Tag Archives: Finance

YOUR BANK, M’LORD? The £40m trail of secretive judicial interests, billionaires, aristocrats & offshore trusts in Hampden & Co, Scotland’s latest bank

Judges, mega rich & offshore money mix in new Scots bank. A RICH LIST of investors in Hampden & Co – Scotland’s first new bank in 30 years – reveals members of the judiciary including a suspended judge – among the ranks of billionaires, aristocrats and anonymous offshore trusts who have pumped in £40 million into the financial institution – located in Charlotte Square, Edinburgh.

Among the ranks of investors in the new bank are figures from the judiciary such as the now suspended Sheriff Peter Black Watson – who was suspended from his current judicial duties by Lord President Lord Gill in February of this year – in relation to legal writs linked to the £400m collapse of hedge fund Heather Capital.

Other judicial figures include Court of Session judges and former EU judge, Scottish lawyer & academic Sir David Edward KCMG QC FRSE.

Today, the Judicial Office for Scotland refused to comment on, or confirm the identities of any judges who hold shares in the new bank.

Hampden & Co annual return reveals wealthy shareholder list. In accounts filed by Hampden & Co, Edinburgh, a Michael Scott Jones – is the registered as owner of 200,000 shares.

The Judicial Office refused to confirm or deny if this is the same Michael Scott Jones who is Court of Session judge Lord Jones.

The accounts for the bank also reveal Peter Black Watson is the holder of 400,000 shares.

While the Judicial Office refused to confirm if this is the same Peter Black Watson who was suspended by Lord President Lord Gill earlier this year “to maintain public confidence in the judiciary”, Watson’s identity as one of the shareholders of Hampden & Co has been confirmed in a report in The Scottish Sun newspaper earlier this week.

Speaking to the media today, the Judicial Office refused to be drawn on the issue of judges investments and the need for a register of judicial interests to enable the public to scrutinise judges interests and links to big business, banks and other vested interests.

A spokesperson for the Judicial Office for Scotland would only say : “Personal investment decisions are a matter for individual judicial office holders.

“Judicial office holders are bound by the Statement of Principles of Judicial Ethics and in the event of a case presenting a potential conflict of interests, by reason of an investment or otherwise, will recuse themselves. These recusal decisions are a matter of public record”.

However, it is a matter of public record not one Scottish judge has declared a financial interest in a case which has resulted in a published recusal, and one senior Sheriff – Sheriff Principal Alistair Dunlop – who held shares in Tesco – did not recuse himself in the case involving the supermarket giant.

No public record of any refusals or failures of judges to recuse themselves have appeared in the list of recusals published by the judiciary.

Neither have any financial details of members of the judiciary appeared in the list of recusals.

A petition currently under consideration by the Scottish Parliament – Petition PE1458: Register of Interests for members of Scotland’s judiciary – calls for the creation of a single independently regulated register of interests containing information on judges backgrounds, their personal wealth, undeclared earnings, business & family connections inside & outside of the legal profession, offshore investments, hospitality, details on recusals and other information routinely lodged in registers of interest across all walks of public life in the UK and around the world.

The petition has cross party support from msps who backed a motion urging the Scottish Government to create a register of judicial interests at Holyrood on 7 October 2014 – reported along with video footage and the official record, here: Debating the Judges.

In an investigation earlier this week by the Scottish Sun newspaper, it was revealed there are fears among some of Hampden & Co’s shareholders of a second independence referendum, tax rises and how the business climate in Scotland will fare under policies of the SNP Scottish Government.

The bank’s investor list reveals predominantly rich, unionist shareholders such as tycoon Alastair Salvesen, self-storage tycoon Alister Jack, Greenock-born financier Malcolm Offord, Dobbie’s garden centre chief James Barnes, Edinburgh art dealer Alexander Meddowes and Stirling-based construction tycoons Duncan Fletcher & Duncan Ogilvie, both worth over £50million. Aristocratic customers includes the Queen’s cousin David Bowes-Lyons and the Earl of Rosebery’s daughter Lady Caroline Primrose.

Euripides Investments Ltd, the new bank’s second largest shareholder, is based in Jersey — meaning its ownership is secret and that owners are likely to pay less tax on profits than individual UK shareholders.

Another major shareholder is Guernsey-based Kusapi Ltd.

Hampden & Co are refusing to reveal the identity of a major Chinese investor – Cai Dang Fang – listed in Companies House records as Hampden’s fourth largest shareholder. But it’s not known whether that is a person or a company — and the bank won’t say if they are based in the UK or overseas.

The private bank’s headquarters in Charlotte Square, Edinburgh, are just a few doors away from First Minister Nicola Sturgeon’s Bute House residence.

However, many of Hampden’s super-rich backers are staunch unionists who fear their savings may be hit by a rampant SNP push for full fiscal autonomy and another independence referendum.

Speaking to The Sun – Founder & Chairman Ray Entwistle (70) insisted “we have absolutely no intention of racing into any kind of decision”.

But referring to the SNP’s election success he warned: “I suspect a host of businesses that were anxious over the referendum last year remain partially anxious about what happened last month.

“This bank is registered in Scotland, the head office is in Edinburgh and we have a large number of friends we want to do business both in Scotland and in London.

“We are going to wait and see what happens over the next few months. “And I suspect that a lot of other businesses are waiting to see what transpires politically.”

Commenting on the bank, Deputy First Minister & Finance Secretary John Swinney said: “We have a world-leading financial services sector and a talented workforce, making Scotland a great place for new businesses to locate. The Scottish Government has been clear about its approach to taxation. This will be based on ability to pay, certainty, convenience and efficiency of collection.”


Lord Gill (73) suspended Sheriff Peter Black Watson (61) after demanding sight of a multi million pound writ against Glasgow law firm Levy & Mcrae – Watson’s former law firm –  which is one of several companies being sued by Heather Capital’s liquidator, Ernst & Young, after the fund’s collapse in 2010. Watson was a director of a company called Mathon Ltd, and another – Aarkad PLC – key parts of the Heather empire.

The collapsed hedge fund Heather Capital – run by lawyer Gregory King is now the subject of a Police Scotland investigation and reports to the Crown Office. Gregory King – a lawyer – is named along with three others – lawyer Andrew Sobolewski, accountant Andrew Millar and property expert Scott Carmichael in a police report.

An earlier statement from the Judicial Office for Scotland on Watson’s suspension reported: Sheriff Peter Watson was suspended from the office of part-time sheriff on 16 February 2015, in terms of section 34 of the Judiciary and Courts (Scotland) Act 2008.

“On Friday 13 February the Judicial Office was made aware of the existence of a summons containing certain allegations against a number of individuals including part-time sheriff Peter Watson. The Lord President’s Private Office immediately contacted Mr Watson and he offered not to sit as a part-time sheriff on a voluntary basis, pending the outcome of those proceedings.

Mr Watson e-mailed a copy of the summons to the Lord President’s Private Office on Saturday 14 February. On Monday 16 February the Lord President considered the matter.  Having been shown the summons, the Lord President concluded that in the circumstances a voluntary de-rostering was not appropriate and that suspension was necessary in order to maintain public confidence in the judiciary.

Mr Watson was therefore duly suspended from office on Monday 16 February 2015.”


Today, 18 June 2015 – Hampden & Co., the first private bank to come through the new process to obtain a banking licence, has opened its doors to clients after securing final regulatory approval at the beginning of June. It is the first private bank to be set up in the UK for 30 years and will address the significant demand in the UK for a new, high quality banking service.

Founded in 2010 by Ray Entwistle, the former Chairman of Adam & Company, the bank has recruited an impressive team of over 50 qualified professional bankers and support staff, headed up by Chief Executive Graeme Hartop, formerly CEO of Scottish Widows Bank.

The bank will deliver a traditional private banking service built on long-term client relationships and personal service from offices initially in Edinburgh and London. Capital of nearly £50 million has been raised for the launch, which demonstrates the confidence investors have in the business opportunity.

Ray Entwistle commented: “There is strong demand for a new private bank which delivers the right quality of service with long-term continuity of personnel and speed of decision making. Over 250 shareholders have come to the same conclusion and they have been prepared to back our experienced team with the capital required to launch our new bank.”

Graeme Hartop added: “The timing for launch is ideal as we continue to experience an improved economic environment, strong client demand and a favourable competitive landscape as a large number of the existing banks continue to deal with significant legacy issues. We will deliver a traditional client-led private banking service, fully focussed on client needs and not product sales targets, which will lead to strong client-to-banker relationships. We are delighted to be welcoming clients on board.”


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When “Sorry” won’t do : Criminal law should be used to protect the public from the ‘off the hook’ style self-regulation empires of banking, finance, legal and key public services

Broken regulation applies to many more services than just banks. During a week in which England’s NHS regulator, the Care Quality Commission (CQC) was forced to admit (in response to a review) it had covered up information relating to the deaths of babies at a hospital in Cumbria, and at Westminster, the Cross-party Parliamentary Commission on Banking Standards report recommended bankers found guilty of a yet to be created criminal offence of “reckless misconduct” be jailed, it is not too difficult to put forward the point once more that regulation as we know it is ineffective and does not pose any deterrent to those it purports to regulate.

Let’s face it, if regulators are happy enough to cover up the deaths of babies in hospitals, and profit from such a cover up, what chance does any of us have in getting justice against any complaint lodged with any of the current regulators of any profession or public service ?

Diary of Injustice has previously reported on cases in Scottish hospitals where in one particularly case of the death of baby McKenzie Wallace at an NHS Forth Valley hospital reported HERE, regulation in the form of the Scottish Public Services Ombudsman (SPSO) ‘Complaints Reviewer’, Eileen Masterman, did nothing to explain the tragic events, other than to produce a ‘whitewash report’ which only contributed further to the hospital’s cover up.

Time and again, we are promised change, told “lessons will be learned” and what happened will never happen again, but it does, whether it’s another avoidable death in a hospital, or an avoidable rip off of consumers and those who should face a court and be found guilty escape with a big fat pension while their victims are left to pick up the pieces.

The recommendations of the Parliamentary Commission on Banking Standards tell a story many consumers have known for years when it comes to regulation. With particular regard to the creation of a criminal offence of reckless misconduct, such a move should not only be limited to bankers, rather also it should be applied to all those professions where the long standing cosy clubs of self regulation have seen the public are let down time & again.

The key recommendations of the report on Banking standards could well be applied to the legal system, where client’s lives are regularly ruined by legal ‘professionals’ who rely on their system of self regulation to get them off the hook just as the bankers have so far escaped punishment for their actions :

* A new Senior Persons Regime, replacing the Approved Persons Regime, to ensure that the most important responsibilities within banks are assigned to specific, senior individuals so they can be held fully accountable for their decisions and the standards of their banks in these areas

* A new licensing regime underpinned by Banking Standards Rules to ensure those who can do serious harm are subject to the full range of enforcement powers;

* A new criminal offence for Senior Persons of reckless misconduct in the management of a bank, carrying a custodial sentence;

* A new remuneration code better to align risks taken and rewards received in remuneration, with much more remuneration to be deferred and for much longer;

* A new power for the regulator to cancel all outstanding deferred remuneration, along with unvested pension rights and loss of office or change of control payments, for senior bank employees in the event of their banks needing taxpayer support, creating a major new incentive on bankers to avoid such risks.

Just imagine if the ‘independent’ Scottish Legal Complaints Commission called for the same powers, and demanded the added protection of criminal law for clients whose finances are regularly wiped out by solicitors free to do it again and again …

Similarly, the key points of the report on Banking standards also tell the same story of problems in the legal profession, and those others in the justice system who work in, manage, and rule over our “Victorian” courts system.

* Given the misalignment of incentives in banking, it should be no surprise that deep lapses in standards have been commonplace. The Commission’s Final Report, ‘Changing banking for good’, contains a package of recommendations to raise standards.

* The recommendations cover several main areas including: making senior bankers personally responsible, reforming bank governance, creating better functioning and more diverse markets, reinforcing the powers of regulators and making sure they do their job.

Just as in banking, when there is no incentive to be honest in our justice system, whether you are a member of the judiciary, a court clerk, a solicitor or even a member of a self regulator of solicitors, the same deep lapses in standards have also become commonplace because there is no deterrent in current regulation and no fear of being caught.

The full report on banking standards by the cross party Committee on Banking Standards can be found at the following links :

If we are going to charge the bankers with reckless misconduct for ruining the banks, we may as well also charge the lawyers who ruin countless clients, and get away with it in the same way the bankers have done up to now.

If this were to happen, and the likes of the John O’Donnell’s and countless other reckless lawyers in Scotland face a custodial term for their wholesale thieving, attitudes within the prosecution service would also have to change, particularly in Scotland where our own Lord Advocate’s Crown Office refused to prosecute FOURTEEN lawyers for legal aid fraud.

But of course, when these events happen around the fringes of a stone age legal system where our top judge would rather listen to organ music and play ‘fly me to the moon’ than show up to answer questions in our sovereign Parliament about transparency in the judiciary, and perhaps give an indication as to why judges seem to think they are above the law, then what can we expect ?


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UK Banking Regulation ‘a joke’ as Financial Services Authority clears Royal Bank of Scotland & ‘World’s Worst Banker’ of wrongdoing over bank collapse

FSAFinancial Services Authority wont publish RBS review’s content but claims RBS collapse was down to bad decisions only. THE SPECTACULAR COLLAPSE of the Royal Bank of Scotland under the leadership of Sir Fred Goodwin, dubbed by the media as the ‘World’s Worst Banker’ was simply down to bad business decisions, rather than corruption or any lack of integrity, so says the UK’s financial regulator, the Financial Services Authority (FSA) in a timely release today while most of the county’s focus remains on winter storms, Russia winning the competition to host the 2018 World Cup (удача!), and yet more expected headlines from Wikileaks on international & domestic political double dealing.

After completing an investigation which began in May 2009, the Financial Services Authority released a statement today after completing its supervisory investigation which began in May 2009. The FSA said RBS had made “a series of bad decisions” and the bank’s failure which led to the massive multi billion pound UK taxpayer bailout, seeing the RBS 84% owned by the Government, was “not the result of any lack of integrity by any individual and we did not identify any instances of fraud or dishonest activity by senior individuals or a failure of governance on part of the board“.

Fred GoodwinSir Fred Goodwin, off the hook, still working and still has a title, unlike many now being made redundant because of the UK banking collapse.The FSA said it would be taking no enforcement action as a result of the investigation, either against the firm or against individuals, so all those who were instrumental in the downfall of the UK’s largest financial institution, and are responsible for the biggest public service cuts ever in this country, along with throwing millions of people’s lives into financial turmoil, get away with it once again. Is this justice ? I think not. However it is consistent with regulation in the UK, that is, in the world of non-existent regulation.

The FSA’s statement in full :

FSA closes supervisory investigation of RBS

In May 2009 the Financial Services Authority (FSA) launched a supervisory investigation into Royal Bank of Scotland Group (RBS), as one of the UK banks that required partial taxpayer bailout support. This work considered if regulatory rules had been broken and what, if any, action was appropriate. The review was necessarily extensive and looked specifically at the conduct of senior individuals at the bank, the acquisition of ABN AMRO in 2007 and the 2008 capital raisings. The FSA conducted the review with assistance from PWC.

The FSA has now completed this supervisory investigation. The review confirmed that RBS made a series of bad decisions in the years immediately before the financial crisis, most significantly the acquisition of ABN AMRO and the decision to aggressively expand its investment banking business. However, the review concluded that these bad decisions were not the result of a lack of integrity by any individual and we did not identify any instances of fraud or dishonest activity by RBS senior individuals or a failure of governance on the part of the Board.

The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals. However, the competence of RBS individuals can, and will, be taken into account in any future applications made by them to work at FSA regulated firms.

The FSA’s supervisory investigations into other banks that ‘failed’ during the crisis are ongoing. If they lead to enforcement action being taken then it would be usual for the FSA to make these outcomes public if such actions against individuals or institutions are successful.

The FSA cannot publish the content of the RBS review as information gathered from the bank during the course of the review remains confidential under the Financial Services and Markets Act 2000 (FSMA).

Rob MacGregor for the UNITE union released a statement condemning the FSA’s decision not to prosecute the RBS executives and condemned the FSA as being unable to hold the banking sector to account.

Rob MacGregor, Unite national officer, said: “Once again the Financial Services Authority has demonstrated its weakness and inability to hold the sector to account. The report’s conclusions are an outrage. It is unacceptable to suggest that the behaviour of the management in this iconic UK bank did not ‘lack integrity’ when they brought RBS to its knees, resulting in thousands of staff losing their livelihoods.

“By failing to bring any formal charges against the RBS executives the FSA has allowed some of the biggest villains of the financial crisis to go on enjoying their millionaire lifestyles whilst taxpayers experience cuts and staff face an insecure future.”

We can remind ourselves just what happened to the Royal Bank of Scotland at the hands of Sir Fred Goodwin, who still retains his knighthood and a job, unlike many victims of the public services cuts, including the UK’s armed forces and even the carrier HMS Ark Royal, now sunk twice it seems, the first time by a U-Boat of the Nazi German navy and now sunk again or scrapped as a result of the financial harm inflicted on the country by bankers who are off the hook once again.

Collapse of the Royal Bank of Scotland (Click images to watch video)

The Herald newspaper reported that during the Treasury Select Committee’s evidence sessions, “The four ex-chiefs of Royal Bank of Scotland (RBS) and HBOS admitted to having no formal banking qualifications between them in today’s dramatic grilling by MPs.

“Members of the Treasury Select Committee heard how not one of the witnesses – who presided over two of Britain’s biggest and worst hit banks – had technical banking training. The bosses – including former RBS chief executive Sir Fred Goodwin – were forced to defend themselves against tough questions over their suitability to lead the banks, which had to be bailed out with billions of pounds of taxpayers’ cash.”

“Sir Fred denied he lacked experience, saying he had a degree in law and was a qualified chartered accountant, while also having worked as chief executive of the Clydesdale Bank and Yorkshire Bank before joining RBS. Sir Tom McKillop, previously chairman of now part-nationalised RBS, said he was “certainly numerate”, although he conceded he had not studied banking specifically.”

Disgusting. These people have made fools of our country, our financial system, even our way of life. There are no words at all really to describe what they have done, and the suffering their actions are causing us – but its all ok because Sir Fred Goodwin had an LLB, and since the FSA said it was all just down to a few bad decisions, that’s fine. Right ?


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OFT & Which? call for independent regulation of lawyers as Justice Committee hears evidence on Legal Services Bill

Debating chamberHolyrood’s Justice Committee heard regulation must be taken away from the Law Society of Scotland. THE OFFICE OF FAIR TRADING has told the Scottish Parliament’s Justice Committee the Law Society of Scotland should be stripped of its regulation role, to give better consumer protection in any reformed legal services market, after constant revelations in the media and in consumer groups investigations & public surveys of the legal profession’s constant habit of covering up complaints against the rising numbers of ‘crooked lawyers’ working in Scotland’s many law firms.

Office of Fair Trading & Which? call for independent regulation of legal services in Scotland.

The OFT, and Which? both reiterated their points that a separation of the Law Society’s regulatory role from the Society’s main function, which is to represent its member solicitors & law firms .. usually against the interests of clients and consumers, when a complaint arises challenging the conduct or service of a solicitor or law firm.

Sue Aspinal, team leader of the professions team at the OFT, said in reply to a question from Cathy Craigie MSP on the separation of the Law Society’s regulatory role : “From the evidence, we know that we are talking about public perception. If a body were to try to further the interests of both its membership and the public, tensions—even conflict—will arise. The best way in which to avoid conflict is to have a separation of the two roles.”

Julia Clarke, of consumer group Which? commented further on the issue, saying : “Which? believes that there should be a separation between the two functions. The system does not work satisfactorily, so it cannot be said that it is perfect. At the very least, particularly in terms of public perception, separating the two functions would be an improvement.”

Ms Clarke continued : “Obviously, the proposal for a lay majority and a lay chair is good news. That is progress, but our view is that there should be complete separation between the two functions. If that cannot be done, the proposed committee to advise the Government on future regulation is a way forward. It is important that its membership should be drawn from beyond the legal profession. It should certainly have a lay majority and a lay chair. It should be a statutory body because it is proposed that the Government will regulate the regulators. That is not ideal but, if it is to happen, it is important that we have a strong advisory body.”

After an additional question from Cathy Craigie MSP on whether consumers might benefit from more than one regulator in Scotland’s reformed legal services market, Sue Aspinall of the OFT replied : “Competition should normally have benefits for consumers unless there is a particular market in which it is best to have only one provider. The OFT’s position is that approved regulators have an important role to perform in the way that they license and we hope that, if there is demand for a choice of approved regulator, that will develop the number of licensed legal services providers coming through, which will mean that there will be more such firms for consumers to choose from.”

nigel_donNigel Don MSP ‘ill informed’ over lack of client’s access to advocates. Justice Committee member Nigel Don MSP, also Parliamentary liaison to the Justice Secretary Kenny MacAskill, entered the debate on the question of the Faculty of Advocates being left out of legal services reform, apparently putting forward Mr MacAskill’s own view that regulation of legal services by judges of the High Court, rather than consumer watchdogs, would be a preferable model. Mr Don also went onto make an outlandish, unsubstantiated claim that “0.5% of the population were not able to work through a solicitor to get the right advocate …”

Clearly Mr Don hasn’t spent much time with actual members of the public trying to pursue cases through the courts which require the services of an advocate. If he had, he would know his fantastic claim is well out ….

Nigel Don enquired : “I am told that 460 advocates practise in Scotland. That is a fairly small bunch of professional, highly qualified people. Do we really need a complicated structure for the regulation of 460 people who are regulated by the court anyway ?”

Julia Clarke, of Which”? replied : “The consumer principles are the same wherever people live in the UK. People are entitled to the same level of transparency and the same protections in the industry with which they are dealing. If services do not modernise, the consumer has no way of demanding their modernisation—they are just presented with what is available. If there is no opportunity for choice, the consumer cannot make their needs felt and must keep taking whatever is delivered. Unfortunately, that is the case at the moment.”

Nigel Don further added : “Would you not prefer to have a service—especially a legal one—that is regulated by the judges of the High Court rather than by some consumer watchdog? If I want lawyers, whose business is speaking to a court, to act professionally in my interests and the interests of justice, would I not much prefer them to be guided and regulated by the Lord President rather than by another organisation ?”

Julia Clarke of Which? replied : “I cannot see what is wrong with independent regulation that is properly regulated and comes with all the necessary safeguards. I think that everyone was keen that that should be in place and, by and large, that is what is proposed in the bill.”

Law Society of ScotlandEven some solicitors think Law Society is now ‘too crooked itself’ to be trusted with regulatory role. A solicitor described Mr Don’s comments this morning as ‘ill informed’, saying : “Mr Don should come in and ask some clients if he can follow their cases all the way to court. If he did he would realise that obtaining the services of an advocate is not like turning on a tap to get water.”

He went on : “We as a profession can fool ourselves as much as we want about who trusts the Law Society to regulate solicitors, but the fact is the public do not trust self regulation, nor do they have a reason to trust self regulation, certainly going by the numerous bad examples set by the Law Society. Putting the Lord President in charge, as Mr Don suggests, would probably only make matters worse from the public’s perspective, given the fact that even the Lord President was once himself, a lawyer.”

You can read the full report of the Justice Committee meeting and the evidence from the OFT & Which?, here : Legal Servies Bill evidence, Justice Committee Official Report 8 December 2009 and watch the video coverage on the Parliament’s website HERE, or at the following links from InjusticeTV here :

Scottish Parliament : Which & OFT give evidence on Legal Services Bill Part 1 Pt 1 Scottish Parliament : Which & OFT give evidence on Legal Services Bill Part 2 Pt 2 Scottish Parliament : Which & OFT give evidence on Legal Services Bill Part 3 Pt 3

Scottish Parliament : Which & OFT give evidence on Legal Services Bill Part 4 Pt 4 Scottish Parliament : Which & OFT give evidence on Legal Services Bill Part 5 Pt 5 Scottish Parliament : Which & OFT give evidence on Legal Services Bill Part 6 Pt 6

Scottish Parliament : Which & OFT give evidence on Legal Services Bill Part 7 Pt 7

Over the next few days, more will be reported from the Justice Committee hearings on the Legal Services Bill, including coverage of Professor Alan Paterson’s evidence, and sessions with the Law Society of Scotland, Faculty of Advocates, and other sections of the legal profession who attended Parliament.


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Consumer fears as Law Society pleads to Scottish Parliament’s Justice Committee for more ‘closed shop regulation’ of legal services in Scotland

Debating chamberScottish Parliament will hear pleas from lawyer to continue regulating themselves. THE JUSTICE COMMITTEE of the Scottish Parliament will tomorrow, Tuesday 15th December, hear pleas from the Law Society of Scotland to be allowed to continue in its role as self regulator of the lion’s share of legal services in Scotland, despite the fact that for well over three decades now, self regulation of Scotland’s 10,000 solicitors by the Law Society of Scotland has led to the lowest standards of legal services in the western world, and the highest number of complaints made against its member solicitors, many involving serious issues of fraud, dishonesty, and almost endemic negligence from many solicitors & legal firms who promote themselves as some of the ‘most respected’ in Scotland’s legal services marketplace.

The Legal Services Bill, currently being considered by the Scottish Parliament’s Justice Committee, is an attempt to widen public access to justice in Scotland, and also allow legal firms to draw in outside investment, hence the term ‘alternative business structures’, used by the legal profession to placate its desire for more money, but very much less by way of any improvements for consumer protections, which of courses the Law Society of Scotland wishes to keep control of for itself.

You can read my previous reports on the Legal Services Bill, once called the ‘Legal Profession Bill’ by the Scottish Government but changed after some smart-eyed civil servant thought it sounded too ‘pro-the-lawyers’, here : Legal Services Bill for Scotland – an attempt at access to justice, or simply to give lawyers more control over justice ?

Ian SmartLaw Society President, Ian Smart claims the Law Society must maintain regulation to protect its members. The Law Society of Scotland’s current President Ian Smart said today in a relatively unremarkable Press Release that : “The bill is set to reform how legal services can be delivered in Scotland and help provide the means for lawyers to modernise their businesses to meet the needs of their clients. Overall the Society is in agreement with the aims of the bill but we have identified key areas of concern and recommended a number of amendments.”

Mr Smart stated the Law Society’s priorities are :

* A robust regulatory system is put in place to provide strong consumer protections and ensure that high standards are maintained among those delivering legal services. (something the Law Society has never managed since 1947)

* Independence of the legal profession from government must be maintained. (Surely this is in no doubt.)

* A level playing field is required for those in the legal services market, whether as a legal services provider or as a regulator. (level playing fields also have to include consumers, of which the Law Society seems to have forgotten about once again)

* Access to justice must not be hindered. (rich, coming from Mr Smart, given the fact the Law Society of Scotland is the greatest hindrance of the public’s access to justice)

Would Granny Swear by the Law Society - The Herald June 5 2006Former Law Society Chief Douglas Mill’s policy to protect consumers was to wipe out their claims and write secret memos against their complaints, featured in a Herald newspaper expose. What consumer protections is Mr Smart actually talking about ? There is no such thing as consumer protection against ‘crooked lawyers’ in Scotland, where up to 5,000 plus complaints are made each year against Scotland’s less than 10,000 solicitors (in one year the figure was as high as 8,000 complaints) and many complaints involving allegations of theft, embezzlement, fraud, dishonesty and negligence, never see full compensation paid to clients who have to engage the Law Society for years in letters while the solicitor who ripped them off gets away with a Law Society slap on the wrist. You can read a previous report I did on the ‘consumer protections’ currently on offer by the Legal Services Bill, here : Legal Services Bill promises nightmare complaints scenario for consumers as Law Society campaigns to control regulation over ‘Tesco Law’ reform

Ex Law Society Chief Douglas Mill’s grilling by an earlier Justice Committee on consumer protections & poor Law Society regulation left Scots in no doubt the legal profession is rotten to the core.

Ian Smart just couldn’t resist pressing on with the Law Society’s tired line on regulation and how to maintain control over it, going onto comment : “Maintaining regulation, representation and professional support within one organisation means the Society can be an effective membership organisation for Scotland’s 10,000 solicitors, as it acts for a group that is effectively regulated.”

He continued : “We also have to bear in mind that Scotland is a distinct legal jurisdiction with a relatively small and scattered population. This, among the many other considerations, must be taken into account to avoid any unnecessary bureaucratic or financial burden. We look forward to engaging with the profession, Scottish Government, the Parliament and other interested groups in the future development of legal services in Scotland.”

Scotland is a distinct legal jurisdiction only because you keep it that way, Mr Smart. Scotland is a distinct legal jurisdiction which does not allow its people unhindered access to justice and access to the courts, simply because the Law Society of Scotland forces anyone who requires access to justice to use the services of an expensive solicitor who is also a member of the Law Society of Scotland.

How much of an unnecessary bureaucratic or financial burden would it be to allow Scots a voice in the justice system instead of going through one of your colleagues, Mr Smart ? Surely it would be worth it, considering the huge fee notes, many of which are fraudulent these days, that are being handed out by law firms to clients just to make up the profits in these dire financial times …

A spokesman for one of Scotland’s consumer organisations today expressed dismay at the Law Society’s attitude towards the Legal Services Bill, claiming the Law Society ‘was seeking to control the entire debate on access to justice and maintain control over regulation’.

He said : “We have heard all this before from the Law Society when it comes to making any changes to consumer access to legal services in Scotland, however small they may be. The Law Society comes out claiming the house will fall down if it is not allowed to regulate the legal services market and enforce some kind of fantastic standard of service provided by legal practitioners which frankly does not exist if the views of consumers are to be taken into account.”

He continued : “However, I detect a hint of worry in the Law Society’s recent abrupt turn on their attitude towards the debate on alternative business structures, as they clearly feel they are in a much weakened position now that campaigners and consumer groups are consistently tackling the issue of Scotland’s notoriously poor legal services market and the high levels of client complaints.”

“It is to be hoped the Justice Committee will see through the Law Society’s obfuscation of the fact that legal services in Scotland have always been poor, and will always be poor as long as the Law Society has any hand in regulatory matters.”

As an experienced reporter on issues relating to the Law Society of Scotland and regulation of complaints, it is very clear the interests of consumers will only be served by a complete overhaul of regulation of legal services in Scotland, with consumer protection made the first priority, rather than the profession being allowed yet again to maintain the closed shop regulation system which as we have repeatedly seen over the decades, operates a hostile policy towards complaints & disputes between consumers & solicitors.

You can read the Law Society of Scotland’s submission to the Scottish Parliament’s Justice Committee on the Legal Services Bill, here : Law Society of Scotland evidence on Legal Services Bill (pdf) and you will be able to watch the live stream of evidence given by the Law Society representatives at the Justice Committee, tomorrow, by selecting the Justice Committee live video stream on the main page, here : Holyrood TV


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Legal Services Bill submissions published by Scottish Parliament – add yours before 18th December 2009 to help protect Scots access to justice

Debating chamberHolyrood’s Justice Committee publishes submissions on Legal Services Bill. REFORM OF LEGAL SERVICES in Scotland is now firmly on the cards with alternative business structures for law firms, expansion of rights of audience, representation and wider access to justice for Scotland’s consumers being considered by the Justice Committee of the Scottish Parliament.

However, while the legal profession and some consumer organisations such as Which?, Consumer Focus Scotland, and the Government agencies such as the Office of Fair Trading have given their replies, actual consumers of legal services should consider writing into the Parliament with their own experiences of legal services in Scotland.

I have reported previously on the Legal Services Bill and its intentions here : Legal Services Bill for Scotland

So far, a total of nineteen received submissions have been published by the Scottish Parliament’s Justice Committee, which everyone who uses legal services in Scotland would do well to read and add their own letter or submission to the Justice Committee BEFORE 18th December 2009 at the latest. Experiences from actual consumers who have used legal services in Scotland, whether good or bad, are vital to help the debate and ensure the new legislation will help consumers rather than protect old monopolies held by the legal profession over individual’s access to justice in Scotland.

For specific information on the Bill, please contact Andrew Proudfoot, Assistant Clerk to the Committee, on 0131 348 5047 or email or with your written submission.

The submissions can be downloaded on the Parliament’s website in adobe acrobat format, at the following links :

Legal Services (Scotland) Bill – written submissions received

LS1 Scottish Police Federation (10KB pdf)

LS2 Faculty of Advocates (25KB pdf)

LS3 Gilbert M. Anderson, Solicitor (42KB pdf)

LS4 Which? (20KB pdf)

LS5 Thompsons Solicitors (37KB pdf)

LS6 Institute of Chartered Accountants of Scotland (20KB pdf)

LS7 Scottish Law Agents Society (54KB pdf)

LS8 Walter Semple and Catriona Walker, Solicitors (48KB pdf)

LS9 Unite Trade Union Scottish Region (30KB pdf)

LS10 Chartered Institute of Patent Attorneys (21KB pdf)

LS11 Citizens Advice Scotland (33KB pdf)

LS12 Office of Fair Trading (60KB pdf)

LS13 Professor Alan Paterson (41KB pdf)

LS14 Scottish Legal Complaints Commission (17KB pdf)

LS15 Consumer Focus Scotland (57KB pdf)

LS16 WS Society (73KB pdf)

LS17 Law Society of Scotland (80KB pdf)

LS18 Scottish Legal Aid Board (22KB pdf)

LS19 Society of Solicitor Advocates (28KB pdf)


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Advisory : Clients must protect their money from unsafe legal firms as Law Society’s Guarantee Fund fails.

Law SocietyYour money is no longer safe with your lawyer. £50 million plus of money belonging to clients of Scottish legal firms is at considerable risk of loss, after revelations the Law Society’s Guarantee Fund has less than £2 million left in its coffers to cover the millions held by Scottish solicitors on behalf of their clients in everything from house purchases & sales to the administration of wills, investments & settlement payments.

AdvisoryMy advice : Clients should immediately withdraw their funds from any legal firm or solicitor who may be holding monies on their behalf. If you have funds being held by your solicitor, make it your priority this week or as soon as possible to ensure the safety of your wealth, or you may end up losing it.

There is simply no way the legal profession can guarantee the safety of your money in the wake of the financial downturn. You will have to be the best judge yourselves as to how to safeguard your own wealth, but trusting it to your solicitor who lacks any protection for its loss, is no longer an option.

While the news is filled with reports about banks & building societies having to be bailed out by the Government, little attention has been paid to the rate of legal firms heading for disaster, and not forgetting the huge rise in fraud cases involving solicitors falsifying banking records and financial transactions, usually for their own benefit. It is the Guarantee Fund which would cover such frauds on client’s funds, but the compensation scheme run by the Law Society which is supposed to repay defrauded clients, has been unmasked as little more than a theatre spectacle, offering nothing to victims of ‘crooked lawyers’.

I reported earlier on the Guarantee Fund’s problems and client’s attempts to claim from it here : Law Society’s ‘Guarantee Fund’ for clients of crooked lawyers revealed as multi million pound masterpiece of claims dodging corruption

A legal insider at the Law Society said when asked about the Guarantee Fund problems : “We are going to end up in a situation where there wont be enough money coming in from Solicitors to the Guarantee Fund to keep adequate levels of money available to cover failed legal business or lawyers taking their clients money for themselves.”

This claim is backed up by revelations that reserves in the Guarantee Fund only amount to a paltry £1.7 million at this time, and with significant outstanding claims standing at £4.3 million, together with incoming claims expected to reach double figures in the millions this year over buy-to-let & mortgage fraud schemes, there seems little prospect of clients recovering anything from solicitors who decide to take the money for themselves.

As an example to emphasise the lack of safety of clients funds, a client who contacted me who entered into a house purchase transaction with a legal firm now faces a total loss of £185,000, which was handed over to his solicitor who was holding it in the legal firm’s client account on a short term basis while the client’s property transaction went through.

Eleven weeks later, the deal had still not been completed and it emerged the solicitor had taken £47,000 of the clients cash to prop up his legal firm’s huge debt. The solicitor then told the client the seller had made off with his money, and had refused to hand over the titles.

The client uncovered what had actually happened through his bank and an ex member of staff from the legal firm in question, but the Law Society did nothing. The client is still seeking legal representation to sue the Law Society and the solicitor concerned, who continues to represent unsuspecting clients in property transactions.

It is reported that discussions have taken place at the Law Society of Scotland on the idea of seeking external funding to the Guarantee Fund, or even asking for Government assistance of some kind, if the situation arises, as looks the case that the Law Society will not be able to meet its ‘official’ commitment to ‘safeguard’ clients funds – a commitment in reality it has never managed to achieve in the Society’s entire history.

However, fears were expressed by some lawyers that the public might not be too receptive to millions of pounds of taxpayers money being used to keep legal firms and lawyers afloat, given a general antipathy towards the legal profession for their poor regulatory conduct and overcharging of fees over the years for very poor legal services.

During discussions on how best to proceed with the flagging Guarantee Fund, officials warned that any external bailout of the compensation scheme would open up the actual workings of the Guarantee Fund & Master Policy to unwelcome public scrutiny, where questions would arise over the suspicious nature of how client claims for compensation are ‘managed’ and transferred back & forth between the two schemes to delay, deceive and generally thwart payouts to genuine victims of ‘crooked lawyers’.

A leading accountancy firm gave comment last week, claiming there may be up to £100 million of private & corporate clients money held by Scots legal firms which may well now be in unsafe hands.

An accountant with the firm who declined to be named said : “You would be correct in assuming there is a significant risk to funds held by your solicitor or legal firm in current market conditions. The advice we could only offer just now is to bank it and look after it yourself. After all, it’s your money, why let anyone else hold it or manage it in this financial climate.”

So, there you have it. If you currently have money with a lawyer, for any reason at all, take it out of their hands and ensure you put it in a safe place where you control it, not someone else who will only use it to further their own financial gain at your expense.


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