Changing its spots?

The Society's view of the amendments to date of the Legal Profession etc Bill, and of the latest developments south of the border

The Journal, November 2006, page 16

The reform of the legal profession continues to gather momentum, with legislation north and south of the border reaching a critical stage.

Already, around 650 amendments to the Legal Profession and Legal Aid (Scotland) Bill have been tabled, 80% of those from the Scottish Executive itself. Most of them have been passed by the Justice 2 Committee, voting along party lines. During November, the bill will move from stage 2 – detailed consideration by the Justice 2 Committee – to stage 3 of the parliamentary process, when it is very likely to be passed by MSPs.

At Westminster, the draft Legal Services Bill has been considered, and criticised, by a special joint committee of both Houses of Parliament, so it remains unclear what form it will take after it is included in the Queen’s Speech in mid-November.

The Law Society of Scotland has expressed serious concerns about a number of the proposals before the Scottish Parliament, as have many individual practitioners from across the profession.

Concessions won

The Society’s Director of Law Reform, Michael Clancy, explains that their efforts have not been in vain – but more needs to be done to make the bill acceptable.

He says: “The concessions from the Scottish Executive would not have been made had the Society and the profession not put their energies into ensuring that was the case. We had to persuade MSPs and the Executive of our arguments and in many ways we have done that. The Justice 2 Committee clearly listened and that is an indication that the Society’s bill team, working in partnership with the profession, have effected change. It would not have happened otherwise.”

Indeed, the fact that so many amendments have been brought forward – including 90 or so from the Society which were tabled by Conservative MSP Bill Aitken – is recognition that the bill required substantial change, something argued by the Society and others for many months.

However, Michael Clancy points out that the substantial number of amendments is also evidence that the Executive has at least taken the concerns of the profession into account.

He says: “No bill is ever introduced in a perfect form and the amendments have changed the bill considerably. Some notable changes include removing ministers’ power to direct the Commission, creating a role for the Lord President in the removal of Commission members, providing security of tenure for Commission members, and making some changes to the decision-making process.

In addition, solicitors and advocates exonerated in a complaint will not now be charged a case fee as originally proposed. The financial accountability of the Commission is to be improved, although it will still be able to fix budgets and impose levies on the profession.

Open to challenge

Michael Clancy adds: “The Executive’s concessions improve the bill but they do not go far enough, particularly in terms of ECHR compliance. We believe it is still necessary to have judicial involvement in the appointment process and appeal to the courts regarding the Commission’s decisions. We have warned the Executive that if they do not take the appropriate action the Act will be wide open to legal challenges.”

Other concerns remain too. The exact extent and nature of the proposed oversight of the Guarantee Fund and Master Policy, both excellent public protections as currently established, are still unclear.

Even more worrying, the Executive has brought forward new amendments that were not considered during the consultation phase. These include establishing a process that could lead the Society and the Faculty of Advocates to be held in contempt of court for failing to comply with a Commission recommendation. That, in turn, could lead to the President and Dean facing the possibility of imprisonment or payment of a fine. Also, it is suggested that, where an individual complaint is concerned, the details of the practitioner involved – but not the complainer – may be published if it is considered an exceptional case and in the public interest. Yet the fact that these sanctions would involve subjective decision-making by a quango, does not seem to have been taken into account.

However, Michael Clancy insists that the Society will make every effort to ensure further changes are made. The bill team will continue to work at drafting fresh amendments for consideration at stage 3.

He says: “The concerns of the profession remain undiminished as the process of reform continues. This bill is still deficient and we must all make our views known.”

Law from over the border

Society Chief Executive Douglas Mill is also critical of the late additions to the Scottish bill. He describes the new provision that could lead to the Society and Faculty of Advocates being held in contempt of court as “petty and vindictive”, and opposes measures that would result in the “naming and shaming” of solicitors.

However, he also raises concerns about some measures in the draft Legal Services Bill due to be introduced at Westminster, fears that were echoed at the recent annual conference of the Law Society of England & Wales.

While a number of broad worries have been expressed by solicitors south of the border – including concerns over the independence of the profession and threats to the rule of law – the issue that may have a knock-on effect in Scotland is the introduction of “alternative business structures” (ABSs).

Douglas Mill says: “Our difficulty is not with the concept or philosophy of ABSs, which may work to the benefit of Scottish firms. It is a matter of how they will be regulated in the public interest. It is the eleventh hour south of the border, and there is now a realisation that the regulatory model has not been properly thought out. The Society pointed out some time ago that, while the consumer interest is important, the public interest is more important, particularly in relation to access to justice.”

Yet, it remains likely that ABSs will be introduced in some form. That will have an immediate effect on firms with a cross-border presence and could lead to the backdoor introduction of “Tesco law” if ABSs in England and Wales were to open branches in Scotland. This would squeeze smaller firms and those in rural areas.

Further questions arise about the “fitness to own” test, which would be lower than that currently required for law firms. Poorly regulated providers of legal services are not in anyone’s interest. The legal profession can also rightly ask why it should be expected to underwrite the negligence or dishonesty of non-solicitors in ABSs through the Master Policy and Guarantee Fund.

Douglas Mill adds: “ABSs may offer some economic advantages to the biggest firms but disadvantages to others in many ways. We are having a debate about these issues and also gearing up for radical change. That applies not just to legal firms but to the advisers and consultants that solicitors rely on in the event of any change being introduced.”

“The challenge for the Society and its members is to ensure that policy makers understand the full implications of their dicta. We hope that the Executive is confident enough to admit when they have got it wrong.”

    Craig Watson is a freelance writer specialising in legal affairs