Justice for Scotland

Statement on behalf of solicitors who requisitioned a referendum on whether the Law Society of Scotland should continue to have the dual function of both regulating, and representing or promoting, Scotland's solicitors.

The Scottish Law Agents Society's motion opposing the external ownership of Scottish law firms ('Tesco Law' or ABS) has been approved at a Special General Meeting of the Law Society of Scotland (LSS) in Edinburgh this morning, reversing the pro-ABS policy of the LSS. A proposed 'ABS lite' amended motion by McGrigors was rejected by Scottish solicitors. 1,817 votes were cast against ABS, with 1,290 in favour.

The integrity and good reputation of the solicitor branch of Scotland's legal profession was safeguarded this morning when the reconvened Special General Meeting of the Law Society of Scotland (LSS) took place in Edinburgh.

The adjourned Special General Meeting of the Law Society of Scotland (LSS), which had been formally called by the LSS to meet this morning at the Sheraton Hotel, 1 Festival Square, Edinburgh at 10am, is due to take place.

Notwithstanding, the LSS had subsequently purported to postpone this meeting, it is now clear any decision to postpone was ultra vires of the constitution of LSS, and contrary to established applicable law.

The Scottish Law Agents Society have kindly re-booked a room at the Sheraton and all members of the LSS are encouraged to attend in order to vote on the motion with respect to Alternative Business Structures.

From: Ian S. Smart

As I paid my eagerly anticipated weekly visit to HM Prison Barlinnie the other day, and waited for those accused I was due to consult with being brought from their cells to the agents’ interview area, I couldn’t stop fretting about the ridiculous position in which this Law Society of ours has placed our great profession.

The first accused I was due to consult with was remanded in custody pending sentence on charges of breach of the peace and police assault, both committed whilst on bail. Never having been fined more than £1000 before, and never having previously served two years imprisonment, it occurred to me that this accused, my client, could in a year or so, be my business rival: a legal service provider. Incredible, but the Legal Services Bill, which the LSS has negotiated for our profession, contains nothing which will prevent such a situation arising. Nothing.

So, I thought, let me see. The next file for the next accused: domestic assault. Serving six months imprisonment, following upon last year’s convictions on indictment for domestic assault which resulted in an eighteen month sentence, following upon convictions in 2008 which resulted in the Sheriff imposing a probation order. This violent thug, too, could be my business rival this time next year: never done two years and never been fined more than £1000. Got the picture? Or will I go on? Well, I will a bit. Because when crime gets serious, you see, the heavies don’t do any time. Nor do they get fined. In fact, who are the heavies? I don’t think the Law Society knows. But that doesn’t matter. As long as the Law Society can regulate the new ABS businesses, and thereby stay in business itself, it’s fine.

In December last year, I wrote an article which, inter alia, highlighted that s.92 of the Legal Services Bill removed this profession’s independence and ceded it to the Government. The Government, under s92, had the power to set the criteria for the appointment of non-solicitor members to our representative Law Society Council. Significantly, s.92 also allowed the Government to set the proportion (without any limit) of non-solicitor members to Council. For months, on websites, in press releases and debates, the Law Society argued there was no problem with s.92. Indeed, at a meeting I attended with LSS office bearers, the LSS attempted to diffuse my concerns about s.92 by stating that they had a letter from the Cabinet Secretary stating that the proportion of non-solicitor members on the Council of the Law Society would always be set after consultation with the LSS.

A letter? From the Cabinet Secretary? Fine. No statutory safeguards? But a letter? Fine.

Well, not really. Because, the Cabinet Secretary might not be there forever. And what happens if another Government comes into power……

I think the LSS knew what I meant. Because in March, Fergus Ewing announced that s.92, or at least its Government control provisions, had gone. No more. Finito. The Law Society must have been embarrassed, you might think, having tried to reassure the profession that it was in control and nothing was wrong with s.92. Well, not exactly. The LSS was “delighted” at s.92 being removed. Go figure! Cos’ I can’t.

But I’ll try. You see, if the Government says “run”, the Law Society sprints; if the Government says “jump”, the Law Society leaps; if the Government says “the status quo is not an option, how is the Law Society going to survive post Tesco law?”, the Law Society says “if you look after us, we’ll deliver the profession’s independence to you”.

So there we are. Government control of our Council (formally removed, but ah hae ma doots) and external ownership of law firms. Smashin. Well done Law Society. As long as you’re ok.

And what has this hard working, decent, honest profession done to deserve losing its independence? Eh, nothing. Nothing at all. Well apart from allowing those with Government civil service agendas to penetrate and dominate our Council. And it’s still going on. Just ask SLAS. Or better still, see for yourself:

www.slas.co.uk/news_detail.php?newsID=724&slas=918ccb2bc091cdfda6d1b69d67a4bd4b

We’re paying for that. But for how much longer?

I read today among the Law Society’s “papers” dispatched to every member (10,500) that the “Glasgow Bar Association had requested a referendum on the nature and extent of the society’s role…”

The result of the Alternative Business Structures (ABS) referendum has reaffirmed that the Council of the Law Society of Scotland (LSS) has lost the support of its membership to unconditionally promote and support ABS.

The Herald’s report (6 and 7 April) that almost one third of specialist family lawyers in Scotland no longer undertake civil legal aid cases is disturbing. In many developing countries, legal aid is so poorly financed that even capital cases are defended by the most inexperienced and often incompetent of practitioners, with life and death consequences.

As Scotland’s proud legal system looks down a regressive road, we have a simple choice. Do we believe in the equality of arms between opponents as a matter of justice? Or should the quality of representation be based upon your personal wealth and who you happen to be?

If the former, then we must review our legal aid system and Robert Brown MSP’s call for an inquiry is to be welcomed. If the latter, we should embrace ‘Tesco Law’, and its drivers of choice based upon individual wealth and status. But what kind of Scotland would we create?

Aberdeen solicitor, Catriona Walker's response to Fergus Ewing MSP (published in The Herald today):

The Lawyer newspaper reports that Scotland's 'big four law firms' will defect to England if they don't get their way over 'Tesco Law': the story is reproduced below.

"The Scottish legal market is facing crisis, with an industry-wide argument over the introduction of alternative business ­structures (ABSs) having the potential to drive the big four firms south of the ­border for good.

Dundas & Wilson, Mclay Murray & Spens, McGrigors and Shepherd & Wedderburn (S&W) are considering having their lawyers register with the Solicitors Regulation Authority (SRA) rather than the Scottish Law Society in reaction to the Scottish Law Agents Society’s (SLAS) attempt to ban the introduction of ABSs.

While the firms would not physically leave their ­Scottish headquarters, they would shift to a model whereby the bulk of their lawyers would be regulated by the SRA, with those in Scotland practising as registered foreign lawyers. This would mean the Law ­Society of Scotland (LSS) would have a vastly reduced revenue, with practising certificate fees going to the English Law Society, while the master insurance policy used by the entire profession in Scotland may be rendered unviable.

Dundas managing partner Alan Campbell said: “If we feel that we’re trading at a disadvantage to our competitors and they’re pan-UK, then we’d need to look at every option to make sure we’re on a level playing field. If that involves being regulated by the SRA, that’s something we’d do.

His counterparts at the other big four firms agree. McGrigors managing ­partner Richard Masters said: “It’s unpalatable and not a position we’d want to find ourselves in, but if [ABSs] take off and we’re in a non-competitive position we’d have to consider it.

The LSS has been successful in lobbying the Scottish government to alter some parts of the draft Legal ­Services Bill, but there are concerns that it would lose its negotiating position if it was forced to oppose ABSs, which is what the SLAS wants. As it is a government bill that has been some years in the making, it is likely that the Scottish government would press ahead with enacting it without the support of the sector.

The big commercial firms are a big part of the Scottish economy and the government doesn’t want to hamper them,” said LSS president Ian Smart.

S&W chief executive Patrick Andrews added: “The profession is in a perilous position because it’s difficult to see how it can maintain credibility in its dialogue with the politicians. The risk is that [the politicians] will steam on and do what they want and the profession is left watching.”

Controversial new legislation to introduce so-called Tesco law to Scotland presents a real threat to consumer protection, according to one of the country’s most high-profile lawyers.

The Minister for Community Safety, Fergus Ewing MSP, has claimed that the Legal Services (Scotland) Bill ('the bill') would not jeopardise a strong, independent, Scottish legal system (Letters, The Herald, 3 April 2010). However, that claim must be wrong as a matter of logic.

The bill would open up ownership of Scottish legal services to a worldwide market of investors and corporations, with consumer protection consisting of a risk-based licensing approach. Accordingly, notwithstanding how good the bill's proposed regulatory scheme claims to be, the fact it extends ownership and control of Scotland's legal services to a global market (of both legitimate and illegitimate interests) must mean the bill presents a real threat to Scottish consumer protection.

That risk is compounded by two incontrovertible facts. Firstly, any risk based regulatory system - no matter how good - accepts an element of harm and failure, and invariably detects serious consumer detriment after damage has been done. Just think of the current payment protection insurance scandal, or the various misselling of products scandals. Do we really want this approach for legal redress and justice within Scotland?

Second, businesses and investors are seriously high risk compared to legal firms. It's a cultural thing. Risk taking is associated with higher financial returns, and even if you go bust, insolvency law encourages you to rise from the ashes as a pheonix: whereas if solicitors take risks, they end up struck off, with no re-birth. And rightly so. So conceptionally, this approach to legal services is wrong in principle - and we're not even talking about how weak and unworkable the bill's regulatory scheme is.

Tellingly, neither European countries, nor the USA, are embracing the Scottish Government's deregulation of legal services model. Around the world, governments are tightening up their regulatory systems, so why are we acting so regressively in Scotland? Critics say solicitors have a 'monopoly' in Scotland, but it's a monopoly in the same way DVLA controls who can drive a car. And it's not true, as anyone can set up a body to provide representation in the courts under the Law Reform (Miscellenous Provisions) (Scotland) Act 1990.

The truth is the Scottish Government's bill is based upon a deregulation or 'free for all' model from 2004. This was three years before the financial services meltdown from deregulation; an approach which has since been discredited and abandoned around the world. Yet Fergus Ewing and his colleagues clutch onto this flawed model because England did so in 2007?

Mike

Glasgow Bar Association response to the Law Society of Scotland's 'Proposals for Change' consultation document: Section 1 of the Solicitors (Scotland) Act 1980 states the "objects" of the Law Society of Scotland (the "LSS"). It is the view of the Glasgow Bar Association (the "GBA") that there is an irreconcilable conflict contained within s.1 of the Solicitors (Scotland) Act 1980 (the "Act"). That section legislates that it shall be "the object" of the Law Society of Scotland, inter alia, to "promote" the "interests of the solicitors' profession in Scotland" as well as "promoting the interests of the public in relation to that profession". It is impossible for the promotion of both interests to be mutually consistent, beneficial or indeed legitimate.

The Royal Bank of Scotland were fined £28.6 million by the OFT yesterday for disclosing confidential customer information and breaching competition law. Last year Aon Limited were fined £5.25 million by the FSA for failing to take reasonable care to establish and maintain effective systems and controls to counter the risks of bribery and corruption.

Solicitor advocates Frank Maguire and John McGovern, and solicitors Mike Dailly and Walter Semple, along with other colleagues, will stand for election to the Council of the Law Society in order to work for Justice for Scotland. Elections for the Sheriff Court District of Glasgow and Strathkelvin will take place in May 2010.

Mike said "It's time for change. It's time to reform our Law Society to better serve the people of Scotland and our profession. We need to refocus our legal services on Scotland’s communities and citizens. They deserve better. We must reform our Law Society as it has shown itself incapable of representing all of those trying to render a legal service in Scotland now and in the future".

Ian Smart Esq,
President, Law Society of Scotland,
30th March 2010.

Dear Sir/Madam

Justice for Scotland – No to ABS

We regard justice not as a product at the sole mercy of profit but as a crucial service that must be available for all our communities in Scotland. We hold dear the principles essential to the administration of justice in Scotland: independence, confidentiality, and avoiding conflicts of interest.

This is why we are asking all Scottish solicitors to cast a double No vote in the Law Society’s Referendum on Alternative Business Structures (ABS, or ‘Tesco Law’).

Not to do so would open up control of Scotland’s legal services to purely commercial organisations. No amount of regulations or regulators stopped the banks undermining our banking system. ABS will allow them to now ruin Scotland’s legal services.

Non-profitable areas will be abandoned to create public ‘advice deserts’ - supermarkets and other so called entities are geared solely by profit. No amount of regulation will stop legal services being used as a portal for money laundering and other similar activities: our legal services will be open to organised crime.

We need to refocus our legal services on Scotland’s communities and citizens. They deserve better. We need to send a message to the Scottish Government to think again.
We must reform our Law Society as it has shown itself incapable of representing all of those trying render a legal service in Scotland now and in the future.

We must seek to re-affirm, through any such reform, the principles crucial to the administration of justice. We must also ensure that the legal service is preserved and improved across the whole range of needs of the Scottish people and their communities.

Scotland’s solicitors have a chance to re-affirm these ideals if they cast a double No vote in the Law Society of Scotland’s referendum.

Yours faithfully

FRANK MAGUIRE, Senior Partner and Solicitor Advocate, Thompsons Solicitors
JOHN McGOVERN, Solicitor Advocate, President of the Glasgow Bar Association
WALTER SEMPLE, Solicitor, Member of the Council of the Law Society of Scotland
MIKE DAILLY, Principal Solicitor, Govan Law Centre
PATRICK McGUIRE, Solicitor Advocate and Partner, Thompsons Solicitors