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SNP Executive decides new look into limited legal services reforms as legal profession and judiciary lobby against change

05 Oct

 Such is the nature of the legal profession, hellbent on protecting itself from any chance of reform at all, an ex-judge, who is widely known to be quite vocal against any changes in the way the Judiciary & legal profession do their centuries old business, has warned SNP Justice Minister Kenny MacAskill in an ‘open letter’ printed in the Scotsman, that he and the new administration are certainly being kept an eye on.

A quote from Lord McCluskey’s ‘open letter’ in the Scotsman newspaper to Justice Minister MacAskill :

“For us, the truth is different. But, despite your title, the true content of your ministerial portfolio is not “justice” at all.

You cannot provide, or even administer, justice. Society has entrusted judges with that responsibility. Their job is to try to ascertain the facts and apply the law impartially. They must act separately from the political power and apply the law impartially: that is the principal feature of the rule of law. You, as an experienced lawyer, understand that well.

While Lord McClusky, now a peer in the House of Lords may be slightly correct on that one, the Courts haven’t been giving that much justice to people at all – indeed, the Judiciary, who control the Courts have sided with their colleagues in the legal profession many times, restricting even the availability of access to justice, ultimately deciding who would get into Court and who would not.

In a recent FOI disclosure for instance, it was revealed that former Lord Advocate Lord Hardie, now a serving Judge, blocked the implementation of Sections 25-29 of the Law Reform (Misc Provisions) Act 1990, which would have opened up the legal services market many years ago .. and I covered that revelation here :

Former Lord Advocate Andrew Hardie revealed as major obstacle in removing lawyer-advocate monopoly on legal representation

However, Lord Hardie went one further … he recommended repeal of those sections of Law allowing more widely available access to justice .. because of course, the legal profession are completely against opening up their business monopoly to allow anyone access to legal services .. as of course, that would mean that anyone could get access to the Courts – and the legal profession would be powerless to stop it.

The Clementi reforms to legal services, however, are not going to be implemented in Scotland – instead, a “version” of the Clementi reforms, known generally as “Tesco Law” may make it to the books – but that begs the question, if there is a wider choice of access to justice & legal services in England & Wales, why leave Scotland trailing behind ? Is that perhaps just to satisfy the likes of the Law Society of Scotland and their members who want to protect their business market monopoly on legal services ?

A quote from Justice Minister Kenny MacAskill in the Herald article on this subject today :

MacAskill, who was confirmed as cabinet secretary for justice on May 17, again said that the new government will draw the line at introducing Tesco Law.

 He told The Herald: “There’s probably an opportunity for a middle way that is not Tesco Law and which preserves the integrity of the profession and avoids high street law firms being decimated, but which allows the larger firms to raise outside capital to pursue their global ambitions.”

Well, while it’s good the new Justice Minister recognises there is a need for reform to legal services, it would be much better to follow the full thrust of the Clementi reforms in England & Wales – certainly anyone who has experience of using Scottish solicitors would probably agree on that one, many consumer organisations also agree, and recently the Which? consumer association filed a “super complaint” with the OFT on these issues of restricted legal markets & poor regulation in Scotland .. .so if the OFT investigate and find there is indeed restriction on legal services & access to justice in Scotland – what will the SNP Executive do ? keep on plugging away with protecting solicitors business markets at the expense of access to justice ? or allow Scotland the same reforms the rest of the UK enjoy ?

I covered the issue of Which? calling on the OFT to look into access to legal services in Scotland here : Consumers call for OFT Inquiry to investigate restriction of legal services in Scotland

The Law Society of Scotland, predictably, objected to such an inquiry, and have been lobbying fiercely since it’s announcement, whispering in the ears of Scottish politicians not to let the London based OFT get their way and be able to look into Scottish issues …

I covered the Law Society’s objection to the Which? “super complaint” here : Law Society of Scotland reject Which? ‘interference’ & “super complaint” to OFT against lawyers monopoly on access to justice

Perhaps, it may also even be open to someone to take a case to the Courts on grounds of Article 6 of ECHR, that lack of implementation of such legal reforms is prejudicial & discriminatory, and prevents fairness in Scots Law compared to the rest of the UK ? .. but then again, someone may have to find a lawyer to take such a case on in the current monopoly on legal services enjoyed by the legal profession – and would the Law Society of Scotland allow any lawyer to take on such a case ? and even if a lawyer could be found, could they even be trusted to pursue such a legal challenge to their own business model & way of life ? I doubt it …

Despite being given a tap on the shoulder today by an ex-Judge, Mr MacAskill, please give us the access to justice which the rest of the country enjoys, and don’t keep the Scottish people further in the dark just because the legal profession wants it so they can protect their monopolistic business model, ensuring they alone can decide who gets access to justice & access to the courts.

Following articles from the Scotsman and Herald newspapers.

http://thescotsman.scotsman.com/scotland.cfm?id=825972007

An open letter to the new justice minister

LORD McCLUSKY

ALLOW me to congratulate you on your appointment: it can be a bed of nails or roses – it depends on how you lie.

 May I be bold and offer you a word of advice, beginning with a story? The late John Smith often used humour to make a serious point. As the Soviet Union was approaching final collapse, he told of a young member of the Politburo of the Czechoslovak Soviet Republic who, attending his first meeting, listened silently while the old apparatchiks droned interminably on. Finally, the general secretary turned to him: “Comrade, would you like to say something at this, your first opportunity to contribute to the governance of our great Soviet Republic?”

 “Yes,” he replied eagerly, “I propose that we create a ministry of marine resources.”

 “But,” the chairman replied, “Czechoslovakia is land-locked; we have no marine resources.”

 “So what?” responded the young man. “We’ve got a ministry of justice.”

 The story reflects a truth that is being lost as memories of Soviet rule fade: the so-called ministries of justice of the Soviet republics had little to do with justice and everything to do with using legal processes to suppress dissent and bury inconvenient truths.

 For us, the truth is different. But, despite your title, the true content of your ministerial portfolio is not “justice” at all.

 You cannot provide, or even administer, justice. Society has entrusted judges with that responsibility. Their job is to try to ascertain the facts and apply the law impartially. They must act separately from the political power and apply the law impartially: that is the principal feature of the rule of law. You, as an experienced lawyer, understand that well.

 So your job is different: it is to supervise the machinery of justice, to set the framework. That does not just mean the “pay and rations” – making sure there are enough judges, courts, clerks, to enable the administration of justice to proceed as smoothly as possible.

 It also means you must consider what measures, if any, are appropriate to lay before parliament to give effect to the considered and educated views of the public on such matters as sentencing, legal aid, rules of evidence, detention before trial and prisons. If you persuade parliament that change is necessary, then parliament enacts the law and the judges apply it, whether they like it or not.

 You hardly need me to remind you of this. Yet there is a seemingly irresistible temptation for ministers to try to “do something”, to make a mark, to fashion a so-called reform that will be a lasting monument to the wisdom and perspicacity of its progenitor, and provide a line for the inevitable obituary.

 Forget it. Remember Diogenes. He was the wise man who, needing little and wanting less, lived in a barrel, enjoying the sun. Men came from far and wide to seek his advice. One day Alexander the Great himself arrived. Standing over the tub, he asked: “What can I do for you?”

 Diogenes replied: “Just stand to the side, you’re keeping the sunshine from me.”

 The lesson is sometimes the best thing is to have the humility not to interfere. For a minister of justice coming to office in Scotland, it is essential to remember our system has taken its shape on the anvil of experience. It is wiser than any of those who fashioned it.

 Even for you, a lawyer, the temptation to change is powerful. Your will to resist that temptation may be undermined by your inheriting a civil service machine that has hitherto shown little grasp of what make the Scottish system uniquely valuable. The previous administration, with a mix of arrogance and prejudgement, turned its back both on the history of how our system developed and on the massive studies that reassessed our legal institutions.

It produced so-called consultation papers and ignored responses challenging the superficial thinking that lay behind their proposals.

 You are free to think for yourself. Please start again, remembering the history of our courts. You have plenty of time. Study the 20th-century history of their reform. Don’t lay yourself open to the charge of arrogance, the charge that you imagine you know better than the historical process that gave us one of the world’s finest legal systems.

 You don’t have to do anything. Emulate the bon vivant Lord Justice-Clerk Aitchison, who, when asked by his macer how he would respond to a newspaper’s description of him as “the well-known Sottish judge”, replied: “I shall just sit tight.”

 I keep using the word “arrogance”. So is this a case of an old pot warning a new kettle not to turn black? Of course it is! But this old pot has little power and no responsibility. You have both. We look forward to your exercising it with wisdom.

and now the article from the Herald on the new SNP Executive taking a look at legal services reform – although reform seems to be not for us as the rest of the UK enjoys …

http://www.theherald.co.uk/business/law/display.var.1429413.0.0.php

SNP victory ushers in new look at legal services market reform
IAN FRASER May 28 2007

Justice Minister Kenny MacAskill has said that the new Scottish Executive is prepared to implement a version of the Clementi reforms that would remove ownership restrictions on law firms.

His comments come as an Australian law firm last week pioneered a potential new funding avenue for solicitors when it became the first to float its shares on the stock market.

In England and Wales, the Clementi report has looked at how best to reform the legal services market – including the way in which law firms raise capital. Its findings are due to be enacted through the Legal Services Bill in December 2007.

The reforms will benefit larger England-based law firms by enabling them to raise external capital to fund their expansion or systems development, as well as making it possible for their partners to benefit financially from the goodwill wrapped up in their businesses.

However, the reforms were not on the agenda in Scotland until the SNP’s recent election victory.

While “Tesco Law” – the part of the Clementi package which allows businesses such as banks, supermarkets and insurers to have lawyers on their payrolls and provide commoditised legal services to their customers – is not on the agenda in Scotland, MacAskill said he does not believe Scottish-based firms which may require capital to fund expansion should be discriminated against.

MacAskill, who was confirmed as cabinet secretary for justice on May 17, again said that the new government will draw the line at introducing Tesco Law.

He told The Herald: “There’s probably an opportunity for a middle way that is not Tesco Law and which preserves the integrity of the profession and avoids high street law firms being decimated, but which allows the larger firms to raise outside capital to pursue their global ambitions.”

‘Individual teams may be encouraged to form their own company’

MacAskill was speaking following the flotation of the Australian law firm Slater & Gordon, which made history last week by becoming the first law firm anywhere to list its shares on a stock market.

Taking advantage of changes to Australian legislation, the class action specialist listed on the Australian Stock Exchange on May 21. Its shares surged by 40% on day one, valuing the firm at A$150m (£62m).

It is a move that could offer a template for UK firms seeking to raise much-needed capital.

Accountant Deloitte said Slater & Gordon’s initial public offering is likely to trigger many more.

Jeremy Black, a director in Deloitte’s professional practices group, predicts that several mid-tier law firms in the UK will seek to float on the Alternative Investment Market.

He said: “If you look for precedents, we have seen accountants, management consultants, patent attorneys, architects and chartered surveyors float. I see no reason why law firms are so different from these organisations. AIM is the more likely market, as a firm would need a market capitalisation of around £200m to list on the full market.”

However, Black warned that Scottish firms look likely to lose out, despite MacAskill’s remarks.

He said: “It sounds to me that law firms in Scotland are going to be denied that choice, which could to some extent be considered a disadvantage.”

Black admitted that the Clementi reforms represent a real threat to “high-volume, low-value lawyers” such as small high-street operators and sole practitioners. He says this is because supermarkets such as Tesco, banks such as HBOS, and insurers such as Aviva/Norwich Union are likely to eat into their territory, winning clients on the strength of their brands.

He said: “There is likely to be significant consolidation and aggressive competition from well-known brands. We expect to see the number of sole practices and small partnerships currently in existence decrease significantly. The UK high-street legal market will change beyond recognition.”

However, he believes that the Clementi reforms will also present opportunities for “low-volume, high-value lawyers” including the mid-tier firms such as McGrigors and Dundas & Wilson and Magic Circle firms such as Freshfields and Linklaters.

However, even here, the availability of external capital could also pose a threat. He said: “Individual teams may be encouraged to break away and form their own company with the backing of an external investor.”

Alistair Morris, chief executive of Pagan Osborne, accused MacAskill of “protectionism” in his desire to buck the market over Tesco law.

He said: “The horse has already bolted on Tesco law. Commoditisation is already happening, with organisations including Halifax offering legal panels for conveyancing work, to whom they dictate very tight terms.

“The future is already looking very bleak for the traditional high-street solicitor. Whether alternative business structures happen or not, the commoditisation of certain types of legal services is already under way.”

Morris believes that MacAskill ought to go further and usher in the full suite of Clementi-style reforms, which he believes would revolutionise the legal profession for the better.

“The law remains a cottage industry with an anachronistic culture, and it is ripe for consolidation. If law firms were permitted to raise equity from external investors, it would hasten that process.”

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Posted by on October 5, 2007 in Law

 

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