to the identification of a body of advocates who are the leaders in their profession, not only as being excellent lawyers and advocates but, above all, as having complete integrity". One respondent referred to the advantage of the QC mark as denoting "a member of the Bar who is… able to be ruggedly independent to an even greater degree than a member of the junior Bar"
There were respondents who considered the system useful in particular situations, such as being an "important matter of reassurance if they were to end up instructing an advocate they had never employed before". Meanwhile, some considered QCs useful in areas which "individual practitioners may be less familiar". Some respondents referred to the advantage of instructing a QC as a tactical measure to indicate how seriously the matter is being treated and to match the representation of the opponent.
Some respondents expressed the view that the QC system was not useful but either did not give a reason or said that it was not necessary since competence, reputation or previous experience are the deciding factors when instructing a lawyer in a complicated case and there are better ways of assessing them than relying on QC status. Other reasons include: "frequently a hard working junior is more experienced and offers better value than a QC", and that "a QC kitemark is not relevant at all to an instructing solicitor, other than to budget for having a silk and a junior in some cases. What is relevant is the length of call (and experience)".
Three respondents submitted an identical response. These were the Association of Women Barristers (AWB), the Haldane Society of Socialist Lawyers and the Women's Interest Group of the Society of Labour Lawyers (SLL). They agreed that "there is a public interest in a quality mark (QM) which may enable the most competent practitioners in a field to be identified. The Bar is a professional referral profession and may be distinguished from Solicitors who are instructed directly by the public. A QM may assist the public and solicitors to identify the leaders in a specialism provided the QM is objectively deserved, monitored and awarded on merit only in accordance with key professional criteria in a transparent, fair manner which is non-discriminatory". However the same respondents expressed concerns as to the current method of appointment. They said that a Quality Mark (QM) "may assist the public and solicitors to identify the leaders in a specialism provided the QM is objectively deserved…The perception that the current method of appointment is unfair and discriminates against women candidates has been reinforced by research and the experiences of AWB members". One firm of solicitors noted, "in recent years… there has been far more information about barristers, their experience and qualifications, available from sources such as websites, legal directories and the like".
The DTI believed that "quality marks can provide useful information for consumers which can help them ascertain a minimum level of service and distinguish between providers, and can therefore bolster competition. The QC system clearly has the potential to produce these effects. However, to provide true value to consumers quality marks must be capable of being removed if the holder no longer reaches the required standard".
One local law society said "Most of our members have at one time or another consulted a QC, sometimes on the advice of junior counsel, or on instruction from clients, but their reasons are often different. Juniors tend to recommend a QC when the matter is so serious or difficult that the extra experience or ability is required. Clients appear to enjoy the cachet of being so represented. In that sense, therefore, 'QC' is a marketing tool and we do have instances in which a QC has been instructed when the use of an appropriate junior would have served just as well". One Bar association considered "the system has the support of the market".
The Young Solicitor Group considered that "it will be very difficult to call for abolition of the QC system, given the fact that other professions have their own methods for signalling excellence which are not always guarantees for the public, e.g. merit awards for doctors". The Association of Personal Injury Lawyers (APIL) said "It is imperative that the victims of personal injury are advised and represented by barristers who have experience of, and expertise in, the field of personal injury law. As a general quality mark, the title of QC, as such, is not useful to a personal injury solicitor in identifying a specialist personal injury barrister".
A local law society said "the QC system should be abolished. We take the view that the system does not provide any useful quality mark to guide solicitors practising in the City". A set of chambers said that "the risk of being misled into instructing someone who is a QC but not a specialist in the relevant area is high. We consider that, unless QCs are awarded for particular specialisms, the claim about redressing information deficits in the marketplace is at best exaggerated, and at worst wrong".
| Question 52 - Do you think the criteria for QC are clear, relevant and useful? If not, in what way would you like to see them altered? |
(Number of respondents: 51)
The Judiciary agreed completely with the criteria, their relevance and usefulness, as did a couple of other respondents. The Bar Council agreed with the criteria but suggested that there should be added, "as a most important criterion, fearless independence". A firm of solicitors referred to the need for financial acumen in a QC, while a set of chambers considered the criteria took "too narrow a view of the role of a modern provider of legal service", and suggested adding: skills in client care; commitment to public interest litigation; commitment to public service as a lawyer; and contributions towards the development of the law. One local law society responded that the criteria "are not clear, relevant and useful". It also expressed reservations on the relationship between Silk and advocacy and questioned whether there is any objective testing of the criteria in an open and transparent way. A local law society group said that the criteria are not clear but saw "no reason for altering them either". The Law Society considered the criteria as a "very useful starting point for the sort of specialised accreditation scheme the Society would favour to replace the present QC scheme".
Some amendments to the criteria were suggested, particularly that of a reduced emphasis on advocacy. The AWB, the Haldane Society of Socialist Lawyers and the Women's Interest Group of the SLL believed that the criteria were clear, relevant and useful but objected to the focus on advocacy because it "may prejudice very successful otherwise qualified candidates for whom advocacy is a small or non-existent part of their practice e.g. employed barristers and solicitors. Further it may prejudice very skilled and professional litigators who rarely appear in court because they help their clients reach proper settlements, thus adhering to the Woolf aspiration to avoid costly dispute resolution in court if at all possible". Other respondents suggested the system needed to be completely overhauled; preferring an accreditation system that takes into consideration areas other than advocacy.
Several respondents used their answer to this question to express their views about the need for re-accreditation. One lawyers' group believed that QC status might be misleading due to the fact that it is awarded on a permanent basis without any ongoing accreditation to make sure that skills and qualities are maintained. The DTI said that the criteria "form a good basis for determining whether QC status is appropriate but quality marks must be capable of being withdrawn if the criteria are no longer fulfilled". The Treasury also said that it was content with the criteria but stressed the need to lose the status if these are no longer met.
Further concerns were raised about the operation of the system: one local law society agreed that the criteria seemed clear relevant and useful but questioned their "subjective" application. One solicitor believed that LCD should not endorse the system and suggested that the Bar should in the future decide on the award of what was described as the title of "Senior Counsel". This respondent described the current QC system as "archaic", as well as being "disconcerting and misleading". One respondent objected to the appointment of solicitors as QCs, stating that the criteria are perfectly clear, relevant and useful but added that "such appointment should be discontinued" due to the difference in experience between the Bar and solicitors working in the field which may mislead the public. This respondent asked for the introduction of a "Queen's Solicitor".
The Bar South Eastern Circuit said, "a particular problem concerns civil practitioners who apply to become QCs and satisfy or may well satisfy the criteria for appointment but have practices that involve relatively rare appearances in court. We understand that, despite their suitability for appointment, such applicants have great difficulty in being appointed because their advocacy is not seen by a sufficient number of judges. We recognise that a very considerable improvement has been made in the application form for 2003 as there is now recognition that advocacy includes written advocacy. However, in our view, there is room for further improvement". The Institute of Legal Executives (ILEX) said, "It ought to be possible to establish and publish objective criteria against which appointments are to be made, and to consider linking those to re-appraisal processes, in order to dispel any concerns that appointments are not made on merit".
| Question 53 - Do you think the appointment system could be made more fair and transparent? |
(Number of respondents: 47)
The AWB said, "the perception that the current method of appointment is unfair and discriminates against women candidates has been reinforced by research and the experiences of AWB members. Only 8% of QCs are women". They also stated that if the QC system is to be retained, "an independent body should be responsible for appointments". The latter point was also reiterated by The Law Society on the basis that the profession sometimes challenges the Government on behalf of clients who then "have to look to Government for preferment that confers a market advantage". The Law Society agreed with the findings of the Commission for Judicial Appointments' first report5 which mentions "grave concerns about the objectivity of some aspects of the current consultation process and the quality of information obtained from it". The Society also said, "there has in recent years been increasing concern as to the methods by which those who are appointed QC are selected. This has developed alongside similar concerns about the appropriateness of the selection methods for members of the judiciary". One respondent added that unsuccessful applicants should be entitled to know the reasons for their rejection without disclosing the source in order for those applicants to work on their shortcomings. One firm of solicitors said that the appointment system is flawed and that examinations, independent assessments and interviews should be introduced but "distanced from the government". Some respondents said that such appointments should be made by the relevant professional body.
Although a set of chambers said the "act of transparency [publishing the list of consultees] may distort the behaviour of aspirant Silks", many respondents felt the system could be made more transparent. The Bar Council recommended "that the LCD publish a clear description not only of the consultation process but also of the internal decision-making process". One law society group suggested publishing a list of applicants after the event. It said that this "would enable practitioners who instruct Counsel to know the opinion of those consulted on the abilities of unsuccessful applicants". However a firm of solicitors disagreed with the suggestion considering that such a move would unfairly mark unsuccessful barristers as failures. The same firm commented on the negative public perception of the appointments due to its secrecy which "perpetuates the myth of an old boy network". The DTI noted the concerns raised by the Commission's report regarding fairness and transparency. It added that the issue should be approached from a consumer perspective, as they are the ultimate payers of QC fees, saying that if consumers do not understand the appointment system "this may raise questions in their minds about the quality of service and value for money they receive". On the issue of fairness and diversity, the Bar Council said that the "remedy is to seek to ensure that the persons consulted about a particular applicant are as representative as possible of those who will know him or her best, not being exclusively white or male". The Criminal Bar Association said that there is no fairer alternative to the current system as "it is difficult to envisage a system that could provide a more accurate decision on the appropriate candidate to receive the appointment". The Association also rejected suggestions of examinations as difficult to formulate and inferior to the current system. A firm of solicitors suggested that the system might be made fairer if representatives of smaller firms that use QCs are consulted and believed that there is a perception of a quota system in terms of numbers and specialist areas of QCs.
The Bar South Eastern Circuit believe "that the award of that rank will remain central, both as a mark of achievement and as a step towards an enhanced level of practice. Given that belief, it becomes more important than ever that the system for appointments is fair, even-handed and transparent. The establishment of the Commission for Judicial Appointments was a considerable advance and we commend it highly. It was to be expected that allowing outside inspection of the system would highlight some shortcomings, but the recent report is nonetheless, as we fully recognise, troubling6. The requirement for consultees to specify the factual basis of their observations on candidates with care does not appear to have been met in all the three cases that the Commission examined in detail. Similarly, the lack of a sufficiently thorough audit trail following the sifting of the applications has been identified".
| Question 54 - Do you think the right people are consulted during the QC appointment process? If not, how would you like to see it altered? |
(Number of respondents 46)
The Bar Council described the use of the term "secret soundings" as "inaccurate and pejorative" because applicants can know the comments made about them if they want to without knowing the names and/or identities of those who made the comment. They considered "the preservation of this confidentiality absolutely necessary if the comments made are to be frank." Although the Bar generally supported the current consultation process, it said, "the present system of consulting the long list of automatic consultees about all the applicants is one that should not continue." The Judiciary in its response said, "we are not aware of any significant exclusions" adding "the system of consultation has been transformed…to one which is impressive in its scale and comprehensiveness".
A local law society said that it "would like to see wider consultation with the solicitors' profession and the Law Society to re-engage with the process". A solicitor expressed similar views regarding the excellent ability of judges to provide opinions on advocacy skills but added "solicitors are better placed to comment on QC's relationship with the lay client and in many cases the solicitor is the consumer". The Law Society reiterated its policy "that the designation of QC in its present form should cease. If the designation is to be preserved, we believe that the appointment process needs to be objective, transparent and fair to all candidates. We have concerns that a system of using automatic consultees who may not know all the applicants is indirectly discriminatory. Greater weight should be given to the views of solicitors who have instructed applicants on behalf of clients".
Several respondents commented on the nature of the consultation process saying there should be a more transparent assessment procedure to eliminate the likelihood of discrimination. A firm of solicitors said there "should be a reference system rather than behind the scenes consultation". Another firm of solicitors said that the assessment of candidates should be made by a selection panel using properly structured assessment techniques because "third parties are not reliable and open to abuse".
One local law society "does not consider that an extensive process of consultation is appropriate any longer. Instead application should be made to an appointing committee or board which would then have the power to take appropriate references. Such references should be in writing and available to the applicant". However, another thought "a wider consultation is appropriate", suggesting that "a system of random sampling of all solicitors who have instructed the candidate within the last two years could be instituted as a method of assessing the individual's practice". The DTI said that consumers who pay QC fees should be able to feed in their views, but expressed its understanding of the difficulty in establishing a mechanism that would allow consumers to get their views across. One solicitor said "the system of having leading counsel officially endorsed by the LCD is wrong in principle and should be scrapped. Existing Silks should retain their status but for the future the General Council of the Bar should decide on and award the title "SC" (Senior Counsel) to those whom they deem to qualify for it. It should confer no extra privileges or rights, and simply be a token of esteem".
A firm of solicitors questioned whether the involvement of Government in the process is appropriate suggesting that the legal profession should be able to award the QC status. It recommended setting up an independent body with representatives from the Bar and other parts of the profession. A solicitors' association considered that "any perception of inappropriate influence might be removed by having decision making moved to an appointment committee comprising representatives of the judiciary, the bar and the solicitors' profession".
| Question 55 - If you do not think an extensive process of consultation is the right way of making the assessment against the criteria outlined, how would you like to see it altered? |
(Number of respondents: 38)
One respondent believed that "no professional examination could provide such a fair, accurate, thorough and relevant test for the appointment of Queen's Counsel". The Judiciary also proposed no alterations. The Bar Council, however, said "there should be chosen from the long list of automatic consultees only a limited group of those who will be able to speak about the particular applicant, having knowledge… of his/her work in the past three years". The DTI said that extensive consultation should be an important part of assessment but other methods such as interviews should be considered to supplement it.
The AWB, the Haldane Society of Socialist Lawyers and the Women's Interest group of SLL acknowledged that the Lord Chancellor's Department had been "active in introducing valuable advances e.g. consultation with the Joint Working Party on Judicial Appointments and Silk, Research, the Judicial Appointments Commission, etc." However, they considered the judiciary less able to comment on the non-advocacy and client care aspects of applicants' work. They also commented that the "gender composition of the senior judiciary is perceived likely to discriminate positively in favour of white, male barristers in chambers from which those Judges (ex QCs) practised". The respondents called for an "evidence based" marking system suggesting a unified standard for marking applications which is "understood, applied and monitored". They described the current sift and short-listing of the recommended candidates as "flawed and discriminatory". The respondents believed that the current size of the profession demanded change saying, "the scope for mis-identity has increased as the profession has grown". They referred to the advantages of certain systems of judicial appointments applied in countries like Canada as "fair and non-discriminatory" although they did not give details of the process used in those systems. Moreover, they suggested that the Law Society and the Bar Council should "implement and monitor their own Quality Mark e.g. Senior Counsel (SC)".
Proposed methods of assessment varied: one local law society suggested a "league table of Counsel in each category or class of legal business…those in the first division could become QCs". A couple of firms of solicitors preferred examinations, one with independent assessment, and another with examinations to be followed by interviews by an independent panel and taking up of references with the whole process "not done by or in the name of the Lord Chancellor". A third firm of solicitors suggested an assessment system based on national advertisement, written application, paper sift and interview with case study exercise.
| Question 56 - Should individuals be able to lose their QC status if their standards decline? Would a re-appraisal process enhance the value of the system to customers? How might any re-appraisal process be carried out? |
(Number of respondents: 50)
The Law Society said that "if an accreditation system were introduced, we would envisage a re-accreditation process, say every five years, subject also to appropriate intervening procedures to deal with misconduct or sudden incapacity". They also said they had a "strong commitment to encouraging quality in the profession [and] would welcome an accreditation scheme for experienced advocates who wish to demonstrate a superior level of expertise and quality. Ideally, accreditation would be achieved by candidates being able to demonstrate by objective methods that they had achieved the required level of work experience and specialised knowledge". One local law society said, "the same independent body [that carries out the appointments] should carry out the re-appraisal process". The Treasury referred to its answer to question 52, which agrees with the principle of losing status if the selection criteria are no longer met. A firm of solicitors said "possibly, such a re-appraisal could be made by the LCD, the Bar Council and the Council of the Law Society". The DTI supported the idea that a QC status should be removed if performance declines, otherwise the status could deliver the wrong message about the competence of the holder. Thus, "a system of reappraisal would help assure consumers that the QC status was meaningful". The Bar South Eastern Circuit took the view that a re-appraisal system "might enhance the value of the system" but added, "we are very firmly of the view that an increased obligation to undertake continuing professional training is a more desirable way of guarding against any falling in standards". They also said, "we understand the motivation behind the suggestion that the rank of QC should be liable to removal. On balance, however, we are against such a scheme that would, in effect, have to create a whole new appraisal system that would become the mirror image of the appointment mechanism". A set of chambers agreed that the QC badge should be lost and won claiming that "stories abound of silks who were ill-prepared, or out of touch with recent legal developments, or otherwise riding on their reputation as "silk"". On the other hand, a law society group saw no need to have a "burdensome periodic review but there should be scope for review following a complaint which could result in a loss of QC status".
The Judiciary did not think that a re-appraisal system was practical or necessary due to the variety of fields and ways in which QCs work. They said "we cannot imagine a fair and workable system for continual monitoring of their performance. Furthermore, any procedure for removal of the mark would involve some form of right of appeal or objection, which would be complex and contentious". They stated that "ordinary market forces, supported by the disciplines and pressures of the profession, are generally effective to ensure that QCs do not continue to practice in areas or cases for which they are no longer suited". The Criminal Bar Association said, "Any suggestion that there is no continuous quality mark for the QC system fails to understand that barristers are already under continuous review by their professional and lay clients. The existing complaints system is transparent and available to any dissatisfied client. QCs are also subject to the disciplinary sanctions of the Bar Council which has power to suspend or disbar in appropriate circumstances". The Bar Council also opposed any "system of routine re-appraisal of an individual's appointment to Silk" saying also that it will be difficult to tailor such a system to each individual to ensure fairness without making it "over-cumbersome". It also questioned the effectiveness of such a system especially when professional disciplinary procedures already exist. A solicitor said, "re-assessment is not part of any other professional appointment system and save for bad behaviour would seem unnecessary and counter productive". One respondent was among those who said that if QCs' standards of performance diminish, they would not be instructed so there is no need for a re-appraisal system. One local law society did not agree that the removal of the QC status or the principle of re-appraisal would enhance the system. It said, "the market can be relied [on] to regulate quality". One firm of solicitors raised the benefit of instructing a QC as "they are able to take a more dispassionate quasi-judicial approach" which might be jeopardised if QC's felt their status to be at risk because it could be removed. The other aspect mentioned was that if such loss of status could lead to a loss of livelihood.
One Bar association saw a re-appraisal process as wholly disproportionate, saying also that "The market is sufficiently sophisticated to know who, for whatever reason, is not successful in Silk and who has retired." Another respondent said that "QMs are required for solicitors practising in many areas of publicly funded work; that over 50 Barristers' Chambers have subscribed to the voluntary kite mark, 'Bar Mark'; that the Bar Mark is monitored robustly; and that it may be lost if there is evidence of discrimination by a chambers".
A local law society said, "practices in smaller firms outside the City may have a need for a proper accreditation system which marks out those with particular expertise, whether that expertise be in advocacy or advising in specialist areas of law. Such a system should not be run by the Government or one of its ministers, but by the relevant professional body". The Young Solicitor Group did not agree that "only barristers should be subject to accreditation requirements" and "favour an accreditation system for all lawyers, as is currently being introduced for doctors." The APIL said that "a system of accreditation for barristers in specialised areas would be much more useful to solicitors… and the accreditation should be capable of being removed if appropriate. The fact that the QC mark is retained regardless of performance is, in our view, a major fault with the current system."
| Question 57 - If you are a direct purchaser (i.e. Solicitor/direct access client) of barristers' services, have you had experience of using a junior or non-QC solicitor-advocate who then became a QC? If so, did you experience a "step-change" in fees on their appointment as QC? |
(Number of respondents: 38)
Few respondents commented specifically on whether or not there was a "step-change". One local law society and one firm of solicitors had not experienced a step-change in fees charged after those they instructed took appointment to Silk. According to one respondent, the increase in fees is gradual until newly appointed Silks prove themselves. A law society group also agreed and added that "in the end market forces apply". A firm of solicitors said that according to the mixed experiences of its members "some litigators had experienced a step change in fees on appointment as QC even when this occurred three months before trial making it impossible to obtain another barrister." A solicitor said "Yes…but this is negotiable and to an extent understandable".
One local law society said "As for fees, we have all found that the taking of Silk is an immediate opportunity for a substantial hike in fees, and often, a reduction in the availability of that particular barrister even for work in which they continue to practice. The fees charged often reflect the award of Silk more than any uplift in ability or experience". The Legal Action Group is "concerned that pressures are placed on the cash limited legal aid budget by the inflated level of fees that QCs expect to receive. In some circumstances, the Legal Services Commission will moderate the fees of senior counsel. However, this can lead to QCs showing reluctance to appear in a legally aided case. It is clearly not in the best interests of the legally aided client for the services of senior counsel to be priced so high that this level of expertise is not available to prosecute or defend the case".
| Question 58 - If you are a QC, did you increase your fees on becoming a QC? |
(Number of respondents: 9)
The Criminal Bar Association acknowledged that "fees do generally increase upon appointment as a QC". The Association defended the increase on the basis that cases taken by QCs are more serious and complex.
| Question 59: Do you think that QCs can command higher fees in addition to that which is explained by their superior skills alone? If so, please offer evidence. |
The Bar Council said that prices were a matter for the market to accept or reject i.e. QCs could only raise their fees if market forces allowed. The Criminal Bar Association referred to the superior skills of QCs and the complex and serious cases they took as a reason for higher fees. One respondent replied that "any barrister, junior or silk, who is exceptionally popular because of his ability will inevitably be able potentially to attract higher fees from privately paying clients" but added that many of these also do legal aid work for which they are paid the same as any other barrister.
However, a local Law Society group and a firm of solicitors simply answered the question in the negative. A solicitor also said "No" but explained that he negotiated the fees. The Legal Action Group objected to the increase in QC fees after appointment but noted that some newly appointed QCs would continue working on a case they started before the award without increasing their fees. The Group said that the increase in fees increased the burden on the LSC and suggested a fee structure based on merit only. The Law Society Local Government Group said "fees are obviously an issue for discussion prior to issuing instructions".
Some respondents clearly referred to a premium element in the uplift in fees after appointment. A set of chambers said "in our view it is certainly the case that QCs can command higher fees independently of merit because…the perception of a need to instruct a QC, places them at an unjustified market premium". A local law society said that status "has, in itself, the ability to command higher fees". The Society used higher fees given to QCs in the graduated fee scheme in publicly funded work, as evidence for the argument. A firm of solicitors said that the ability to increase fees was one of the motivations to become a QC. The Law Society said "Reports from solicitors suggest a step change that is not always justified by the superior skills claimed". A local law society mentioned that sometimes "retainers" were paid to top QCs to keep them available when needed in a case and to prevent the opponent from instructing them.
| Question 60: If you are a solicitor, have you ever instructed a QC even though a particular junior or solicitor-advocate could have undertaken the case competently? If so, why? |
(Number of respondents: 35)
A firm of solicitors said that if it were considering appointing a junior counsel or a solicitor-advocate on a case "we would advise the client as to the possible downside of not appointing a QC, for example, that the Judge may pay more attention to the QC's argument. In the light of that advice many clients choose to instruct a QC. In heavy cases many clients feel they must have a big gun, who will inevitably be a QC". A set of chambers raised the issue of influence on judges as well saying "there is no doubt that judges listen more attentively to QCs… judges generally are more indulgent of poorly prepared arguments by QCs; all of which leads clients/solicitors to want a QC when the case does not necessarily demand it". A local law society said that for cases which, in order to succeed at trial, involve a departure from the existing law or a novel argument succeeding, one view held amongst some solicitors is that the right QC may have the clout to swing a favourable decision when the outcome looks doubtful. The Law Society said that solicitors report that clients "are sometimes anxious to have apparent equality of arms, and so wish to instruct a QC if their opponent does so".
In contrast, the Law Society Commerce and Industry Group replied that instructing a QC even though a particular junior or solicitor-advocate could have undertaken the case competently was "not a common experience amongst members". One respondent said "this happens but infrequently".
One local law society said that members certainly paid more for a QC albeit that QCs were chosen because of their expertise, personal relationship and accessibility; price was a factor, with clients often willing to pay for a QC who came highly recommended.
| Question 61: If you are a client, have you ever instructed your solicitor to instruct a QC for a particular case, even where your solicitor advised you that a particular junior or solicitor-advocate could undertake the case competently? If so, why? |
(Number of respondents: 9)
A bank said that it had insisted on a QC being instructed because "the perception was, amongst senior management, that an opinion from a QC has a higher standing". The Law Society Local Government Group said that its members found the QC system useful "when they need to impress upon a non-legal audience…the importance of a particular matter and the legal implications". A local law society said that they would "ask for a QC when that man or woman is the best at the job".
| Question 62: Do you feel there is a competitive advantage to QCs from their distinctive position in the courtroom i.e. on the Front Row (with juniors behind)? |
(Number of respondents: 46)
The Criminal Bar Association said that according to its experience, with the exception of the Court of Appeal "there is far less formal demarcation between QCs and juniors in the Crown Court. The common practice now is for juniors to sit side by side with their leading QC". The Association argued that since many cases have QCs on both sides, it was difficult to see how any one could gain a competitive advantage over his/her opponent from his/her position. The Bar South Eastern Circuit stated that they had "some experience of more old-fashioned judges who have seemed to view QCs and juniors very differently at the outset of proceedings. This inevitably evaporates as any hearing progresses and the advocates are judged on their performance". One local law society did not consider the position of a QC in a courtroom to be advantageous and "in cases which may not warrant a QC their position can be a positive disadvantage". The Judiciary also said that there is no advantage "from the viewpoint of the judges" adding that the traditional positioning of barristers "is often departed from, depending on the nature of the case, the number of parties, and the form of accommodation available in the court". The Bar Council said that it "did not believe that the practice exerts any appreciable impact upon competition".
In contrast, the AWB, the Haldane Society of Socialist Lawyers and the Women's Interest Group of SLL said that there was "no doubt that QCs are treated especially favourably by most Judges but NOT ALL. Juniors and Solicitors sitting in the rows behind or in front are treated or may feel that they are being treated as second class lawyers". The Law Society said that advocates report "a perception that some members of the judiciary appear to attach greater weight to arguments advanced by QCs even when the merits of their argument might not justify this". The Society called for "all advocates to have the same status in terms of position and dress, and should receive the same degree of attention and respect from all other persons in the court". The Treasury said "it appears to be the case that there is a competitive advantage to QCs from their distinctive position in the courtroom". A local law society said "we do think the front bench system is unfair and we have seen examples of this. We have also heard of examples of solicitor advocates who feel that they have not had as receptive a hearing as Barristers/QCs".
| Question 63: If you are a user (a client instructing a solicitor or exercising direct access; a solicitor; or a foreign lawyer), have you ever been influenced by factors other than quality (e.g. the Front Row, whether or not the other side instructs a QC)? |
(Number of respondents: 34)
A local law society said clients feel disadvantaged if the other side instructed a QC and they did not. It added that if the outcome of the case was not as they hoped, it felt that it was because they were not well represented. A firm of solicitors said it "sometimes feel obliged to advise our clients that if the other side is instructing a QC they may be disadvantaged if they do not do so". One respondent said "large purchasers of services, such as insurance companies, can often increase the financial and emotional pressure on the other side by appointing a QC at an early stage in the proceedings". A local law society said "whether or not the other side instructs a Silk, particularly in Chancery matters there seems to be an advantage in dealing with the judge, because judges tend to be more familiar and at ease with them". The Law Society Local Government Group said "the main influences are experience of working with the individual concerned and recommendations from colleagues". One local law society said "there is a perception that if one party employs a QC the other is obliged to match the appointment".
| Question 64: Do you think that de facto demarcations exist in areas of work for QCs? If so, what effect do such demarcations have on the market? Are such demarcations a reflection of the accuracy of the QC system in marking out the advocates best able to deal with complex matters? |
(Number of respondents: 37)
The Bar Council said "there are no areas of work reserved to QCs. The market determines who does what…The appointment to Silk is recognition of the quality of the barrister and helps the market decide whom to instruct. It does not however confer upon the individual Silk any de facto preferential access to work". The London Common Law and Commercial Bar Association said "we do not consider that the market is so unsophisticated as to employ a Silk for the sake of it where the Silk in question is known not to be as good as another junior barrister". The Bar South Eastern Circuit said "for a long time there have been traditional areas of work that have been dominated by QCs…It is important to note, however, that there are frequent exceptions to the use of QCs…it is not unusual to find senior junior Counsel being instructed. This…demonstrates that the Bar is a very free and competitive market".
One local law society said "de facto demarcations exist in representation in various courts. We do not consider that such demarcations are a reflection of the accuracy of the QC system in marking out advocates best able to deal with complex matters". The Treasury said "it appears that de facto demarcations exist in areas of work for QCs though this may be for no rational reason. Such demarcations will reduce competition in the market in turn impacting negatively on consumers". A firm of solicitors said "the number and extent of de facto demarcations are fewer than in the past…QCs are increasingly willing to become involved in all parts of the process of preparation for court as well as for the advocacy in court itself. While it is still traditional for QCs to expect to have at least one junior barrister instructed in matters with which they become involved, instructing solicitors can and do from time-to-time instruct QCs without a junior as required by the circumstances". The Association of Women Solicitors said "the complexity of the work and the area of specialist knowledge required should determine the process of selecting who does the work and at what price. In practice, these 'difficult' matters are always reserved for or allocated to QCs". A local law society said "Counsel in Chambers should be able to demonstrate their experience and skill without necessarily becoming a QC. Perhaps the Bar should consider dropping the term "junior" for any counsel, however experienced, who is not a QC".
| Question 65: If you think that the mark of QC causes anti-competitive distortions in the market, what and how great are they (please give evidence of their existence)? How might they be addressed? |
(Number of respondents: 36)
One respondent found the term "anti-competitive" not applicable to "a learned profession" from an economic or commercial point of view, and said the "attainment of the mark of distinction as a QC is not anti-competitive" since every member of the Bar can compete for it. The Law Society Local Government Group did "not consider that the QC mark causes any such distortions".
A firm of solicitors said "the consequence of a QC status can and does produce distortions in the fees charged for work carried out for QC's and junior barristers…a greater transparency of the fee setting mechanisms and rates genuinely linked to the difficulty or complexity of the matter would be desirable". Another firm of solicitors suggested that "judges should be formally instructed by LCD to give no weight or bias to any party's case on the basis that one side is represented by a QC and the other by junior counsel or a solicitor advocate".
One local law society considered the system to cause anti-competitive distortions for inexperienced lay clients, but not informed buyers such as solicitors. The DTI said "the QC mark probably does cause distortions, especially if it leads to clients approaching QCs when alternative counsel could be equally or more effective". The Treasury stated that "there are significant competition distortions. To an extent these will always exist if the QC mark persists, as individual solicitors may employ QCs to avoid any criticism of their decisions after the event. However, if this quality mark is capable of being lost and therefore more meaningful this would be less of a problem than it is currently". The Law Society said "any vestiges of a quota for the number of QCs, together with the excessive deference sometimes given to arguments advanced by a QC, is inherently likely to cause some anti-competitive distortions".
One of the local law societies "considered that any anti-competitive distortions, which do exist, are not in practice of great significance. However, having a system in place which could potentially cause anti-competitive behaviour gives the wrong impression to the public and will leave the legal profession continually open to harmful criticism such as that contained in the OFT report. It is therefore important, if only cosmetically, to reconsider the system for awarding Silk by making it less subjective and more transparent".
The Bar South Eastern Circuit said "Our practical experience leads us to make two points. First, any profession will have a tendency whereby those who are more experienced and more highly regarded will be able to command higher fees in the private market. Provided that appointments to the rank of QC are made fairly and rationally, there is no basis to object to a lawyer's seniority and expertise being publicly noted by such a system. The second point is to note that the very question about the distortion of the market ignores what is the financial reality for the majority of barristers; those who are employed by way of publicly funded work will simply not fall within the market based terms that the OFT deploys. A QC will only be employed under public funding if the case merits it and the fee paid will often be founded on a calculation whose starting point is whether the lawyer involved is or is not a QC. The whole system of publicly funded work depends upon some indicator as to the complication and seriousness of the proceedings and the rank of the Counsel involved".
The London Common Law and Commercial Bar Association considered that "the QC system does sometimes distort the market but not in the way suggested in the Consultation Paper. We do not think that, in general, people's practices are enhanced by being appointed a QC over and above their natural ability. If a candidate has been over-promoted in this way then his or her practice will suffer. The people who sent the candidate lower level work whilst a junior will cease to do so after the appointment. But, after the over-promotion there will not be enough people willing to purchase that QC's services as a QC (at whatever price)". They added that the "distortion in the market takes place where candidates have been unsuccessful in applying for Silk or, fearing they would be unsuccessful, do not apply for Silk. There are several such very good persons who fall into this category at any one time. As they become more senior work may be diverted from them to people who have successfully applied for Silk. This is because, in some cases, a purchaser simply wants a QC for the sake of having a QC and even though the other barrister - of equal seniority - would do the job as well or sometimes better, because he or she is not a QC the work is not forthcoming".
A set of chambers said, "our view, in short, on the central question raised by the OFT Report, is that the QC system cannot be justified as being in the public interest or in promoting competition in the market for legal services….We do not think that there is any need for a quality mark in the market for individual barristers' services. Those services are mainly purchased by specialists and there is ample information publicly available about the relatively small number of barristers to enable those specialists to make informed choices…. The way in which the QC system operates in practice, in our experience, positively distorts competition rather than opening up the market to competition. For these and other reasons our view is that there can be no justification for retaining the QC system, and in the absence of any compelling case for its retention it ought to be abolished".
The response from the London Solicitors Litigation Association stated that at least one of the firms on its committee was not in favour of the QC system being retained in any form. The committee in any event considered that the QC system, if retained, was capable of improvement, both at the appointment stage and thereafter. As an overarching point, the committee was concerned that having decision making invested in the LCD had created the perception that considerations are taken into account which are not exclusively merit driven, whether it be in relation to gender or the nature of the chambers to which an applicant belonged.
The Bar Sole Practitioners' Group was unanimous that the Silk system operated against the public interest. All members of the committee wanted it abolished. The reasons were:
It was anti-competitive. No other profession in this country saw any need for a system of Government appointed persons who are able to suppress competition.
It forced solicitors and lay clients to have Queen's Counsel who sometimes lacked the specialist knowledge that was required.
It wasted large amounts of taxpayers' money.
The impression was created when the appointments were announced that those who were not selected lacked the ability of those who were.
The selection procedure was flawed. There was not an opportunity for the applicant to correct any false information before a decision was made. There was not even an interview.
There was the impression that the system is used by some Judges to stop certain defendants from having effective counsel.
If it were abolished the good Silk would have nothing to fear.
There was no opportunity for any check to be made as to whether holders of the office were suitable to continue with the privilege.
Solicitors acting under legal aid who briefed a Queen's Counsel were paid more money than if they instructed junior counsel well or more qualified and experienced. That was a waste of public money.
If two juniors of equal ability were led by a Queen's Counsel and a leading junior respectively on legal aid each junior counsel would receive 2/3 of their leader's fee meaning that one junior counsel would be paid at a higher rate than the other. That was absurd.
The Office of Fair Trading said, "We recognise that some of the old restrictions surrounding the conduct of QCs have been removed. However, we are concerned that the QC system may still operate to distort competition. Government involvement in distinguishing between junior barristers and QCs has no parallel in other markets. Furthermore, we question the operation of the system as a quality mark. There is no continuous quality appraisal to ensure that the quality mark of QC remains justified, and the nature of review on selection is open to question (e.g. in respect of its apparently limited customer orientation). It is also difficult to understand the client's need for a quality mark where the Bar maintains restrictions upon direct access by clients and while barristers' services are purchased via solicitors who are specialists. Given these considerations, it is questionable what value the system has to customers."
The AWB, the Haldane Society of Socialist Lawyers and the Women's Interest Group of the SLL indicated that, if the system of QMs is to be retained, it should be removed from the LCD and administered and regulated by the Law Society and the Bar Council. The manner of appointment must be and must be seen to be fair and non-discriminatory. Each applicant must be judged on merit in accordance with standards applied consistently and uniformly. An appeals process to an independent body, e.g. the Judicial Appointments Commission, could enable valuable monitoring to lead to improvements over time.
The Law Society's concerns about the operation of the QC system are essentially:
the present methods of identifying professional candidates do not satisfy the principles of good appointment practice, in particular in placing excessive reliance on the views of the serving judiciary and of a few members of the Bar; it is undesirable, in principle, for leaders of an independent profession to be selected by a Government Minister;
there has been concern that there has effectively been a quota for the number of appointments.
This is not to say that the Society opposes a mechanism that would enable solicitors and others instructing advocates readily to identify those advocates - solicitors and barristers - with the necessary specialism and experience required for a particular case.
The Young Solicitor Group (YSG) shares the Law Society's concerns about the method for appointing QCs. YSG recommends that the badge of QC be made available to all members of the legal profession (both solicitors and barristers), irrespective of whether they are involved in litigation or not.
The Trainee Solicitors' Group (TSG) said "The reform of the QC system raises several interesting points. Firstly, one must be careful not to create an exalted position, which would adversely affect the Law Society's mantra, namely that the profession should be accessible by all. The QC system could result in the creation of a two-tier system that many would find difficult to aspire to… Secondly, the QC system although positive since it would be highly regulated and scrutinised, could lead to elitism….Thirdly, it is the duty of the TSG to be the eyes and ears of its membership. The relationship enjoyed by solicitors and barristers is of the utmost import and changes should be made in a manner that would seek to emphasise this relationship. It should be reiterated that the QC system should apply to both solicitor-advocates and barristers."
The Legal Action Group "recognises that it is in the interests of consumers to have a means of understanding the different skills, expertise and areas of interest among barristers before committing a brief to someone. We also recognise that it is reasonable for barristers who can offer greater knowledge to be able to command a higher brief fee for this reason. Further, we accept that in complex cases it is often necessary to have two barristers involved in preparing and presenting the case."
The Law Society of Northern Ireland (LSNI) said "We have no experience of the operation of the QC system in England. However, as a matter of principle, LSNI has no objection to a mechanism which marks seniority and achievement in the legal profession, nor do we regard such recognition as anti-competitive per se or contrary to the public interest. We accept that in this context, however, important issues arise in relation to the methods of recognition."
One set of chambers stated that, although paragraph 134 of the consultation document 'in the Public Interest' claimed that the QC system provided a career structure for advocates, dividing an entire profession of more than 10,000 practitioners into two ranks of senior and junior was hardly a career structure worthy of the name. Instead, by providing only one clear demarcation within the whole profession, it had a distorting effect by placing an enormous premium on the one opportunity to "progress" within the profession. Barristers approaching the point at which they might expect to apply for Silk, were becoming "haunted" by the QC system. Potential applicants lived in fear of not being appointed, while also fearing being appointed and having no work as a "junior Silk". Good talent was wasted. Others strove to get Silk and were rebuffed, possibly repeatedly and forever, leading to great personal anxiety. They felt the QC system positively distorts careers rather than providing a structure as claimed.
That set commented: "If there is to be some form of quality mark, however, our view is that it would have to be radically different from the present system if it were genuinely to operate in the public interest. We think that there are various features of the present system which not only mean that it fails to operate in practice as a reliable quality mark for the benefit of the users of legal services, but which also affect the quality of representation available to members of the public. These include, above all, the system's lack of independence from the Government, the lack of clear criteria and the nature of the consultation process." They concluded by saying that the "QC system is against the public interest. For the reasons above, we consider that it should be abolished".
A city firm of solicitors said "…we should say that we do not consider the Consultation Paper addresses all the issues in the Office of Fair Trading's report. That report questioned the value of the QC mark, asking whether there was a need for it. However, the Consultation Paper does not ask this question, merely asking how is the mark useful to users. Further, the OFT's report asks whether the QC system displays elements of a quota system and whether it is right that the Government be involved in the QC selection process. These issues are not dealt with in the questions asked in the Consultation Paper."
The Law Society said, "An additional feature in relation to QCs is that it has seemed anomalous for the leaders of an independent profession to be selected by a Government Minister. In its submission in 1999 to the enquiry by Sir Leonard Peach on the operation of the Judicial and QC appointments procedures, the Law Society said 'The designation of Queen's Counsel is essentially a public honour accorded to a private group. There is no logical reason why such an honour or its equivalent, might not be given to outstanding doctors, dentists or accountants. The rank has long since ceased to have any relationship with being Counsel for the Queen. The designation is a mark of patronage that is inappropriate in the modern age.' The policy was confirmed by the Council of the Law Society in September 2000 when the Council decided to remain outside the automatic consultation process for judicial appointments and Silk."
The Judiciary said, "Those who wish to be a QC have to show that they have reached those high standards. The temptation to 'bend the rules', given the pressure to win from clients and solicitors, is never far away. The conferment of Silk by the Lord Chancellor, who is independent of the Bar and of the solicitors' profession, is an endorsement of the qualities and integrity of the recipient, and as such an important assurance to the public and the courts. Further, we believe that the process of consultation, assessment and ultimate appointment that currently operates is as wide-ranging and thorough as is practically achievable, and that, over time, candidates who merit Silk are able to achieve that rank."
The Bar South Eastern Circuit said, "We would concede at once that on a detached and theoretical analysis, there is an attraction in suggesting that those who may have to protect the individual from the state ought not to depend upon a minister of that same state for professional advancement. On a practical level, however, we are not persuaded by such considerations….The second, related, problem with a separation between the government and the appointment process would come, once again, against the background of publicly funded work; at present, the benchmark of the QC rank is part of the scheme for funding such work. It is not easy to see how that arrangement could be maintained if a body entirely separated from government was responsible for assigning the rank. Perhaps above all, the job done by the Bar is profoundly different from that carried out by other professions, as the adversarial process and the resultant duties of the advocate to the court are features unique to the legal profession. It is possible to see solicitors, barristers and the judiciary as part of a forensic community, with figures such as the Lord Chancellor at the head. If the system that appoints QCs functions properly it should make the award contingent on the emergence of a consensus amongst that community. This would simply not be the case if the Lord Chancellor and the judiciary were excluded from the appointment process….In summary and conclusion, we support the continuation of the current system of the appointment of QCs by the Lord Chancellor."
The Legal Action Group " does not believe that any of these factors justify the continuation of the QC system. In our view, it is anomalous that a government minister should have responsibility for selecting senior members of a profession for a life-time quality mark that allows them to command higher fees for areas of work effectively reserved to themselves. There is no other profession where the government has such a role, or even a function similar to its role in the QC selection process."
A set of chambers said, "Paragraph 135 of 'In the Public Interest' claims that the Lord Chancellor is well placed to appoint Silks. We disagree. Any appointing process must be entirely independent of government, particularly given that government is itself a regular litigant. It is also a litigant which appoints (in both the criminal and civil contexts) panels of barristers to act for them. There is no doubt that appointment on such a panel gives the greatest possible assistance to a Silk application. And yet many choose not to be on such a panel because they would prefer to spend their working life working for those who are not as well placed to obtain expert and usually expensive representation."
The Judiciary said "Although none of the questions is specifically directed at the view-point of the judges (as opposed to that of client-"users"), we strongly support the Government's view that the maintenance of the QC system is in the public interest, not simply as "a quality mark in the market" (paragraph. 125 of 'In the Public Interest'), but as an important part of the machinery of justice. As judges, we attach importance to the identification of a body of advocates who are the leaders in their profession, not only as being excellent lawyers and advocates but above all, as having complete integrity. Under the established system, the Courts rely heavily on advocates to perform their role properly and honestly; they could not function effectively without that support. The importance of this role is heightened in cases of special difficulty or complexity, or those subject to particular public or political interest, in which QCs are most likely to be involved. We also consider that the system of appointment as QC provides a focus for the profession which operates in the public interest. Provided those who are broadly regarded by their peers as having attained that level of excellence which justifies the accolade of Silk are seen ultimately to achieve the distinction of Silk, which we believe is normally the case, the institution of Leading Counsel is a goal, as well as a gold standard, to which the junior members of the profession can legitimately aspire."
The Criminal Bar Association said "We regard the appointment of Queen's Counsel as the highest endorsement by the legal profession of an advocate's ability, integrity and independence. Both client and court can proceed with confidence on that basis."
The Bar South Eastern Circuit said "We would contend that the rank of QC does perform a useful function. It does so as one of a range of factors that a solicitor can consider when deciding to instruct a certain member of the Bar. Our adversarial system of justice gives rise to justification for the current system. In such an adversarial system, the court does not itself investigate a case, but is dependent on the parties, through their advocates, presenting each side's case with vigour but also objectivity. As a result, the advocate has a duty to the court which is fully recognised in the Bar's code of conduct. The skill with which an advocate is able to reconcile his duty to the court with his duty to his client is an important element in his success. The rank of QC is itself recognition of this skill and the system therefore plays its part in maintaining these vital standards."
76 respondents answered the questions on the Silk system. These included the Bar Council, the Law Society, the DTI, the Treasury and the Judiciary, as well as many individual law firms, local law societies and a commercial bank. The majority did see some benefit in a QC system (although the reasons varied).
There was much support from law societies, law firms and solicitors associations for an appointment body independent of Government. The Treasury and the DTI, supported by the Law Society, suggested some form of re-accreditation system which could result in the removal of the award if performance declined. The Judiciary and the Bar were against such a system. There was a range of views about the value and quality of the present consultation system.
Abbey Legal Protection
Abbey National Group
Joanna Addison (Ray, Borley & Dunkley, Solicitors)
Allen & Overy, Solicitors, Litigation Department
Amulet Group
Association of British Insurers
Association of Chartered Certified Accountants
Association of District Judges
Association of Personal Injury Lawyers
Association of Women Barristers
Bar Sole Practitioners Group
Barclays Bank Trust Company Limited
Bates Wells & Braithwaite, Solicitors
Blake Lapthorn, Solicitors
Carol Blakey (solicitor)
Dr Maurice Bloch
Simon Bond (O'Riordan Bond, Estate Agent)
British Legal Association
Peter Browne (The Law Shop)
Michael B Buck
Stephen Bucknill (Cooper Son & Caldecott, Solicitors)
Peter C Careless (sole practitioner)
Sue Carter (Ross Carter, sole practitioner)
Aileen B Chapman (Chapman & Chubb, sole practitioner)
Chartered Institute of Taxation
The Chartered Institute of Patent Agents (CIPA)
Clifford Chance LLP, Solicitors
David E Cohen (Ellis & Co, Solicitors)
Council for Licensed Conveyancers (CLC)
Council of Mortgage Lenders
Countryside Agency
Stephen Coyle (solicitor)
Credit Services Association
Criminal Bar Association
Curwens, Solicitors
Trevor Dale (sole practitioner)
David H N Davies (sole practitioner)
Janet Dawes & Ruth O'Neill (solicitors, joint response)
Elspeth Deards, Senior Lecturer in Law, Nottingham Trent University
Direct Conveyancing Association
Department of Trade and Industry
District Registrar Joyce, Bristol District Probate Registry
Eifion Edwards
Amanda Epstein (Woolley Bevis & Diplock, Solicitors)
Fairbrother & Darlow, Solicitors
Financial Services Authority
FirstLAW, Solicitors
FitzHugh Gates, Solicitors
Patrick Flaherty (sole practitioner)
Nicholas P Fluck (Stapleton & Son, Solicitors)
Roy Fox
FreeClaim IDC plc
Gary Garland (International Criminal Tribunal for the former Yugoslavia, The Hague)
Michael Garson (Law Society Council Member, Residential Conveyancing)
General Council of the Bar of England & Wales
Russell Graham (Zermansky & Partners, Solicitors)
A T J Greenwood (Cooper Son & Caldecott, Solicitors)
H M Land Registry
H M Treasury (on LPP)
H M Treasury (on whole consultation)
Haldane Society of Socialist Lawyers
Tim Halstead (Shulmans, Solicitors)
Jennifer M Hardy (Bishop Akers & Co, sole practitioner)
C R T Harris (Toby Harris Tax Consultancy)
Peter Hartley (Leech & Co, Solicitors)
HBOS, plc
N M Hedges (solicitor)
Herbert Smith, Solicitors
Mark P M Horn
Thomas Horton & Sons, Solicitors
Howlett Clarke Cushman, Solicitors
Mrs Maralyn L Hutchinson (Kagan Moss & Co, Solicitors)
Nick Hutchinson (Nick Hutchinson & Co, sole practitioner)
The Institute of Legal Executives (ILEX)
Institute of Chartered Accountants in England & Wales (on MDPs)
Institute of Chartered Accountants in England & Wales (on probate)
The Tax Faculty of the Institute of Chartered Accountants in England & Wales
Institute of Chartered Accountants of Scotland
Institute of Indirect Taxation
Institute of Trade Mark Attorneys
International Underwriting Association
Irwin Mitchell, Solicitors
The Judiciary
Michael David Kaye, Kaye Tesler & Co, Solicitors
Keoghs, Solicitors
Klegal
KPMG LLP
Law Societies of:-
Bedfordshire; Berkshire Buckinghamshire & Oxfordshire;
Bournemouth & District; Bristol;
City of London; City of Westminster & Holborn;
Gloucestershire & Wiltshire Incorporated; Halifax Incorporated;
Hampshire Incorporated; Hertfordshire;
Kent; Lancaster Morecambe & District;
Leeds; Manchester;
Newcastle upon Tyne; Preston Incorporated;
Sheffield; South London;
Stockport Incorporated; Surrey;
Sussex; Swansea & District Incorporated;
Tees Valley; Tunbridge Wells Tonbridge & District;
West Cumberland; West London;
Westmorland; Yorkshire.
Law Society of England & Wales Groups and Sections:-
Association of Women Solicitors
Commerce & Industry Group
Law Management Section
Local Government Group
Sole Practitioners Group
Trainee Solicitors' Group
Voluntary Sector (Group)
Young Solicitors' Group
Hertfordshire Local Group of the Sole Practitioners Group
Law Society of England & Wales
Law Society of Northern Ireland
Law Society of Scotland
Legal Action Group
Legal Aid Practitioners Group
Legal Services Commission
Legal Services Committee for Wales
Legal Services Ombudsman (then Ms Ann Abraham)
Lincoln small business focus group
Linklaters, Solicitors
London Common Law & Commercial Bar Association
London small business focus group
London Solicitors' Litigation Association
Michael Loup (solicitor)
Michael Loveridge (sole practitioner)
Laurence N Mann (A L Hughes & Co, Solicitors)
Montagu Martin (sole practitioner)
Matrix Chambers, eleven signatories
Dr Harry McVea (School of Law, University of Bristol)
Motor Accident Solicitors' Society
Notaries Society
Mrs E Obuaya
Office of Fair Trading
Oglethorpe & Broatch, Solicitors
Terence P O'Halloran (chartered insurance practitioner)
David Perkins (estate agent)
Projects Partnership Limited, Solicitors
Public Concern at Work
RAC Legal Services
Reform of Complaints Against Solicitors (ROCAS)
Arnold Rosen (Arnold Rosen & Co, sole practitioner)
Royal Institution of Chartered Surveyors
Anthony Ruane (DLA, Solicitors)
Rydon Group Limited, In House Legal Department
Serious Fraud Office
Sharp & Partners, Solicitors
Geoffrey A Shindler (Halliwell Landau, Solicitors)
Solicitors for Independent Financial Advice (SIFA)
Shireen Smith
Society of Black Lawyers
Women's Interest Group, Society of Labour Lawyers
Society of Scrivener Notaries
Society of Trust & Estate Practitioners
Solent Property Lawyers
Solicitors Property Group
South Eastern Circuit of the Bar
Standard Life Bank Limited
Sue Stapely
Jonathan Steinberg
Sussex Solicitors' Sole Practitioners' Group
Taylor Walton, Solicitors
RCW Tilbrook (Tilbrook's, sole practitioner)
walkermorris OnLine, Walker Morris, Solicitors
Wards Solicitors
Ware & Kay, Solicitors
APM Watney (Kidd Rapinet, Solicitors)
Robin Wilson (Warren, Upton & Garside, Solicitors)
Peter Wiseman (Rutherfords, Solicitors)
Worshipful Company of Fuellers
Wynne Baxter, Solicitors
Yorkshire Building Society
CONVEYANCING
Question 1 - What is the likely level of demand from other potential providers (e.g. banks and building societies) to be able to offer conveyancing services under the arrangements provided for in sections 34-52 of the Courts and Legal Services Act? Would this demand be affected if the Law Society were to allow employed solicitors to provide services (including conveyancing services) to the public? Is the introduction of e-conveyancing likely to affect the demand?
Question 2 - Are these safeguards sufficient to protect the consumers' interests? Will they be sufficiently flexible to avoid excessive regulation when separate rules for electronic conveyancing have been introduced?
Question 3 - If the Government were to introduce the authorised conveyancer scheme, would there be any likely impact on solicitors' firms, particularly the smaller practices? And if so, is any impact likely to have implications for the location of firms, particularly in relation to the availability of access to legal services for those in rural communities? Is there likely to be any innovation in service delivery to rural communities as a result of these changes?
Question 4 - What do you perceive may be the benefits that could flow from widening provision of conveyancing services through implementation of this legislation? Are there disadvantages?
PROBATE
Question 5 - If section 54 of the Courts and Legal Services Act were implemented it is unlikely that banks, building societies or insurance companies would be (or could be) regulated in the provision of probate services by the Financial Services Authority. If this is the case, the only regulatory control over these bodies would be the condition that they are a member of, or otherwise subject to, a scheme which:
has been established (whether or not exclusively) for the purpose of dealing with complaints about the provision of probate services; and
complies with such requirements as may be prescribed by regulations made by the Lord Chancellor with respect to matters relating to such complaints.
Does this provide sufficient protection for consumers?
Question 6 - Is the procedure set out at Schedule 9 to the Courts and Legal Services Act 1990, under which the Lord Chancellor may add to the list of 'approved bodies' whose members should be regarded as qualified to provide probate services for reward, sufficient to ensure there is adequate protection for consumers?
Question 7 - The broad range of regulated activities by solicitors requires high levels of regulation. This may lead to higher costs which are passed on to consumers in the form of higher prices for services provided. The lower regulatory burden applied to new providers of probate services, approved under Section 55 of the Act, may lead to lower prices to the consumer but do they provide sufficient protection for consumers?
Question 8 - What is the likely level of demand from other potential providers to be able to offer probate services provided for by either section 54 or section 55 of the Courts and Legal Services Act and how would this demand be affected if the Law Society were to allow employed solicitors to provide services (including probate services) to the public?
Question 9 - If the Government were to implement the measures provided for in Sections 54 and 55 of the Act, would there be any likely impact on solicitors' firms, particularly the smaller practices? And if so, is any impact likely to have implications for the location of firms, particularly in relation to the availability of access to legal services for those in rural communities? What innovations in service delivery might be made by providers to continue to satisfy customer demand, especially in rural areas?
MDPs and EMPLOYED SOLICITORS
Question 10 - How much use do you make of any facility in present day legal
services to obtain different services from the same source and what are
the services involved?
Question 11 - In new business models, should the Law Society be empowered to regulate non-solicitor partners, directors and shareholder/owners, and non-hundred per cent solicitor controlled businesses?
Question 12 - Do you object or agree in principle to the Law Society being enabled to regulate new style business structures and their participants whether or not they are solicitors?
Question 13 - What, if any, safeguards should be fundamental to any development of new methods of supply of legal services?
Question 14 - What are the essential safeguards that should not be compromised, if different levels of consumer protection were applied in different models of business offering legal services?
Question 15 - Should multi-disciplinary practices be bound by the same practice rules as present day firms?
Question 16 - Do you believe that the present set-up of firms and employed solicitors discourages or prevents entry into the profession of any groups of people? If so, which and why?
Question 17 - Is it important to you that different transactions with a solicitor should be covered by the same levels of consumer protection?
Question 18 - Would you welcome the development of new methods of supply of legal services?
Question 19 - If you are a solicitor, would you wish to provide services through the new models?
Question 20 - Do you think that the new structures could offer a type of service, or a mix of services, not at present available and for which there is a significant demand?
Question 21 - In considering the developments of new models, should such developments be limited to the inclusion of other professionals or widened to include non-professionals? If you believe that restriction to professionals only is important, your reasons for your view would be appreciated.
Question 22 - If the legislation were amended to allow non-solicitor partners, directors and shareholders, should a percentage of solicitor partners, directors and owners be specified? Should there be a majority of solicitors in control in such businesses? Do you want to suggest a percentage? Is this something that should be for the professional rules or should it be framed in legislation? Would specific proportions be necessary to ensure the appropriate level of solicitor practitioner independence and freedom from external pressure?
Question 23 - For clarity for consumers, should a practice using the term 'solicitor' in its name have a majority of solicitor partners /directors/shareholders?
Question 24 - It has been suggested that the quality of the non-legal personnel which firms of solicitors can attract, and thus the effectiveness of the competition they can offer in the markets for non-legal services, is constrained by the fact that they cannot currently offer such staff career prospects leading to principal appointments. Do you agree? What, if any, has your own experience been of this?
Question 25 - If you are a non-solicitor, do you have an interest in entering into MDPs with solicitors, if that were permitted? Do you believe interest exists among other organisations in your field of operation, in entering into MDPs with solicitors?
Question 26 - Should employed solicitors be allowed to undertake reserved work, unreserved work, or both, for third parties?
Question 27 - Will trainee solicitors be interested to join such enterprises? Are there any perceived benefits over private practice for entrants to the profession?
Question 28 - Would new style business models encourage more diverse entry into the profession (for example, in class, race, sex)?
Question 29 - What features would you like to see in such models to encourage entry?
Question 30 - Do you consider that the quality or cost of the services which clients obtain would be improved if multi-disciplinary practices involving both solicitors and non-solicitors were permitted?
Question 31 - Will present standards of integrity, confidentiality and independence change if employed and other solicitors are allowed to offer their services through the new business models?
Question 32 - Are there benefits or disadvantages in new models of business for (a) privately funded legal services (b) publicly funded legal services (c) pro bono legal services? What are they?
Question 33 - How important are the perceived benefits to you? Are they outweighed by the risks?
Question 34 - If you already operate in a legal practice providing ancillary services, what benefits or disadvantages might new model MDPs offer you?
Question 35 - Would these potential changes reduce or increase the number of solicitors' firms? What implications will the changes have for (a) the provision of privately funded legal services (b) publicly funded legal services (c) pro bono legal services?
Question 36 - Would the new business models impact on the ability of individual solicitors to undertake a range of work? Would the new models concentrate the work in the hands of a small number of large firms? Would the new firms concentrate on particular areas, e.g. commercial clients? Will personal, legally aided work and pro bono work be compromised by the potential developments? If business goes to bigger new style models, do you perceive any risks in the new businesses limiting the kinds of work they do or offer?
Question 37 - As a supplier, would new models enable you to provide services to your clients more or less effectively and efficiently than now? Do you perceive any impact on privately funded legal services, publicly funded legal services, pro bono legal services?
Question 38- If there were adverse effects on old businesses, would this be offset in whole or in part by the availability of employed solicitors' services to the public?
Question 39 - Would the development of new business models (a) reduce or increase numbers of firms in rural areas (b) affect the services firms in rural areas offer (c) change the way in which customers in rural areas might be served?
Question 40 - Would solicitors' professional independence and standing in England and Wales be perceived abroad as diminished, if the new style practices are brought in? Will these potential developments in new style business models affect the UK's position internationally in the provision of professional services?
LEGAL PROFESSIONAL PRIVILEGE
Although the OFT report mentioned only tax advice in this context, it would
be wrong in principle for the Government to limit its consideration of the
issue to that area alone. So consultees are invited to mention any other
profession whose members might be placed at a competitive disadvantage because
of legal professional privilege.
Question 41 - Is there any evidence that accountants and tax advisers might be - or are, in practice - disadvantaged by the doctrine of legal professional privilege?
Question 42 - If so, what is it about the provision of the Taxes Management Act 1970 that makes it inadequate to level the playing field?
Question 43 - If privilege were to be extended to communications with accountants and tax advisers, what additions to their training and code of ethics would be necessary?
Question 44 - What Government action would you recommend, or discourage?
Question 45 - Are there other professions (besides accountancy and tax advice) whose members might be commercially disadvantaged by the doctrine of legal professional privilege?
Question 46 - Is this just a theoretical possibility, or can consultees give any evidence that they are, in practice, disadvantaged by the doctrine?
Question 47 - What statutory or common law privileges do they have, and why are they inadequate?
Question 48 - If privilege is to be extended to communications with members of these professions, what additions to their training and code of ethics would be necessary?
Question 49 - If privilege is to be extended by reference to the nature of the advice given, rather than the nature of the adviser, how would you define extent of the privilege and the classes of advice to be covered?
Question 50- What Government action would you recommend, or discourage?
QUEEN'S COUNSEL
Question 51 - If you are a user (a client instructing a solicitor or exercising
direct access; a solicitor; or a foreign lawyer), how is the mark of QC
useful to you?
Question 52- Do you think the criteria for QC (set out above) are clear, relevant and useful? If not, in what way would you like to see them altered?
Question 53 - Do you think the appointment system could be made more fair and transparent?
Question 54 - Do you think the right people are consulted during the QC appointment process? If not, how would you like to see it altered?
Question 55 - If you do not think an extensive process of consultation is the right way of making the assessment against the criteria outlined above, how would you like to see it altered?
Question 56- Should individuals be able to lose their QC status if their standards decline? Would a re-appraisal process enhance the value of the system to customers? How might any re-appraisal process be carried out?
Question 57 - If you are a direct purchaser (i.e. solicitor/direct-access client) of barristers' services, have you had experience of using a junior or non-QC solicitor-advocate who then became a QC? If so, did you experience a "step-change" in fees on their appointment as QC?
Question 58 - If you are a QC, did you increase your fees on becoming a QC?
Question 59 - Do you think that QCs can command higher fees in addition to that which is explained by their superior skills alone? If so, please offer evidence.
Question 60 - If you are a solicitor, have you ever instructed a QC even though a particular junior or solicitor-advocate could undertake the case competently?
Question 61- If you are a client, have you ever instructed your solicitor to instruct a QC for a particular case, even where your solicitor advised you that a particular junior or solicitor-advocate could undertake the case competently? If so, why?
Question 62 - Do you feel there is a competitive advantage to QCs from their distinctive position in the courtroom i.e. on the Front Row (with juniors behind)?
Question 63 - If you are a user (a client instructing a solicitor or exercising direct access; a solicitor; or a foreign lawyer), have you ever been influenced by factors other than quality (e.g. the Front Row, whether or not the other side instructs a QC)?
Question 64 - Do you think that de facto demarcations exist in areas of work for QCs? If so, what effect do such demarcations have on the market? Are such demarcations a reflection of the accuracy of the QC system in marking out the advocates best able to deal with complex matters?
Question 65- If you think that the mark of QC causes anti-competitive distortions in the market, what and how great are they (please give evidence of their existence)? How might they be addressed?
Advocacy:
Legal ability and practice:
Professional qualities:
a history of honesty, discretion and plain-dealing with professional colleagues, lay and professional clients and the courts;
independence of mind and moral courage; and
the trust and confidence of others.
having the respect of the Bench and the profession in observing the advocate's duty to the Court and to the administration of justice8, while presenting their client's case; and
being formidable, fair and honourable as an opponent.
If you have any complaints or comments about the consultation process, you should contact the Lord Chancellor's Department's consultation co-ordinator, Laurence Fiddler, on 020 7210 2622 or email him at Laurence Fiddler Alternatively, you may wish to write to the address below:
Laurence Fiddler, Consultation Co-ordinator,
Room 8.23, Lord Chancellor's Department
Selborne House, 54-60 Victoria Street
London SW1E 6QW
The criteria in the Code of Practice on Written Consultation issued by the Cabinet Office is as follows:
Timing of consultation should be built into the planning process for a policy or service from the start, so that it has the best prospect of improving the proposals concerned, and so that sufficient time is left for it at each stage.
It should be clear who is being consulted, about what questions, in what timescale and for what purpose.
A consultation document should be as simple and concise as possible. It should include a summary, in two pages at most, of the main questions it seeks views on. It should make it as easy as possible for readers to respond, make contact or complain.
Documents should be made widely available, with the fullest use of electronic means (though not to the exclusion of others), and effectively drawn to the attention of all interested groups and individuals.
Sufficient time should be allowed for considered responses from all groups with an interest. Twelve weeks should be the standard minimum period for a consultation.
Responses should be carefully and open-mindedly analysed, and the results made widely available, with an account of the views expressed, and reasons for decisions finally taken.
Departments should monitor and evaluate consultations, designating a consultation co-ordinator who will ensure the lessons are disseminated.
Endnotes
The Administration of Justice Act of 1985 created a new profession of licensed conveyancer. A licensed conveyancer is a specialist property lawyer who is trained and qualified in all aspects of the law dealing with property. They can act for buyers, sellers and lenders. The first conveyancing licences were granted by the Council for Licensed Conveyancers in 1987.
The main reasons stated in the Government's consultation paper for continuing to appoint Queen's Counsel were first, that the rank of QC is one way of providing information on quality to experienced and inexperienced users. Second, in the absence of reliable information on quality, users are likely to stay with those previously tried and tested; therefore, a mark of quality facilitates competition by making it easy to switch to new providers. Third, a QC system provides a career structure for advocates within the legal system marking excellence and seniority.
The Kalisher Report ("Report of the Working Party Established by the Bar Council on the Appointment of Queen's Counsel", June 1994) stated the main advantages of the QC rank as: giving assistance to lay and professional clients, encouraging excellence, encouraging high standards, setting standards by example and encouraging public service international identification.
The response from the Judiciary was prepared by a working group, comprising representatives of the Court of Appeal, the three Divisions of the High Court, Circuit Judges and District Judges. It was endorsed by the Heads of Division.
Commissioner for Judicial Appointments Annual Report 2002
Commissioner for Judicial Appointments Annual Report 2002. The concerns about the mechanism for the appointment of QCs are set out at chapter 4 of this Report.
general comments are those made by respondents without referring them to any particular questions. These comments have been attached to the answer of the question where the comment was particularly relevant. Where general comments could not be as readily assigned, they are reported here, and may repeat specific points that appear elsewhere.
Section 42 of the Access to Justice Act 1999 gives statutory force to the existing professional rules which make it clear that the overriding duties of advocates and litigators are: their duty to the court to act with independence in the interests of justice; and their duty to comply with their professional bodies' rules of conduct.
