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Law Society of England and Wales

Council Report (February 2011)

This is essentially a half-term report, because I have not written an article for Legal News since Linda Lee’s presidential year began last July.

Once upon a time and not long ago, it was a matter of some pride that we in England and Wales had an excellent legal aid system that was unrivalled by any other in the world. The attitude of government spokesmen such as the current Secretary of State for Justice that if a cheaper and less comprehensive system is good enough for foreigners it must be good enough for us too betrays everyone in England and Wales, our traditions, our values and our standards. This attitude does not compare like with like, as it assumes (falsely) that the cost of lawyers under our adversarial system is equal to that incurred under the inquisitorial system. It shows contempt for our rights: what is the point of giving rights to citizens which they cannot afford to enforce? And it is hypocritical: how can a government which prides itself on its equality tolerate a situation in which some people will enforce their rights because they can afford to but others cannot?

As many of you are too painfully aware, the future of the legal aid service remains uncertain. The Law Society’s victory over the Legal Services Commission in the judicial review proceedings about the award of family law contracts last September was in the public interest (although, understandably, it infuriated firms which had succeeded in obtaining the new contracts, which were voided by this result), but it resolved nothing. In its wake the Ministry of Justice has published the green paper Proposals for the Reform of Legal Aid in England and Wales. Simultaneously, it published another green paper, Proposals for Reform of Civil Litigation Costs in England and Wales. Please respond to these consultations. The legal aid road show at Capital Tower on 17 January was fully attended, so the concern of the local profession was evident but I cannot stress too much how important it is that those firms affected by these proposals respond to the green papers so this concern is also a mater of record. These green papers form the main item of business at the next council meeting on 15 and 16 February (the Law Society has been granted an extension of time to submit its response so that council can debate it).

Ian Kelcey, the chair of the Law Society’s criminal law committee is visiting Capital Tower on 7 February to address us (and to seek our views) on improvements that can be made to the criminal justice system to ensure it is as fair, efficient and effective as possible. You may have heard Ian interviewed on Radio 4’s Today programme. He’s very impressive and will be an entertaining and informative speaker.

The news on non-contentious work is not encouraging either. Unregulated will-writers remain unregulated more than a year after the Legal Services Board became operative. That is a shameful omission on its part. The recent forecasts are for the property market to grow this year but with banks preferring to pay bonuses to senior staff than lend money to prospective purchasers and with so many prospective purchasers unable to afford to borrow 75% of the price of properties anyway, recovery still seems someway off.

Better news for property lawyers is the Conveyancing Quality Scheme (CQS), a mark of excellence which the Law Society launched last autumn and which has the approval of mortgage lenders. Property lawyers are encouraged to join the CQS by 28 February so they can take advantage of the Law Society’s forthcoming publicity campaign which begins in April.

Worse news for property lawyers is the fear that lenders will require separate representation of buyers and lenders in a domestic conveyancing transaction. This would undoubtedly increase costs. Crucial to this issue is professional indemnity insurance (PII). Currently, PII covers corporate clients as well as individual clients and any reduction in the compulsory PII cover would result in lenders insisting that their panel solicitors had the additional insurance arrangements that they require which would cost the firm additional premiums. Since different lenders would impose different requirements, arranging this top-up insurance so it would cover the demands of all lenders for whom a firm worked would take up a lot of time as well as expense. It is therefore likely that reduction of compulsory PII cover would lead to greater use of dual representation for buyers and lenders. If the possible conflict of interest between buyer and lender was regarded as a significant issue separate representation would be sensible, but since the proposed rule on conflicts of interest in the SRA’s Architecture for Change consultation is unclear whether a conveyancer would be able to act for both buyer and seller which is a far greater danger, the probable growth of separate representation for buyers and lenders is an odd development.

The time for responding to the SRA’s consultation on outcome-focused regulation (OFR) passed on 14 January and we now await the next step in the progress towards OFR, which is the publication of the Handbook in March or April. I am a member of the regulatory issues subcommittee which responded to this consultation on behalf of Cardiff law society. We are now beginning work on responding to the SRA’s current consultation on the vexed question of PII.

The big item of business for the last council meeting in December was the Law Society’s budget for 2011. I wasn’t at the meeting, but I have seen the papers and can tell you that the budget was approved as drawn. No surprise there - it’s not an easy read! The budget covers the cost of running the Law Society group ie Law Society, SRA, the services shared by both the Law Society and SRA, the rundown of the LCS and the payments due to the Legal Ombudsman, Legal Services Board and SDT.