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ROGUE FEE: Legal regulator SLCC reveals rogue solicitors compensation data, admits powers to nullify dodgy legal fees only used in two cases during 2013/14

17 Jan

Regulator admits sparse use of powers on legal fees. DOCUMENTS released under the Freedom of Information Act reveal the ‘independent’ regulator of legal services in Scotland – the Scottish Legal Complaints Commission (SLCC) is failing to use its powers to reduce legal fees to zero when presented with detailed complaints & evidence about rogue lawyers – even after the regulator eventually decides the lawyer is guilty of failing their client.

Among a raft of data on how compensation is paid by the legal profession to clients after complaints have been investigated, upheld, or mediated, the regulator was forced to admit it had used powers to nullify fees in only two cases in the past year which resulted in clients not having to pay their lawyer a penny.

In one case, the SLCC said fees were recorded as being reduced to nil at the “determination stage” – where the SLCC usually conclude a solicitor is guilty of a variety of offences including having providing poor legal services to clients.

And, in stark contrast to the SLCC’s claims of overall success in mediation, the regulator also revealed the only other case were fees were reduced to zero was a mediation case – raising questions about why lawyers are able to recover any fees at all after being found guilty of ruining a client’s legal affairs.

When asked to give a total amount of exactly how much compensation had been paid at the time of the release of the SLCC 2014 Annual Report – which made a big show of £365K being paid to clients in compensation & fee abatement deals, the SLCC claimed it had no records and therefore could not answer. The regulator said law firms who agreed to rebate fees or pay compensation did not tell the SLCC when such repayments were made, if at all.

The information released by the regulator which details compensation and fee reductions paid in the last year, 2013-2014, reveals the highest award made by the regulator against a rogue solicitor or law firm – was £20,000 – while the lowest award was a mere £50.

While awards of compensation to clients and fee rebates are up, the fact that other than in only two cases, all solicitors & law firms who were found to have provided clients with poor legal services were still able to recover some amount of fees from their clients raises the prospect that clients who complain about their solicitors are not making the point clear enough to the SLCC they  expect fees reduced to nil.

In one case currently being looked into by journalists, it appears a client who made a complaint about their solicitor and asked for fees to be reduced to nil was talked out of it by the SLCC itself.

The information released by the Scottish Legal Complaints Commission in response to questions on compensation & fee reductions during 2013-2014:

1. How much of the £365,000 listed in the latest 2013-2014 annual report as Compensation & fee reductions for complainers at all stages has been paid at the time of the report’s publication;

Compensation/fee rebates agreed as a result of a settlement reached at investigation stage or by way of mediation will generally be paid directly by the practitioners involved to the complainers. Although the SLCC will check that agreements are adhered to, it does not hold records of how much of the compensation/fee refunds has been repaid to complainers in these cases and it is not copied into correspondence between practitioners and complainers about payment arrangements.

2.    How much (amount) is fee reduction & number of cases where fee reduction took place and scale of awards;

The total amount for fee reduction is broken down between cases resolved at investigation stage, cases resolved by way of mediation and cases which have gone to determination. Figures are produced for each of these stages. The figures are recorded for the last financial year July 2013 – June 2014.

At investigation stage fee reductions were made in 15 cases. £9360.35 was agreed in respect of fee refunds. The lowest amount of fee reduction agreed was £91 and the highest was £2112.

At determination fees were abated in 30 cases. The SLCC does not have complete records of the total fee rebates awarded in those cases as it is often not provided with details of the final figure for the fee rebate from the practitioners once a determination is made. I can, however, advise that from our records the total fee rebates awarded at determination amounted to more than £29,608.99. The lowest figure for fee rebates at determination I have identified is £50.50 and the highest is £14,876.32.

At mediation fee reductions were made in 12 cases. A total of £29,610.40 was agreed in respect of fee reductions. The lowest amount of fee reduction I have identified was £488 and the highest was £13,417.74.

3.    How much (amount) is compensation and number of cases where compensation was awarded including scale of awards;

The total figure for compensation is broken down between cases resolved at investigation stage, cases resolved by way of mediation and cases which have gone to determination. Figures are produced for each of these stages.

The figures are recorded for the last financial year July 2013 – June 2014.

At investigation 44 cases were resolved and the sum of £50,627.56 was paid in compensation for injury and distress in respect of those cases. The lowest amount of compensation agreed was £50 and the highest was £6752.66. In 4 cases compensation was paid for losses. The total paid for losses amounts to £22493.50, with the lowest amount being £1000 and the highest £17,000.

At determination compensation was awarded in 86 cases amounting to £191,515.56. This amount covers compensation for injury and distress as well as compensation for losses and outlays. The lowest amount of compensation awarded was £50, the highest was £20,000.

At mediation compensation was agreed in 31 cases amounting to £37,187. This amount covers compensation for injury and distress as well as compensation for losses and outlays. The lowest amount of compensation agreed was £50 and the highest was £8750.

4.    If any cases resulted in fees to complainers being completely nullified and if so how many (and on what scale – amount);

At investigation we have no records of any cases where fees were reduced to nil. At determination we have records of fees being reduced to nil in one case. At mediation we have records of fees being reduced to nil in one case.

5.    Costs are listed as £43,000 for enforcement of compensation, fee refunds and levy payments. How much of this has been recovered and how many civil actions or enforcement actions, if any, have been raised to recover these amounts.

The figure of £43,000 provided in the annual report is an estimate of the staff costs for the work undertaken in recovery of compensation and levy payments etc. The amount does not cover the legal costs of raising actions for recovery of funds. This sum is not recoverable.

An insider at a consumer protection body who was passed the figures by Diary of Injustice commented: “Consumers who make complaints about their solicitors should keep a written record of any material they send to the SLCC while making it clear from the outset one of the goals they expect from the complaints process is for any legal fees to be reduced to nil.”

Detailed coverage of the SLCC’s latest annual report, released in December 2014 can be read HERE, and a further report on why the SLCC has refused to name one single rogue solicitor since 2008 and how solicitors end up recovering compensation they are forced to pay out features HERE

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