Scottish Government’s Legal Services Bill ‘must do more’ to break Law Society’s grip on legal marketplace & give public wider choice over access to justice

04 Sep

ScottishGovernmentScottish Government announces Legal Services Bill but will it actually help consumers ? Scotland’s closed shop legal services market is about to undergo a significant change from its centuries old format of monopolistic domination on the Scots public’s access to justice, as the Scottish Governments “Legal Services Bill”, designed to open up competition in the Scottish legal services market and give consumers more choice over who represents their legal interests, arrives at Holyrood later this month.

However, the long awaited legislation, which the Scottish Government claims, will “allow Scotland’s legal profession to grow and compete, by removing outdated restrictions on business models while protecting the core values of the profession” seems to avoid a total restructuring and opening up of the legal services marketplace which many consumer organisations and law reformers have been campaigning for many years to achieve. There are more detailed announcements expected on the Legal Services Bill as it is introduced in Parliament, but critics of the proposals announced so far cite there is little mention of actual advantages in the legislation for fee paying consumers of legal services in Scotland and claim the bill itself is more about maintaining the monopolistic structure of Scotland’s closed shop legal services market rather than opening it up to true competition.

Proposals announced by the Scottish Government include :

1. Allowing solicitors to secure external investment and business expertise and to combine with other professionals to offer legal services in new ways.

2. Remove restrictions on solicitors entering into business relationships with non-solicitors.

3. Allowing our leading commercial law firms to compete effectively with other UK firms and internationally.

4. Creating a robust regulatory framework in which the Scottish Government will appoint approved regulators who will regulate the new business structures

A spokesman for one of Scotland’s consumer organisations said this morning : “The Scottish Government need to get the balance right between expanding competition in the legal services sector and addressing the historical issues of poor regulation of legal services in Scotland.

He continued : “We look forward to the bill’s passage in the Scottish Parliament and the chance to add our views to the proposals contained in the bill. Hopefully the public will do likewise and add their experiences by way of submissions to the parliament, adding weight to the need of greater consumer protection in the legal services market.”

There is evidence the Scottish Government do seem intent on making at least some changes to the way in which lawyers do business in Scotland, however there still seems to be too much focus on maintaining the present regulatory framework exclusively operated by the Law Society of Scotland which many people who have come into contact with, now regard with some justification as being completely corrupt and therefore ripe for change in this forthcoming piece of legislation.

Ian Smart Law Society PresidentLaw Society President Ian Smart was quick to remind us all the Society stands for as little change as possible and no changes to its role as self regulator of Scottish solicitors. The Law Society of Scotland were quick to jump on the bandwagon to maintain their influence over the Scottish Government’s proposals, with Ian Smart, their President issuing the following release : “We will, on behalf of our membership, continue to engage with the Scottish Government and MSPs as the Bill progresses to ensure that those who might choose to provide legal services under an alternative business structure can be properly regulated and that robust consumer protections are put in place.”

Ian Smart continued : “The Society is in favour of allowing alternative business structures which will encourage innovation within the legal services market and also present our members with the opportunity to adopt new practices which will allow their businesses to flourish both at home as well as elsewhere in the UK and overseas. However it’s vitally important that proper consideration is given to access to justice issues. Ensuring access to legal advice and maintaining high standards among those delivering legal services are paramount.”

Law Society of ScotlandLaw Society of Scotland is more of a danger to competition and free public choice of legal representation. There is little doubt from Mr Smart’s statement, the Law Society of Scotland wishes to continue as the legal profession’s dominant and singular self regulator, which it has been constantly lobbying Government and Holyrood to ensure its position as such remains. However, as the huge levels of very serious complaints against member law firms and solicitors show, the Law Society of Scotland has never been up to the job of regulating the legal profession’s interests and protecting the public at the same time and the opportunity should now be taken to break up the Law Society’s regulatory role from its representation of the profession at large – if the public are to be given the regulatory safeguards that consumers of many other services already have.

MacAskill tight lippedJustice Secretary MacAskill seen as too close to Scotland’s legal profession to give public better choice over access to justice reforms. A significant problem for consumers of legal services in Scotland and those promoting wider competition and better independent regulation is that Justice Secretary Kenny MacAskill has invariably sided in the past with the Law Society of Scotland who wish to retain control over the public’s choice of their legal representatives.

Is Justice Secretary MacAskill impartial enough to give consumers protection from poor legal services ?

I have written earlier reports on the preliminary proposals contained in the Legal Services bill (referred to earlier as the Legal Profession Bill), here : Lawyers monopoly on legal services set to last until 2011 as MacAskill’s ‘dithering consultation’ delays wider access to justice for Scots and here : Legal Profession bill has little potential for change as Justice Secretary indicates no will to reform legal services

While the Justice Secretary might argue that “A strong and independent legal profession is part of the institutional framework of a modern democracy. The legal profession contributes to the Scottish economy with an estimated turnover of over £1 billion per annum.” the fact is that both of his claims are at odds with what should be an individual’s right to choose their own lawyer, rather than have a lawyer forced on them by a ‘strong and independent and self regulated legal profession’ – which is what we currently have in Scotland.

Why for instance, does the legal profession’s perceived right to require to make huge profits from controlling the public’s access to justice, access to the courts and access to legal services come into play against giving the public that right of choice we all enjoy in most other things we pay for ? The answer is of course, it should not … but as we have seen before, Mr MacAskill (himself a solicitor) appears not to be impartial enough from the legal profession to free the public from being handcuffed to the Law Society and its poor regulation of legal services in Scotland which has in turn led to very poor standards and widespread corruption against clients by ‘rogue lawyers’.

Neelie KroesEU Competition Commissioner Neelie Kroes welcomes competition in legal services. A spokesman for the European Union Competition Commissioner Neelie Kroes said today : “In general the Commission is in favour of competition in the area of professional services, including lawyers.” The Commission also issued a report on the subject in 2005, which can be viewed here : Professional Services – Scope for more reformFollow-up to the Report on Competition in Professional Services

The 2005 report on competition in the legal services sector concluded that “More urgency by the majority of Member States to bring about systematic pro-competitive reform in this sector would bring about significant economic and consumer benefits. In practical terms, this means Member States taking ‘political ownership’ of this work at national level to drive forward the reform process.”

Given the EU’s conclusion in this regard, there should be more focus on benefits to the consumer in the Legal Services Bill, rather than simply trying to maintain the status quo and basically, window dress so that some changes benefitting legal firms can take place, and old powerful regulators maintain their long standing but ill deserved positions of power, whereas free public choice over legal representation seemingly remains elusive once again.

The EU’s 2005 report did however recognise the problem of powerful regulators maintaining closed shop models, just as the Law Society of Scotland has done for years, concluding that : “The weight of tradition should not be underestimated as affecting the pace of change, and in many countries regulators fail to see how things can be done differently. Moreover, the professions themselves have in general not been actively promoting it. The current picture could also indicate that some countries have relatively weak regulatory oversight of the professions. This could be caused by the economic phenomenon of regulatory capture which is not uncommon especially in areas subject to self-regulation.”

Regulatory capture, referred to in the EU report, defines as a term used to refer to situations in which a regulatory agency (such as the Law Society of Scotland) created to act in the public interest instead acts in favour of the commercial or special interests that dominate in the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can act as an encouragement for large firms to produce negative externalities.

There is little doubt that consumers in Scotland have for far too long been subject to the Law Society of Scotland’s regulatory capture of access to justice and legal services, which must now be put to bed in the coming Legal Services Bill and the public given their own choice and say over who they wish to use (and pay for) to represent their legal interests.


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