Since my decision not to seek reappointment as chair of the Solicitors Regulation Authority beyond this month, I have reflected on both the progress in the regulation of solicitors in recent years and the challenges for the future. With such a vast subject, lack of space precludes mention of all the issues that have demanded attention. The Law Society’s decision to establish the SRA as its independent regulatory arm flowed from Sir David Clementi’s review of the regulation of legal services. From the outset my fellow SRA board members and I were clear that our job was to regulate fairly in the public interest. We were also acutely aware of the size of the programme of regulatory reform which would be needed to translate the Legal Services Act 2007 into reality, and to overhaul the regulatory systems we had inherited, which, for all their strengths, were no longer fit for purpose. There is still a distance to travel before we all arrive at the final destination. I do, however, believe that when we do, the journey will have proved worthwhile. The Legal Services Act brings with it significant opportunities both for clients and for the legal profession. It is up to the SRA and the other legal regulators to ensure that the regulatory framework is transparent, proportionate and effective, allowing new (and traditional) models of legal practice to flourish while protecting the interests of clients. And it is up to solicitors to seize the opportunity to respond flexibly to the needs of clients for accessible and affordable legal services. The SRA itself has strived to be as accessible as possible to the profession. We have held more than 50 Regulation Roadshows, in 20 cities and towns across England and Wales. More than 3,000 solicitors have attended. This is a small percentage of the total number of solicitors in practice, but nevertheless the scale of this programme has been unprecedented. The roadshows are two-hour events at which we explain our current thinking on key issues, listen to solicitors’ suggestions and answer questions. It was comments by solicitors at early roadshows about the professional ethics helpline being open only when they were most likely to be in court or advising clients that prompted us to double its opening hours. The helpline now operates from 9am-5pm Monday to Friday and is working to increasingly stretching targets to deal promptly with the high volume of calls it receives. We have done our utmost to take the views of solicitors and other stakeholders into account in the formulation of policy. We have held more than 40 consultations, reporting the responses and the outcomes on our website. Many of those consultations have related to laying the groundwork for legal disciplinary practices (LDPs) and alternative business structures (ABSs). We worked hard to enable LDPs – the first fruit of the Legal Services Act – from 31 March 2009. Although the number of LDPs established so far is only 130, I am certain that they will grow in popularity, especially in light of the recent decision by the Bar Standards Board to pave the way for barristers to practise in LDPs. An issue which caused me and my colleagues on the board great concern but turned out to be an opportunity for the SRA to make huge strides towards becoming a model of best practice, has been equality and diversity. I am particularly grateful to Lord Ouseley, a former chair of the Commission for Racial Equality, for the review which he conducted and for the invaluable advice and guidance he offered. While we must guard against complacency, substantial progress has been made in ensuring that the SRA’s processes operate fairly in relation to all sectors of the profession, clients and our employees. Diversity has also been a key driver in our work to widen access to the profession while maintaining standards and the reliance that can be placed by clients on the ability of their solicitor. The work-based learning pilot – an imaginative scheme to explore ways of enabling people whose circumstances would otherwise prevent them from trying to enter the profession to do so – is an important example of this. My successor, Charles Plant, and his board will inherit from the current board many substantial strands of work, including the implementation of ABSs, a further shift to outcomes-focused regulation, improvements to the regulation of the corporate legal sector, and new approaches to assuring the quality of both firms and individual solicitors. They will also have to put into effect the Legal Services Board’s new rules to underpin the independence of the SRA and discuss Lord Hunt’s proposals to improve the Law Society Group’s corporate governance arrangements. Each one of these programmes of work is a significant challenge, and I wish Charles and his colleagues every success. Finally, I would like to take this opportunity to thank my fellow board members, our chief executive Antony Townsend, his management team and all members of staff of the SRA for their efforts over the last four years or so. I have greatly valued the support, wisdom and good humour of them all. Peter Williamson is chairman of the board of the Solicitors Regulation Authority
Month: September 2020
The Bar Council has agreed to give its regulator a separate constitution enshrining its independence. Following approval by the Bar Council at the weekend, the Bar Standards Board will have its own constitution, giving it powers to choose the committees, standing orders and rules that govern its structure and operation. It will also move to change the composition of its board, which currently has a barrister majority, so it will have a lay majority by 2012. Next month all approved regulators have to certify to the Legal Services Board that they have put in place measures to ensure sufficient independence from the representative arms of their respective bodies, in compliance with the Legal Services Act 2007. Bar Council chair Nick Green QC (pictured) said the change, which reflects the current ‘cooperative modus operandi’ between the two bodies, was passed with ‘unanimous approval and no opposition’. ‘Under the act the Bar Council is the regulator and we delegate that function to the BSB, which must be independent, but the Bar Council has to preserve and protect that,’ he said. BSB chair Baroness Deech said: ‘It’s a great step forward. The new constitution recognises the independence of the BSB while allowing for reasonable input from the Bar Council.’ Russell Wallman, the Law Society’s director of government relations, said it was accepted that the composition of the Solicitors Regulation Authority’s board needed to change to give it a lay majority, and the two arms of the organisation were in talks over other changes that may be required.
This spring the management committee of the Employment Lawyers Association (ELA) decided to conduct a survey of its 5,500 members across England, Wales and Scotland to gain a clear understanding of their experience as representatives in employment tribunals. The exercise involved canvassing opinion on suggestions for reform, with the aim of improving efficiency and saving time and cost for all users of the employment tribunals (including the employees and employers our members represent). Our survey struck a nerve with our members. Some 20% responded, which, when taking into account individual responses and those who responded on behalf of their firms, was a significant proportion for such a survey. Most respondents were solicitors in private practice (81%). The ELA survey results coincided with the Tribunals Service announcing in July that, from April 2009 to March 2010, there was a staggering 56% rise in the number of claims being accepted by employment tribunals. The ELA survey revealed substantial dissatisfaction with the current performance of the employment tribunal system – hardly surprising perhaps, given the huge rise in the number of claims issued against the backcloth of recession. Some 31% of ELA members indicated that they were dissatisfied and 4% very dissatisfied with the service the employment tribunals provide. Only 33% indicated they were ‘satisfied’, in contrast to the 71% quoted in the recent Annual Statistics for Tribunals as a whole for 2009-10. And 56% of ELA members had experienced a decline in service, with the majority pointing to inadequate resourcing as the main cause. One key theme to emerge was concern about the lack of consistency around the country, with 83% indicating members believed employment tribunals do not adopt a consistent approach to practice and procedure. Some 75% indicated they believed employment judges were not being consistent in their judicial approach to handling cases. A very high proportion (over 93%) believed users would benefit from greater consistency. A number of suggestions were made to achieve greater consistency including the introduction of standard directions. Several problem areas in practice were raised, including: short notice postponements of substantive hearings; delays in listing procedural hearings; and cases going ‘part heard’ because of lack of judicial time. Only half were satisfied with the employment tribunals’ approach to costs applications and 68% said something needs to be done to deal more effectively with vexatious litigants. Several procedural reform proposals attracted widespread support, such as improved case tracking, more correspondence by email, use of standard agendas for case management discussions and holding discussions by telephone. A large proportion (79%) wanted large-scale equal pay claims to be handled by a single employment tribunal office. Many respondents also favoured judges sitting alone on cases such as unfair dismissals, to ease pressure on the system. ELA members were also surveyed on more radical suggestions taken from practices of other courts in the UK and around the world, including listing main hearings from Monday to Thursday, and reserving Fridays for procedural hearings, which attracted 60% support. In contrast, only 26% either strongly or fully supported ‘out of hours’ hearings with 32% completely opposed to the idea. One factor which increases the length of hearings is the reading out by witnesses of all or part of their witness statements. Somewhat surprisingly, only 27% of survey respondents fully supported taking witness statements as read, with 42% being strongly opposed to imposing a time limit on a witness for reading all or part of their statement. ELA hopes the large number of positive suggestions made for reform will be considered fully by those with the unenviable task of running employment tribunals in these difficult times. Joanne Owers is chair of the Employment Lawyers Association and chair of the ELA Working Party on Employment Tribunals
Last week’s High Court judgment that the Legal Services Commission’s family tender process was unlawful railroaded a process which would have reduced the number of family providers from 2,400 to 1,300 and led to the demise of many experienced firms.The ruling is undoubtedly a notable victory for the Law Society, but the big question for legal aid firms is: What happens now? The first thing to consider is whether the LSC will appeal. It would seem inconceivable that that the commission would seek to waste more public money. It has already squandered an undisclosed sum running an ‘unlawful’ tender exercise, then shelled out hundreds of thousands of pounds unsuccessfully contesting the Law Society’s challenge. But might the prospect of having to pay compensation to those which were awarded contracts – and who may now suffer financial detriment through their withdrawal – make it more likely that the LSC will appeal? If the LSC appeals and wins, that may not be the end of the matter, as those firms that have discontinued judicial review actions on discrete points in light of the Divisional Court’s ruling may re-issue those proceedings. If the LSC does not seek to appeal, there will need to be a fresh tendering exercise, presumably preceded by a fresh consultation and impact assessment, all of which will take time. All this uncertainty is set against a background of the spectre of deep legal aid cuts following the government’s spending review – with cuts likely to be made in the funding of private law family work. As Lord Justice Moses pointed out after giving judgment, the LSC’s best course of action would be sort the new contracts once the scale of the legal aid cuts and new fee regimes are known; rather than re-tender, only for those contracts to be terminated early to implement the changes. The Law Society’s view is similar – the LSC should extend the existing family contracts until April 2012, await the outcome of the spending review and re-tender on the basis of where legal aid funding stands at that time. Looking ahead though, one has to ask whether this challenge and re-tendering is worth the hassle, when the end result could be the same outcome achieved by the flawed tender process – ie a massive reduction in the number of family suppliers. Despite repeated assurances from the LSC that the family tender was not designed to reduce the number of providers, is that really the direction of travel in which it and the government is seeking to go? One only has to look at the plans for the delivery of criminal legal aid services to see it is probably not. Before the election, the then legal aid minister Lord Bach announced proposals to reduce the number of criminal providers by 75%. The coalition government has not dissented from this proposal. Would it not therefore seem likely that the government and the LSC seek to run both the criminal defence service and the community legal service in the same way? If the government believes that it can save money in the provision of criminal legal aid by contracting with fewer larger firms, it must surely have come to the same conclusion in relation to the delivery of other services. Visit the Gazette’s blogs page for more news blogs
The government will ‘hold firm’ on the age of criminal responsibility despite the findings of a recent critical parliamentary report on the matter, the House of Lords heard yesterday. Francis Hare, the Earl of Listowel, questioned justice minister Lord McNally over the All-Party Parliamentary Group for Children’s report on youth justice, which recommended that the age of criminal responsibility, currently 10 years, should be reviewed. Hare, a cross-bencher and member of the group, told the Lords that the age of criminal responsibility in the UK is two years below the minimum age of 12 recommended by the committee on the UN Convention on the Rights of the Child. He said that ‘the journey of many of the 10- to 13-year-olds entering the criminal justice system begins with alcoholic parents, continues with a disruptive mix of foster care, children’s homes and different schools, and concludes with entry into the criminal justice system’. McNally said: ‘We hold firm that, although the age of criminal responsibility is 10 years, the thrust of the policy when children come into the care of the authorities is not to feed them into the criminal justice system but to apply as vigorously and holistically as possible responses to their needs to try to avoid them reoffending. ‘The factors that lead young people to offend are complex and can often include the circumstances that the noble Earl mentioned. That is why children who offend are referred to local multi-agency youth offending teams, which take a holistic approach to tackling the causes of offending, including housing, education, health and parenting issues.’ He added: ‘The difference in costs between putting young people into custody and finding alternative treatments is out of all proportion: it is tenfold. Therefore, there are both financial and practical attractions in this. For example, the pilots on intensive fostering, which were started by the previous administration, are well worth studying and are very encouraging. The cost of intensive fostering is about a tenth of that of keeping a young person in youth custody. ‘We are trying to make a system that diverts young people from criminal activity, while understanding that the activities of young people can be disruptive and frightening to the general population.’
Nick Kehoe is a former television and newspaper journalist. He is now managing director at law marketing firm Media Coverage. I don’t suppose too many lawyers will be mourning the demise of the News of the World. It was often the scourge of the legal profession and the much maligned ‘no win, no fee’ arrangements which, heaven forbid, gave the less well-off a chance of getting some justice. How ironic then to think that it was lawyers and that same ‘no win, no fee’ system that brought the News of the World crumbling down. Far fetched? Not really. Rupert Murdoch may have fired the shot that put the NoW out of its misery but it was lawyers and ‘no win, no fee’ that loaded the gun. At least, that is the claim of Mark Lewis, the lawyer who first uncovered phone hacking and who has since represented several victims, including the family of murdered schoolgirl Milly Dowler. Mr Lewis told the Guardian this week that if it weren’t for ‘no win, no fee’ arrangements, the News of the World would still be on the news stands every Sunday. And I think he has a point. After all, the public and the politicians didn’t take phone hacking too seriously when it only seemed to involve the rich and famous such as actors and sportsmen. It was only when stories came out that phone hacking had spread to victims of crime that the alarm bells really started to ring. When it was revealed that the phones of Milly Dowler and victims of the London bombings may have been hacked, it led to a wave of revulsion that even the Murdoch empire could not withstand. The point Mr Lewis makes is that many of those families did not have the resources to take legal action against the NoW. Without no win, no fee they would never have been able to take on such a powerful newspaper and bring it to account. As a result we may never have learnt the grotesque extent of the scandal and the NoW might have been able to ride out the storm. Mr Lewis has represented more than 50 people pursuing phone hacking claims so he speaks with some authority. He told the Guardian: ‘Many papers, including the Sun and the News of the World, have been having a go at “greedy lawyers”, saying they want to get rid of ‘no win, no fee’ agreements. Their agenda has been to get rid of them. But the real issue is about access to justice.’ It certainly is about access to justice. Just imagine if all this had happened after ‘no win, no fee’ had been abolished or watered down to the point where it was ineffective. The less well off could not have afforded to take action. And consider this. The News of the World paid the legal fees of one of its employees who was convicted of phone hacking. It all seems so strange so let me see if I’ve got this right. We are planning to remove a system that allows innocent people to protect themselves but leave in place a system that allows a powerful company to fund the defence of the guilty. What are we trying to do? Return to Victorian times? I’m not a lawyer and I’m not involved in any campaign in support of ‘no win, no fee’ arrangements, but if I were, I would want to make the most of this story. The government is on the ropes over this and it does listen to public opinion. When Kenneth Clarke made a careless off the cuff remark in a radio interview suggesting that some rapes were less serious than others, all hell broke loose. He only just managed to cling on to his job as justice secretary and his plans to save money by giving some criminals shorter sentences was unceremoniously dumped. I’m not saying the same thing would necessarily happen over this issue, but you never know. For too long the tabloid press has trotted out the tired old clichés about compensation culture, but now the world has changed. All newspapers have been tarnished by the phone-hacking scandal and they’re not so cocky any more. It will be a long time before they wield the same power over politicians and so the debate can change focus. Lawyers and the organisations that represent them should recognise this and make sure that change of focus takes place. Kenneth Clarke should be bombarded with questions about why he wants to destroy a system that helped to expose the sickening corruption at the News of the World. I don’t think he would like that question and I suspect he would struggle to provide a convincing answer.
US dispute financier Burford Capital is to acquire UK legal expenses insurer Firstassist in a £10.3m deal to create a firm offering both after-the-event (ATE) insurance and litigation funding. Burford is one of the world’s leading financiers of litigation and arbitration and listed on the London Alternative Investment Market. It was attracted to the UK market by the Jackson proposals for litigation funding. In a statement to investors, the company said the acquisition of Firstassist ‘is attractively priced and structured at a multiple that reflects the uncertainty associated with the Jackson reforms on the ATE business’. It said: ‘Through it, Burford gains the services and brand of a leading team to launch an aggressive push into third-party funding as an adjunct to, and hedge for, the ATE business. ‘The acquisition is expected to be significantly earnings-enhancing in 2012 and to produce the leading UK provider of litigation capital and insurance solutions.’ Firstassist, which has been providing ATE insurance on the UK market for more than 15 years, will continue to have its underwriting capacity provided by Great Lakes Reinsurance, a subsidiary of Munich Re. Peter Smith, managing director of Firstassist, said he expects demand to increase for third-party funding in the coming years. He added: ‘We will look to capitalise on our existing track record, wide network of relationships and transferable risk assessment skills to create a one-stop shop for litigation funding and insurance, offering significant benefits to solicitors and their clients.’ The deal, which will see Burford chairman Sir Peter Middleton become the chairman of Firstassist, is subject to FSA approval. Burford’s share price rose 3% on the news.
The Solicitors Regulation Authority is to consult on whether to continue to set minimum pay rates for trainees. Current minimum salary levels for solicitors are £18,590 in central London and £16,650 outside, and have been frozen for the past two years. However the SRA board decided at its meeting today to revisit the whole issue. The wage policy, which dates back to 1982, was designed to protect trainees from being exploited and encourage a high calibre of graduates to the profession. But there is no remit in the Legal Services Act for the SRA to set minimum wage levels and the consultation will ask whether this policy should now be dropped. The SRA’s executive director Samantha Barrass said: ‘We do not regulate prices, including rate of pay, in any other area of our work. ‘We have compared the practice with other professional regulators and found very few examples where this occurs. It would appear that setting a minimum salary does not address any identified risk to the public interest or the rule of law, nor is it clear that it improves access to the profession.’ The board will spend the next four months consulting with the profession and holding focus groups with stakeholders before considering any changes. A decision on whether to remove the minimum salary requirement is likely to be made at the SRA board meeting on 16 May. The consultation paper can be viewed and downloaded at the website from this Friday.
This concerned the proposed reduction on 1 April 2012 of the solar PV installation tariff rate, which became eligible for payment on or after 12 December 2011. The tariff rate is fixed by reference to the year in which the installation becomes eligible (at the time of the appeal, 1 April 2011 to 31 March 2012). However, the proposal was to vary and reduce that rate at the end of the current year, not merely concerning those installations becoming eligible after the modifications come into effect, but also for those becoming eligible in the relevant period before the modifications are brought into effect. The respondents were concerned that the secretary of state was asserting a power to modify what they believed to have been an established system which fixed the rate of return for the generating life of the installation (subject to a maximum period of 25 years). The proceedings concerned those who have installed or who were contemplating installing solar PVs between 12 December 2011 and 1 April 2012. As indicated, on 21 December 2011, Mitting J found that the secretary of state’s proposals were unlawful and that any new ‘reference date’ could lawfully take effect only from a date on or after the proposed modifications came into effect. The nub of the issue before the Court of Appeal was that while the respondents argued that from the time a solar PV installation becomes eligible, the generator is assured of a fixed rate of return – subject to retail prices index (RPI) adjustments – the secretary of state contended for a power to vary tariffs at such a rate as the secretary of state from time to time introduces. Moses LJ explained that, while the electricity supply companies pay the FIT to generators of small-scale low-carbon electricity accredited by the Gas and Electricity Markets Authority (the authority), the cost of the FIT is passed on to all electricity consumers. It triggers raised prices and is therefore effectively a subsidy paid by consumers. The subsidy is controlled by HM Treasury and the FIT scheme consequently has a budget. The authority is able to grant an electricity supply licence under the Electricity Act 1989 and such licences contain statutory standard conditions. Section 41 of the Energy Act 2008 allows the secretary of state to modify those standard conditions for (among other things) establishing arrangements for a scheme of financial incentives to encourage small-scale low-carbon electricity generation. Section 41(3) of the 2008 act specifies what can be included in such modifications. The FIT scheme relies upon a combination of delegated legislation and modification to the standard conditions. As Moses LJ pointed out: ‘The Feed-in Tariffs (Specified Maximum Capacity and Functions) Order 2010 (SI 2010 No. 678) and the standard conditions are symbiotic.’ Government plans to amend the Feed-In Tariff (FIT) scheme were torpedoed again on 25 January, this time by the Court of Appeal. The scheme had already taken a first instance hit before Christmas with the judgment of Mitting J. However, following the Court of Appeal’s judgment, and while former energy and climate change secretary Chris Huhne had apparently indicated his intention to seek permission to appeal to the ultimate UK ‘solar panel’ (aka the Supreme Court), the proposed modification to the FIT scheme has been struck down. Lead judgment in the Court of Appeal was given by Moses LJ with Richards LJ and Lloyd LJ expressing one-line agreement (Secretary of State for Energy and Climate Change v Friends of the Earth and Others  EWCA Civ 28). The case is interesting, not just for its substantive application to the FIT scheme, but also for what it says about retroactive and retrospective legislative measures. The FIT scheme was introduced in April 2010 to enable electricity supply companies to make payments to small-scale producers of low-carbon electricity using biomass, wind or solar photovoltaic (solar PV) generation. However, although the public adoption of solar PV had been unexpectedly successful, the costs of installing solar PV systems had fallen substantially. The secretary of state was therefore concerned that solar PV generators would be over-compensated by the existing payment structure which threatened the affordability of the scheme. Decision Back to the future? Detailed consideration of the underlying statutory material is beyond the scope of this article. However, after analysing the law, Standard Condition 33 and its annexes in some detail, Moses LJ noted (among other things) that the FIT rate is fixed by reference to the year in which a specified installation became eligible for payment, and there was no reference either within the order or schedule A to Standard Condition 33 to any adjustment of the fixed rate other than in accordance with the fluctuations of RPI. In his lordship’s view, the ‘scheme provides for a predetermined rate, not such rate as from time to time may be determined’. The concept of a payment rate fixed during the period of generation by reference to the date the installation became eligible for payment was in his view ‘fundamental to the scheme’. This ‘provides an assurance as to the rate of return to an owner who has paid a capital sum prior to the installation coming into operation, subject to an adjustment in accordance with RPI’. He therefore concluded that the delegated legislation proposed would have retrospective effect in respect of any installation becoming eligible for payment prior to the modification coming into effect. Such legislation would be valid only if the empowering provision in section 41 of the 2008 act authorises such an effect. And, just as ‘there is a presumption against retrospective operation in the construction of statutes, so there is a presumption in relation to the construction of a statute delegating legislative powers.’ And ‘absent a clear provision conferring power to make retrospective delegated legislation, the assumption of such a power offends the legality principle’. Moses LJ noted that Lord Nicholls in Wilson v First County Trust Ltd (No. 2)  1 AC 816 had adopted the principle expressed by Staughton LJ in Secretary of State for Social Security v Tunnicliffe  2 All ER 712 at 724: ‘The true principle is that parliament is presumed not to have intended to alter the law applicable to past events and transactions in a manner which is unfair to those concerned in them, unless a contrary intention appears… it may well be a matter of degree – the greater the unfairness, the more it is to be expected that parliament will make it clear if that is intended.’ Lord Rodger had then noted that, while retroactive changes alter the law in relation to past events, retrospective changes amend existing rights but only in relation to the future. The presumption against altering vested rights in the future is weaker than in relation to retroactive change. Moses LJ noted that, although weaker, there does remain a presumption against the alteration of existing ‘vested rights’, that is ‘those rights which, once acquired, fairness demands should not be altered’. The secretary of state contended that there was no unfairness since anyone seeking to install a solar PV after 12 December 2011 would be warned and could expect a reduced rate of return as of 1 April 2012. However, Moses LJ took the view that the effect of this warning cannot alter the nature of the section 41 powers. Either that measure ‘confers a power retrospectively to alter fixed rates of return or it does not’. He considered that the warning ‘cannot enlarge the power conferred by section 41’. For ‘either there is statutory authority or there is not. The warning makes no difference’. The appeal The Court of Appeal noted that there is plainly power by modification of the original modification to vary fixed rates for installations becoming eligible only after any modification comes into effect. However, the court concluded that there was no power in section 41 to introduce a modification reducing a rate fixed by reference to an installation becoming eligible before the modification. To do so ‘would be to take away an existing entitlement without statutory authority’. The court therefore found that the secretary of state ‘plainly’ has no power to do what he did. Nevertheless, as mentioned, the case is apparently now on its way to the Supreme Court where this complex mix of statute, conditions and common law will be subject to detailed scrutiny from the country’s most rarefied judicial brains. But while Chris Huhne now has legal problems of his own, his successor Ed Davey will have to wait and see whether any judicial sun eventually comes out to shine on the government’s submissions. Dr Nicholas Dobson is a senior consultant with Pannone specialising in local and public law. He is also communications officer for the Association of Council Secretaries and Solicitors
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