Online courts could hear thousands of cases
|An online court should be created to hear civil claims valued at up to £25,000, the judge tasked with overhauling the courts system has recommended.
The controversial proposal, released in a report yesterday, from Lord Justice Briggs (pictured), triggered warnings from lawyers that most claimants would be channelled into a “second tier” system where they would be forced to pursue complicated actions without legal advice.
However, according to the final report of his structure review of the civil courts, Lord Justice Briggs, a Court of Appeal judge, enthusiastically backed the pilot online court programmes, which could ultimately hear tens of thousands of case annually. “The online court project offers a radically new and different procedural and cultural approach to the resolution of civil disputes,” he said.
The Times reported that the judge claimed that moving lower grade civil claims to an online dispute system “may pave the way for fundamental changes in the conduct of civil litigation over much wider ground than is currently contemplated by its first stage ambition, to resolve money claims up to £25,000 subject to substantial exclusions.”
His suggestions have already stirred concern at the Bar Council, which represents barristers in England and Wales. “Any moves towards an online court for claims of up to £25,000 must avoid the risk of entrenching a system of two-tier justice,” said Chantal-Aimee Doerries, QC, the council’s chairwoman.
The Bar fears that “individuals opting to use a lawyerless online court process could easily find themselves in litigation with big organisations which can afford to hire their own legal teams”.
David Greene, a former president of the London Solicitor Litigation Association and senior partner at the law firm Edwin Coe, said: “It is vital that we all have confidence in the online court, its functioning and development. The marriage between IT and the court process has not always been a happy one and so the recognition by Briggs of piloting with smaller claims is all important”.
14 July 2016
The chief executive and chair of the Solicitors Regulation Authority (SRA) have hit back over criticism of their plans for a comprehensive rewrite of the handbook.
Among the changes would be a move to allow solicitors to practise from unregulated firms for the first time, which the Law Society argued earlier this week would pave the way for a two-tier profession and leave consumers unprotected.
Paul Philip, chief executive of the SRA, said at a press briefing after yesterday’s board meeting that some solicitors would welcome the freedoms the rewrite would bring.
“Others believe the system is not broken and does not need to be fixed. The main problem in the market is that the vast majority of people cannot afford to use solicitors. What are the drivers of that cost? Regulation and indemnity insurance.
“We believe that by allowing solicitors to work outside an authorised entity, it will make a contribution to improving access to legal services and enforcement of civil rights.
“Consumers will need to understand what protections they have, and what they don’t have, on legal privilege and indemnity insurance.”
Mr Philip said that nowhere in last week’s report by the Competition and Markets Authority (CMA) was there any evidence of detriment to consumers by using the unregulated sector.
He denied that the SRA was diluting the solicitor brand by changing regulatory arrangements to open up the market and improve competition.
“Everything we’re doing is to maintain high professional standards for solicitors. Are we reducing the solicitor brand? Absolutely not.”
Mr Philip described the handbook rewrite as “radical” and said the Law Society’s views would be considered, along with the others.
He added that he did not believe allowing solicitors to practise in unregulated firms was “such a big leap”. He said the question was whether the change helped members of the public to access advice from a properly trained solicitor with high standards rather than an unregulated adviser who was not even a professional.
Enid Rowlands, chair of the SRA, said the regulator did not share the view that nothing was broken; the CMA reports had highlighted areas where services were not being delivered.
“We need competition to ensure services are reliable and accessible. A 400-page rulebook is likely to dampen competition and reduce the scope of services. A more principles-based approach will make competition more likely. Small businesses and individuals need help for a whole range of reasons, but they don’t access it.”
Both Mr Philip and Ms Rowlands cited the CMA report’s backing for the legal regulators to be fully separated from their representative bodies.
Mr Philip said that, given the referendum, it was natural that the government’s attention was “elsewhere”, but it had launched a consultation on reforming the rules for alternative business structures last week and separation was the “second half” of the Treasury ‘better deal for consumers’ proposals.
Earlier the SRA board approved a reduction in this year’s practising certificate fee for solicitors from £320 to £290. The SRA set compensation fund contributions at £32 for individuals and £548 for firms.
However, the PC fee depends on a decision by the Law Society council today on the net funding requirement for the Law Society group. It will then need the approval of the Legal Services Board.
Accountants bid to regulate reserved legal services
One of the three organisations for chartered accountants in England and Wales is pitching to be approved as a regulator of reserved legal services, it emerged yesterday.
The Institute of Chartered Accountants has applied to the Legal Services Board to become an approved regulator and licensing authority for five activities, three of which are limited to tax advice. Those three tax fields involve the conduct of litigation, rights of audience and reserved instrument activities. The other fields are notarial services and the administration of oaths. The institute is already an approved regulator and licensing authority for probate work.
If the board gives the application the green light, the market for legal services regulation will become a bit more crowded. The board already oversees nine groups, including bigger players such as the Solicitors Regulation Authority and the Bar Standards Board, and regulators of legal executives, licensed conveyancers and trademark attorneys.
Duncan Wiggetts, the institute’s executive director, said: “As an experienced regulator I am confident the Institute of Chartered Accountants will ensure its members and firms provide excellent reserved legal services to the public.”
Row over insurance cover in liberalised regulation regime
Law firms could be left in an insurance gap and clients out of pocket in cases of negligence if plans to drop barriers to lawyers switching regulators are given the green light, the solicitors’ trade union said on Friday.
In yet another round of sniping in the war of words between the Law Society and the Solicitors Regulation Authority, the arcane role of run-off insurance cover for law firms was put in the spotlight.
The SRA has proposed that lawyers should be allowed as much flexibility as possible in choosing which authorised regulator should oversee them. The Law Society has said that it supports in principle the authority’s aim “to encourage a competitive market by removing unnecessary barriers”.
However, the organisation’s chief executive, Catherine Dixon, warned that switching regulator “must not be at the expense of client protection. We are concerned that the SRA’s proposals could leave existing and past clients of firms that switch regulator without appropriate cover.” Dixon added: “We cannot be confident that other regulators’ professional indemnity insurance requirements can appropriately accommodate an unknown number of solicitor firms coming under their umbrella.
“We will therefore be requesting that any changes to the regulatory framework which enables solicitors to change regulator ensures that PII arrangements protect our clients’ interests.”
An SRA spokesman said that the authority had raised client protection issues in its recent consultation on proposals for switching regulators. “Our aim as always is to strike the right balance on removing unnecessary restrictions on firms without reducing the protections in place for users of legal services.”
Recent research from the Solicitors Regulation Authority showed that less than half of those surveyed anticipated that they could afford to instruct a lawyer.
“It is the biggest problem facing the legal profession,” said Paul Philip (pictured), the authority’s chief executive, who did not shy from taking some responsibility. “In part, this is a failure of regulation,” he added.
Philip prescribed “more competition” as the cure for the public’s fear of high costs from taking legal advice. “More competition, and more information for consumers is what is required,” he said.
Philip was speaking at a conference in London that represented the authority’s latest bid to raise its profile and to ramp up its campaign for full independence from the Law Society, the body that represents 130,000 solicitors in England and Wales. He said that the vast majority of consumers had the perception that the SRA was “the Law Society in disguise”. Some 11,000 complaints from clients are received about solicitors annually, but, said Philip, “as soon as those complainants find out that the SRA is part of the same organisation as the Law Society they have a crisis of confidence in the system”.
Provisions in the Legal Services Act 2007 gave the regulator functional independence from the society; however, it is still technically part of the same body. Philip has spent much of the past year lobbying for full separation. He said last week that the current situation resulted in complainants generally perceiving that “an old boys’ club” was operating.
A leading pollster told the conference – which was titled Question of Trust – that public confidence in lawyers fell in the middle of the spectrum. When asked whether they considered lawyers to be trustworthy, Ben Page, the chief executive of Ipsos Mori, said that 29 per cent said “no” compared with 27 per cent who replied “yes”. The remainder were ambivalent.
However, Page provided the SRA with a boost, returning research showing that 82 per cent of the public backed the idea of a completely independent regulator for solicitors.
Bar Regulator looking for New Law business
The barristers’ regulator is looking for a guinea pig to test its ability to oversee new models of legal practice, it emerged yesterday.
The Bar Standards Board announced that it was looking for existing alternative business structures – business employing lawyers but that do not conform to the traditional partnership or chambers model – for a pilot programme.
Since April 2015, the board has been operating a halfway house by regulating lawyer-only bodies known as “entities” or “authorised bodies” that, while not being traditional chambers, were still run by lawyers. In contrast, ABSs can involve non-lawyer owners and financing.
“We encourage anybody who is thinking about establishing an ABS or entity to please get in touch with our entity regulation team to discuss your needs,” said Oliver Hanmer, the BSB’s director of supervision.
A market for regulators will emerge once the BSB becomes a fully-fledged regulator of ABSs, with the organisation competing for business with the much larger Solicitors Regulation Authority. But critics argue that competition will drive regulators to the lowest common denominator in a bid to land business.
Society President Jonathan Smithers said: “It’s no surprise to us that concern over the idea of selling off the Land Registry is growing – we’re talking about a vital piece of the national infrastructure,
“Whatever the political and ideological debates around privatisation, the Land Registry is not a commercial operation which can be easily privatised. Placing the Land Registry in private hands presents unique challenges and risks, which would have to be addressed should any form of sale proceed.”
Major concerns raised by the Law Society in its submission to government included:
- The vital role that public trust and confidence in the Registry plays in the smooth operation of the property market;
- Privatisation could hinder efforts to combat the laundering of illicit funds through the property market in England and Wales;
- The risk of fee increases to generate profits for private owners, at the expense of property buyers;
- The loss of the potentially huge future value of the information held by the Registry; and
- The great difficulties in ensuring a newly privatised natural monopoly couldn’t act in anti-competitive ways.
Jonathan Smithers continued: “Last week a debate in the House of Commons made it clear that these concerns are felt across the political spectrum.
“If these widely-held concerns are not carefully addressed, we fear that the public will be the real loser from any sale.
“With so many problems, costs and risks to the public to be carefully managed, it’s pleasing to hear the government say that they intend to listen to concerns raised during this consultation.
“Decisions on the future of the Land Registry should place the public interest in this vital institution first.”
Chief executive Catherine Dixon said: “The SRA proposals will enable solicitors to work for unregulated entities providing unreserved legal activities to the public. This has serious implications for client protection, legal professional privilege, professional supervision, competition and the standing of the solicitor profession.
“The proposals could result in two tiers of solicitors – those working in a regulated entity and those who are not – with different rules and protections applying to clients depending on where the solicitor is working.
“Advice from solicitors in unregulated entities may not be legally privileged, which means that the ability of the client to be candid with their solicitor without the risk that this information will be shared, may be lost. If part of the solicitor profession is unable to give legally privileged advice, this is a slippery slope which could erode legal privilege, a cornerstone of the justice system, and undermine the standing of the solicitor profession both at home and abroad.
“Also, solicitors working in unregulated entities may not be required to have professional indemnity insurance and may not be subject to the same conflict rules. Their clients may not have access to the compensation fund or the Legal Ombudsman.
“We are concerned that this will put clients at risk as they simply won’t know what protection they are getting when they instruct a solicitor.
“Changes to supervision requirements would mean that newly qualified solicitors with no experience would be able to set up their own unregulated firms. Newly qualified solicitors generally welcome the support and guidance from more experienced solicitors. If that’s not available it could place clients at risk as well as risking the standing of the solicitor profession.
“Also because the regulatory burden on solicitors working in regulated entities will be higher than on those who are not, this could result in unfair competition between providers of legal services which is not in the public interest.”
The SRA ‘s consultation Looking to the Future closes on 21st September. Implementation in Spring 2017
Competition and Markets Authority (CMA) produces interim report of the legal services market.
“It is therefore possible that an alternative regulatory model may improve competition if it is successful in reducing the emphasis on regulatory titles.”
The CMA also came out in favour of the legal regulators having “full independence” from the providers they regulate.
Senior director for the legal services market study, Rachel Merelie, said: “Consumers in this market are often not equipped with the right information before they make important purchasing decisions – which often come at critical points in their lives…
“Without greater transparency, individual and small business consumers find it difficult to compare and choose providers of legal services. For many of them this is an infrequent purchase and a lack of experience or prior knowledge makes it very challenging to assess what represents good value.
“As a result, they tend to rely on recommendations from family or friends in choosing providers without checking for themselves what the market has to offer. This is unlikely to drive effective competition.
“The lack of competition may remove a crucial incentive for such firms to compete on price and quality as well as innovate and may help to explain why there have been long-standing concerns over the affordability and accessibility of legal services.”
Oliver Hanmer is director of supervision at the Bar Standards Board. He says in The Times that the BSB, the regulator, wants them to think carefully about learning and professional development needs. It wants to give them flexibility to undertake the right CPD for them; it is recognised that one size does not fit all, and that even the number of hours of CPD that barristers must undertake will vary.
The reasons for this are clear: all barristers are different and some will require more CPD than others. Therefore, the emphasis of the BSB’s updated scheme is to provide more flexibility.
It will mean that established barristers will be free to plan their own CPD activities, will have greater flexibility in the types of CPD activities they undertake, will not be subject to any compulsory or accredited activities, will not be subject to a minimum number of hours and will no longer need to apply for an extension of time or a waiver from CPD requirements.
It is expected that this change and the increased freedom it gives barristers will encourage innovation and competition among course providers of CPD, although that was not the primary object of the reforms.
Also, and importantly, barristers’ CPD will continue to be supervised. While the new regime will provide greater flexibility regarding the type and amount of CPD activities, it does not mean that barristers can completely avoid CPD.
Far from it; the BSB will continue to supervise barristers’ CPD, and persistent and deliberate non-compliance will result in enforcement action.
To help barristers prepare for the arrangements, the regulator is planning a series of events around the country later in the year. Details of these events will be published soon.