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LSEW breached competition law over training requirement, tribunal rules
The Law Society of England & Wales was in breach of competition law in the way it operated its Conveyancing Quality Scheme accreditation, the Competition Appeal Tribunal has ruled.
In a lengthy judgment the CAT found that the Society had abused its dominant position in the market by insisting that solicitor firms had to pay for the Society's own training in order to retain their accreditation under the scheme, which provides a recognised quality standard for residential conveyancing practices.
It found in favour of online provider Socrates Training, founded by solicitor Bernard George, which claimed that its business had suffered as a result of the requirement.
More than 3,000 firms, an estimated 65% of the total number active in residential conveyancing, are now accredited under the scheme, which was devised in 2010. The tribunal found that by the end of April 2015 the Society was in a dominant position in the market.
The Society had argued that training was an integral part of the scheme and there was no reasonable alternative to its own mandatory training, and that without it the scheme would lose its value to lenders and members, but the tribunal found that the supply of the training course itself was clearly different from the supply of accreditation, lenders did not take a strong interest in the content of the training, and there was no evidence to suggest that law firms might seek lower quality training to save money.
It further considered that there was "scant" evidence to support the Society's claim that it would be costly and administratively burdensome to accredit training providers to ensure they were of the requisite standard, as Socrates had suggested.
There was therefore no objective justification for the requirement, and the Society, having come to hold a dominant position, had abused it by thereafter obliging firms in the scheme to obtain the training in mortgage fraud and anti-money laundering required for accreditation exclusively from the Society.
The trbunal granted an injunction against the Society and will go on to consider damages. It has been estimated that once costs are taken into account, the case will cost the Society more than £1m.
Click here to access the decision.