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Crunch time

14 July 08

President's message: the Society is pressing for government action to mitigate the effects of the economic slowdown where it particularly hits solicitors' firms

by Richard Henderson

The credit crunch continues to attract considerable media and business attention, much of it on the global consequences of an economic downturn. However, the likely impact on the Scottish economy has also been the subject of increasing discussion.

A glance at the press coverage in Scotland shows the difficulty of judging the severity of the situation. Reporting the same analysis of business performance and expectations, one newspaper headline concluded that the Scottish economy was holding up, while another said it was feeling the full effects of the credit crunch. Yet all seem to agree that business is at least suffering a slowdown, with the service sector hit the hardest. Certainly, solicitors are reporting gloomy short to medium term prospects. Not surprisingly, conveyancers provide the most worrying forecasts, with some being forced to lay off staff because of the downturn in the housing market.

I fully appreciate the difficulties facing solicitors, not least from meetings around the country with deans of faculties and individual practitioners. That feedback is particularly useful if the Society is to represent most effectively the interests of our members. Within the last couple of weeks, we met with Kenny MacAskill, the Cabinet Secretary for Justice, and made robust representations about the potential effects of the introduction of home reports, with a request that the scheme be delayed, particularly when we know that home information packs depressed the property market in England & Wales. As I write, we await the outcome of those discussions.

Impact on the criminal side

Equally, while supportive of the Scottish Government’s reform of the summary criminal justice system, we are sensitive to the impact this may have on individual practitioners. During negotiations to introduce interim changes to the criminal

legal aid and assistance system – which came into force in June – the Society was assured that a rigorous review would be carried out to ensure that any savings in the overall criminal justice budget were available to reinvest in legal aid. Again, we know from our discussions with the Cabinet Secretary for Justice – including the most recent meeting – that he is keenly aware of these issues. We will continue to monitor legal aid and access to justice and report back to members.

Pushing for the Commission

With the opening of the new Scottish Legal Complaints Commission scheduled for October, invoices were sent out last month by the Society, as is required by the legislation. Given the pressures currently facing solicitors, the timing is unfortunate. The process for setting the Commission’s budget took longer than expected, making it difficult for the Society to inform firms of developments and, consequently, for practices to plan their finances. Likewise, establishing the Commission itself is not as advanced as we had expected. We have made representations to the Commission and the government, emphasising the importance of updating the profession on developments as quickly as possible.

Support from the floor

While there is a lack of clarity over the Complaints Commission, the likely introduction of alternative business structures continues to move forward. A constructive debate in the Scottish Parliament last month offered cross-party recognition of the Society’s role in driving the issue forward, and general support for ensuring that a robust and effective system of regulation is put in place to allow practitioners to operate their businesses as they see fit. A complex matter such as this requires a commonsense approach. For its part, the Society will now draw up a regulatory framework for consideration during the forthcoming legislative process.