Society warns of ABS dangers
1 Feb 06
Summary of the Society's response to the UK Government white paper following the Clementi Report
Proposed reforms to legal services in England and Wales could undermine the core principles of the profession across Europe, the Law Society of Scotland has warned.
The Society outlined its concerns in response to the white paper, “The Future of Legal Services: Putting Consumers First”, published by the Department for Constitutional Affairs last October, based on the Clementi Report.
The response warns that the alternative business structures (ABSs) proposed in the paper are simply multi-disciplinary practices (MDPs) by another name, permitting external ownership of legal firms. But the “fitness to own test” required for ABSs would be lower than that currently required for legal firms. For instance, an external investor would not have to demonstrate commitment to the rule of law and maintenance of core values such as independence, avoidance of conflict of interest and professional confidentiality.
A system of non-lawyer owned firms was rejected earlier this year by the Council of Bars and Law Societies of Europe (CCBE), which represents 700,000 lawyers. The Society’s response states: “Although the CCBE recognised that so-called ABSs could entail some economic advantages, it strongly believed that there are over-riding non-economic reasons which go beyond the purely economic arguments and which clearly speak against the introduction of such business structures. In particular, the CCBE considered ABSs to conflict with the core principles of the legal profession.”
The Society points out the possible implications for Scotland should English-based ABSs seek to set up branch offices here. The Scottish Executive has promised “Scottish solutions for Scottish issues” and any further consideration of the unique legal market north of the border should await publication of the findings of the Legal Services Research Working Party, due to report later this year.
The response adds that the proposed Legal Services Board and Office for Legal Complaints in England and Wales would also pose a threat to the independence of the legal profession because there is potential for political interference in appointments.