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Holyrood’s Justice Committee votes against majority non-lawyer ownership of law firms, saves investors from funding Scots legal world’s organised crime gangs

Justice CommitteeScottish Parliament’s Justice Committee voted against non-lawyer ownership of law firms. INVESTORS can breathe a sigh of relief at the result of a vote at the latest Justice Committee hearing of the Scottish Government’s beleaguered Legal Services Bill, where last Tuesday, MSPs voted through an amendment written by the Law Society Scottish Government to restrict non-lawyer ownership of Scottish law firms to 49%, throwing out the Scottish Government’s initial proposals that non-lawyers could end up owning 100% of law firms if the ‘alternative business structures’ as originally proposed in the Legal Services Bill had become law.

The problem with the original proposal, allowing non-lawyers to invest or even totally own a Scots law firm raised the question who would actually want to buy in to any Scottish law firm with the kind of poor regulatory & client treatment record which is so typical of providers of legal services in Scotland’s currently solicitor only dominated legal services market ?

Who for instance, would want to invest in a law firm with over thirty partners which is currently facing 21 separate complaints investigations (5 of those involving embezzlement of client funds), 20 negligence claims, 9 claims against the Guarantee Fund & 2 criminal investigations ?

Luckily for the law firm in the above typical example, and noting many others have similarly poor complaints records, they wouldn’t have to disclose such information to potential investors and of course, the Law Society of Scotland would never volunteer such detailed information which may slightly discourage any investors with an ounce of common sense from touching a Scottish law firm with a barge pole …

This is certainly one vote on the Legal Services Bill which may well end up saving outside investors a lot of money, as most Scots law firms are seen as poorly performing & untrustworthy, holding among the worst rates of client complaints & consumer dissatisfaction in the modern world, where it has become more the norm than the exception for clients to be ripped off after engaging the services of even the most famous law firms in Scotland’s legal services marketplace today.

The Justice Committee’s latest stage two debate on the Legal Services Bill, during which several amendments were debated as well as the non-lawyer ownership issue (Amendment 317), can be read in full here : Legal Services (Scotland) Bill: Stage 2

robert_brownRobert Brown MSP (LibDem) voted in favour of restricting outside control of Scots law firms. Robert Brown, speaking in favour of Amendment 317, put forward by the Law Society to restrict outside ownership of law firms said : “Amendment 317 is designed to ensure that there is a majority holding in the hands of solicitors or other regulated professionals. It is the compromise position that was debated and supported by the Law Society of Scotland. I hope that it has the merit both of being reasonable and, as the convener indicated, of being common ground on which the profession can regroup, to some extent.”

Mr Brown continued : “I do not pretend that it is the perfect solution—there are issues with all the potential solutions—but it provides further protection against outside control, which is, rightly, of concern to many solicitors. Last week we debated issues relating to the rights of minority investors. It is certainly the case that influence is as relevant as control. Nevertheless, amendment 317 would put a brake on the extent to which law firms can be taken over by outside interests. The committee should apply that brake.”

I for one am certainly in agreement with Mr Brown on this issue. Unsuspecting members of the public & potential investors must be protected from pumping their money into some law firms whose business models border (or even surpass) that of organised crime. Perhaps an amendment should be raised prohibiting law firms from accepting any outside capital investment, thus saving a lot of people from a severely dodgy investment in very dodgy law firms …

Fergus EwingFergus Ewing, Minister for Community Safety argued in favour of external ownership of law firms. The Scottish Government’s Community Safety Minister Fergus Ewing, once again apparently standing in for the Justice Secretary Kenny MacAskill who has all but disappeared from the Legal Services Bill debate put forward the Scottish Government’s view, claiming the Legal Services Bill would usher in effective regulation : “I emphasise that the bill contains a particularly Scottish solution. It is important that we have a robust regulatory regime. I can recall having been involved in debating no more robust regulatory regime as a member of the Parliament for the past decade. That regime will also be obtained at virtually no expense to the taxpayer. That contrasts with the position down south, where the Legal Services Board’s implementation costs to 31 December 2009 were £4.58 million and its budget for running costs in its first full year, which began in April 2010, is £4.74 million. Similar costs here would not be as high as that, but would be comparable.”

Mr Ewing, you must be kidding. Regulation without expense to the taxpayer ? Even the Scottish Legal Complaints Commission received a whopping £2million from the taxpayer, effectively a public gift to the legal profession which your Ministerial colleagues now refuse to talk about or demand returned to help protect public services now on the verge of being slashed due to the UK’s budget deficit.

SLCC LAW SOCIETYLaw Society of Scotland & Scottish Legal Complaints Commission are anti-client when regulating complaints against lawyers. Robust regulation of the legal profession in Scotland is simply not possible, as all reforms to regulation to the present date have been compromised by the Law Society and so willingly voted through by politicians in the Scottish Parliament. The new broom of the Scottish Legal Complaints Commission (SLCC) has become little more than the anti-client front organisation for the Law Society of Scotland and rogue lawyers the Law Society always wanted it to be, leaving the reforms of the LPLA (Scotland) Act 2007 firmly in the rubbish bin. The same is already happening with the Scottish Government’s plans for a ‘robust regulatory regime’ for the Legal Services Bill which has been steadily re-written by the legal profession itself.

Without much surprise, the Law Society of Scotland welcomed the Justice Committee’s vote to retain Law Society member majority ownership of law firms, thus ensuring the society’s continued influence & control over consumers choice of legal services in Scotland.

Jamie Millar, President of the Law Society of Scotland, said: “A number of key amendments were debated today and I am very pleased that the committee has agreed that there should be a majority ownership of new legal services providers by solicitors and other regulated professionals. It’s clear that MSPs on the committee have listened carefully to the issues and concerns raised by the profession and others, particularly those about external ownership, and what has been agreed today is very much in accordance with the Society’s own policy on ABS ownership.”

Lord Hamilton judicialThe Lord President Lord Hamilton is once again ‘a buffer’ between the Government & legal profession to maintain lawyers independence (from independent accountability). Mr Millar also said that the Society was pleased that the role Lord President of the Court of Session was to be enhanced and that his consent would be required in the appointment of approved regulators. He echoed the comments of Robert Brown MSP who said the role of the Lord President was an important ‘constitutional buffer’ (in other words, a well practiced drain-blocker, immovable by any means in existence) between the government and the legal profession and necessary to preserve the independence of the profession.

With the dreaded inclusion of the Lord President in all of this, at the behest of the Law Society of course, lets hope the Lord President doesn’t take 40 years to come to a decision (as he did with McKenzie Friends) on whether approved regulators (the Law Society of Scotland being the only ones applying) are functioning properly or not – and since the Law Society hasn’t managed to regulate the legal profession properly in the past 60 years, we doubtless can expect a continuance of the Law Society of Scotland’s style of crooked self-regulation when or if the Legal Services Bill manages to pass into law.

So, obviously the Law Society is pleased with it’s re-write of the Legal Services Bill after all that fuss & pantomime between so-called ‘factions’ of the Scots legal profession wanting to break away if they didn’t get their way … and then getting themselves elected to the Law Society’s ruling council after things went their way ….

My advice to consumers ?

The Legal Services Bill as it is being re-written by the Law Society of Scotland, will not benefit consumers of legal services in Scotland one bit, so much that now, some of the consumer organisations which are responsible for the Legal Services Bill’s very existence, now choose not to issue comment on its progress nor have those same consumer organisations chose to campaign against any of the Law Society sponsored re-writes of the Legal Services Bill, which was initially claimed would bring free choice of legal services to consumers in Scotland.

Clearly, for honest, dependable legal services, consumers are going to have to look elsewhere, as the Scottish legal profession under the regulation of the Law Society of Scotland & SLCC couldn’t be trusted with an exploded oil well, which I’m sure they would argue was nothing to do with them as similarly appears to be the case in each of the 5000 complaints & grievances filed or expressed by clients against solicitors & advocates each year in Scotland.

My advice to investors looking at putting their money into Scottish law firms ?

Take your investments elsewhere ! There are billions more opportunities and safer havens around the world for your money than investing in Scots law firms with poor regulator records who would much rather dance the tune of the Law Society of Scotland than give you a good, stable, dependable return on your investment. You would be well advised to avoid investing in what many corporate & private clients of Scots law firms, through their own bitter experiences of using solicitors in Scotland dub ‘the organised crime of the Scottish legal services market’.

You can read my own coverage of the Legal Services Bill here : Legal Services Bill for Scotland – The story so far

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Holyrood’s Justice Committee calls on public to submit experiences on using & improving Scotland’s legal services market

Debating chamberScottish Parliament calls for evidence on public use of courts & legal services. If you have used a Scottish lawyer or the courts and felt the service you did not receive was tip top, or bordered on the woefully inadequate, now is the time to put those experiences in writing by 1st December 2009 to the Scottish Parliament’s Justice Committee, along with suggestions for improvement, and your thoughts on the proposals contained in the Scottish Government’s Legal Services Bill, which hopes to give Scots wider choice of legal representation and a more accessible, competent and trustworthy legal services market than the current broken model, monopolised by the Law Society of Scotland and so poorly regulated that consumer complaints statistics have previously reached staggering heights of up to 8000 cases a year against less than 10,000 solicitors in private practice.

You can view the current version of the Legal Services Bill here : Bill (as introduced) (469KB pdf posted 01.10.2009)

The Legal Services Bill concerns the provision and regulation of legal services in Scotland. It takes forward the proposals contained in the Scottish Government’s consultation paper Wider choice and better protection – a consultation paper on the regulation of legal services in Scotland published at the turn of the year. That consultation followed on from reform across the legal services market in the rest of the UK, driven initially by the 2004 report of the European Commission on Competition in professional services and also prompted by a “super-complaint” by consumer group Which? to the Office of Fair Trading.

The Bill’s Policy Memorandum advises that the profession is facing significant challenges, including competition from English firms entering the Scottish legal services market and the effects of the economic downturn. The Bill aims to provide the opportunity to offer new forms of service, improve efficiency and innovation within solicitors’ firms, and provide access to different methods of capitalisation.

In practical terms, the Bill aims to broaden access to high quality legal services, by allowing solicitors to operate using different business models, for example allowing them to enter into business relationships with non-solicitors, allowing investment by non-solicitors, allowing external ownership and more generally freeing up the market.

The Bill proposes a system of licensed legal service providers, overseen by regulators approved and licensed by the Scottish Government. The Bill also includes related measures, for example:

  • to support the modernisation of the governance of the Law Society of Scotland
  • to allow the Lord President and the Scottish Ministers to grant professional and other bodies rights to conduct litigation and rights of audience in the Scottish Courts
  • to provide a more direct route by which other professionals, not just solicitors, might be authorised to deal with executries
  • to give the Scottish Legal Aid Board the duty of monitoring the availability and accessibility of legal services.

Legal Services (Scotland) Bill – call for written evidence

The Scottish Parliament’s Justice Committee is seeking views on the general principles of the Legal Services (Scotland) Bill (The Scottish Parliament: – Bills – Legal Services (Scotland) Bill (SP Bill 30)). The Scottish Government has prepared a Policy Memorandum, Explanatory Notes and other accompanying documents (including a Financial Memorandum) which are published to accompany the Bill.

The Bill was introduced in the Parliament on 30 September 2009 and the Justice Committee has been designated lead committee for Stage 1 of the Bill. (The Finance and Subordinate Legislation Committees will also consider the Bill and report to the Justice Committee.) Stage 1 of the scrutiny process is concerned with the general principles of the Bill, although it is also an opportunity to flag up more specific concerns that could be addressed by amendment at later Stages.

The Justice Committee hopes to consider written submissions and to take oral evidence during December 2009 and January 2010 and to report on the Bill’s general principles by mid-February 2010.

In preparation for this, the Committee invites all interested parties to submit views on the Bill in writing. The Committee is interested to hear the views of all organisations, bodies and individuals on the proposals contained within the Bill and their likely impact. Comments do not have to cover all aspects of the Bill, only those proposals which are of interest or concern.

In making a submission, please indicate clearly whether or not you would wish to be invited to give oral evidence to the Committee (on 5 January 2010) to follow up on points made in your submission. If you do wish to give oral evidence, it is essential that your submission is received no later than Tuesday 1 December 2009 so that the Committee can decide, at its meeting on 8 December, whom to invite for the 5 January meeting. (Please note that the Committee may not invite all those who wish to give oral evidence.) If you do not wish to give oral evidence, your submission should be received by the 1 December deadline, if possible, and in any event no later than Friday 18 December.

How to submit written evidence

Before making a submission, please read the Parliament’s policy on treatment of written evidence by subject and mandatory committees. Written submissions should normally be limited to around 4 sides of A4 but, if they need to be much longer than this, they should be accompanied by a short summary of the main points. Submissions should be set out in numbered paragraphs. Where the submission refers to existing published material, it is preferable to provide hyperlinks or full citations (rather than extensive extracts). The Committee welcomes written evidence in English, Gaelic or any other language.

The Committee prefers to receive written submissions electronically (preferably in Microsoft Word format). These should be sent by e-mail to: lsbill@scottish.parliament.uk However you may also make hard copy written submissions to: Justice Committee, Room T3.60 ,The Scottish Parliament, Edinburgh. EH99 1SP Telephone : (0131) 348 5047.

My previous reports on the Legal Services Bill can be viewed HERE

I would encourage anyone who has used legal service in Scotland, to contribute to the Justice Committee’s deliberations on the Legal Services Bill to ensure that a much fairer system of legal services & wider choice of representation is put in place for all Scots. Your input into the debate will ensure the public’s voice is heard against the special vested interests of the legal profession and those who wish to retain market dominance over your right to choose who you want to handle your legal interests.

 

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Holyrood debate reveals civil justice reforms & McKenzie Friends may be a long way off as Scottish Ministers stumble over Lord Gill review proposals

Debating chamberScottish Parliament debated Lord Gill’s Civil Courts Review. Last Thursday’s Scottish Parliamentary debate on the Civil Courts Review recommendations made by Scotland’s Lord Justice Clerk, Lord Gill has left most onlookers and legal insiders with a worry that many of the reforms proposed in the two year review on Scotland’s Civil Justice system, including the implementation of McKenzie Friends & Class Actions, will suffer long delays and in some cases, may almost certainly never be implemented in ways which would help ordinary Scots gain significant improvements in using Scotland’s “Victorian” justice system.

MacAskill tight lippedJustice Secretary Kenny MacAskill spoke of Lord Gill’s criticisms of Scotland’s Civil Justice System. The tone of the debate, opened by Justice Secretary Kenny MacAskill, began on a ‘positive’ note, where high hopes for improvements to Scotland’s Civil Justice system were aired by Mr MacAskill, along with the usual compliments for the legal system as it currently stands (in failure). Mr MacAskill said : “Scots law and the Scottish courts have served us well in civil matters for many years but, last Wednesday, the Lord Justice Clerk, Lord Gill, presented me with the “Report of the Scottish Civil Courts Review”, which is a hard-hitting report and the first system-wide review in modern times.”

Mr MacAskill went on to say : “In his opening paragraphs Lord Gill pulls no punches. He says: “The basic structure of civil jurisdictions in the Scottish courts remains much as it was in the late nineteenth century”.He continues:”changes in the social and economic life of Scotland … have left us with a structure of civil justice that is seriously failing the nation. Reform is long overdue.”

“Those conclusions are unavoidable. Our civil courts now operate in a rights-based, property-owning, consumer-oriented, insurance-reliant society of a sort that would have been unrecognisable a century ago. A reliance on ad hoc reforms has delivered a system of civil justice that is unfit for today’s purposes. Lord Gill states: “The practitioners of 100 years ago would have little difficulty in picking up the threads of today’s courts. The severe summary is that the structure is “seriously failing the nation.”

Scotland’s Justice Secretary Kenny MacAskill opens Holyrood debate on Civil Courts Review :

margo_macdonaldMargo MacDonald MSP asked Kenny MacAskill when justice reforms would begin. Early intervention from independent MSP Margo MacDonald on the question of which areas had been identified by the Justice Secretary for a start, along with comments from the Liberal Democrat Justice Spokesman Robert Brown on points made by Lord Gill that his report ‘was not to be cherry picked and should be dealt with as a whole’, appeared to leave Mr MacAskill grasping for explanations as to what could and could not be done by the current Scottish Government.

Further hints at delays to Lord Gill’s proposals were compounded by questions from Scottish Labour MSP David Whitton, on the subject of McKenzie Friends, which also left Mr MacAskill struggling for an immediate solution to the forty year old McKenzie Friend ‘Scottish problem’ , the blame of which sits squarely with the Courts and Scotland’s legal establishment.

david_whittonStrathkelvin and Bearsden MSP David Whitton asked for introduction of McKenzie Friends in Scotland. David Whitton intervened early on in Mr MacAskill’s opening speech, asking asked the Justice Secretary about the issue of McKenzie Friends in Scotland. Mr Whitton said : “Is one of the issues on which the cabinet secretary thinks we can all reach agreement the introduction of the McKenzie friend process?”

MacAskill tight lipped Justice Secretary MacAskill replied with a less than immediately hopeful statement : “I am more than happy to consider it. Lord Gill commented on that process, as did those involved in providing support through citizens advice bureaux and others. I am more than happy to meet Mr Whitton or his front-bench colleagues to discuss it because we are genuinely open to ideas. We do not insist on any formula. As I said, if we can agree on changes that are within our control, we will seek to do so. If changes are within the domain of others we will encourage them to act, if that is Parliament’s view. Other matters will require to await the outcome of an election and, presumably, the availability of legislative time. The shape of reform will require endorsement and, in some cases, enactment by this Parliament. There will be those in the chamber and beyond with particular interests in the course of reform, whether that involves McKenzie friends or other ideas. They will want to ensure that their interests are protected, be they of the cause or constituency type. That is to be expected and welcomed”

Strathkelvin and Bearsden MSP David Whitton spoke further on the issue of McKenzie Friends for Scotland :

David Whitton MSP said during his speech : “My colleague Cathie Craigie and several other members touched on the need for the introduction of McKenzie friends in Scottish courts. The cabinet secretary knows about my interest in third-party rights of representation. Indeed, only a couple of months ago, the Association of Commercial Attorneys finally earned the right for its members to appear in court, but only after a lengthy process, which at times seemed to involve an obstructive approach from the Scottish legal establishment. It is to be hoped that the recommendation on the introduction of McKenzie friends does not suffer similar delays. That is why I welcome the cabinet secretary’s earlier remarks in response to my intervention.”

He continued : “We must make expeditious progress on Lord Gill’s enlightened recommendation on McKenzie friends. The first thing that can be done is for the courts to grant McKenzie friend rights with immediate effect. There is no need for legislation from the Parliament, as it is within the powers of the courts to grant those rights. That would demonstrate the intent that things are going to change. The public want that change, Lord Gill has recommended it, the consumer associations support it, and it is an equitable and compassionate remedy for some of the access-to-justice restrictions in Scotland.

Mr Whitton’s references to the Association of Commercial Attorneys application for third party rights of representation refers to a long battle by the ACA’s Chairman, Mr Bill Alexander, seeking rights of audience under Sections 25-29 of the Law Reform (Miscellaneous Provisions) Scotland Act 1990, which I have reported on previously, here : Association of Commercial Attorneys Rights of Audience in Scotland

The outcome for the ACA was less than fair, due to the fact they were given a heavily restrictive practicing certificate for construction law only, with their application apparently being fought & lobbied against by the legal establishment at every stage. The ACA’s battle to gain rights of audience may also indicate a long struggle ahead on the issue of McKenzie Friends and other access to justice reforms proposed by Lord Gill.

fergus_ewingFergus Ewing caught out on McKenzie Friends issue. While the debate began on a somewhat positive note, the debate certainly ended on a significant stumble by the Communities Safety Minister Fergus Ewing over the question of McKenzie Friends, who indicated in his replies to questions from David Whitton MSP that a quick implementation of even the basic proposals in Lord Gill’s Civil Courts Review such as allowing McKenzie Friends in Scotland’s courts, was not going to be ‘all that quick’

Community Safety Minister Fergus Ewing stumbles over McKenzie Friends for Scotland after 40 years of existence in England & Wales.

david_whittonDavid Whitton intervened once more on the McKenzie Friends question. During the debate’s closing speech by Community Safety Minister Fergus Ewing, Strathkelvin and Bearsden MSP David Whitton again raised the subject of McKenzie Friends and their sooner rather than later implementation in Scotland. Mr Whitton said : “I bring the minister back to my comments about McKenzie friends. He mentioned that there was wide consultation on their use and varying reports about their effectiveness, but I am sure that he acknowledges that Lord Gill recommends firmly that they should be introduced. Indeed, they already work in jurisdictions south of the border, so I do not understand why we need to delay too long before we implement that recommendation.”

fergus_ewingFergus Ewing replied ‘its not an easy matter to be a McKenzie Friend’. Community Safety Minister Fergus Ewing replied with a less than clear cut answer, leaving many to suspect the battle to implement McKenzie Friends in Scotland is far from over. Mr Ewing said : “David Whitton is right that the recommendation is that McKenzie friends should play a role in Court of Session actions. However, my understanding—my recollection of reading that part of the report—is that there is the caveat that it should be at the discretion of the judge who is handling the case to ensure that McKenzie friends are used appropriately for each case. It is not an easy matter to be a McKenzie friend and, particularly if the case is complex, there could be issues with the appropriateness of using one. I think that Lord Gill also states that, in family actions, it may not always be appropriate for a family member to act as a McKenzie friend because of the potential conflicts of interest.”

By clicking the following You Tube links, you can watch the reaction from Scotland’s political parties and several MSPs to Lord Gill’s recommendations, which for the main offered a broad approval of Lord Gill’s report and hopes that many of the issues raised in the two year appraisal of Scotland’s Civil Justice system can be implemented. The test of course will be whether the Civil Justice reforms proposed in the review will be implemented, and how long implementation will take …

Civil Courts Review debate : Scottish Conservative Justice spokesman Bill Aitken MSP

Civil Courts Review debate : Scottish Labour Justice spokesman Richard Baker MSP

Civil Courts Review debate : Scottish Liberal Democrats Justice spokesman Robert Brown MSP

Civil Courts Review debate : Cathy Jamieson MSP

Civil Courts Review debate : Shirley Anne Somerville MSP speaks on Class Action reforms

Civil Courts Review debate : Nigel Don MSP

On the whole I would say the debate was positive, albeit there are obvious indicators the implementation of Lord Gill’s recommendations will take time, and will be met with obvious & stiff resistance from the legal establishment. Several solicitors and legal insiders I have spoken to since the debate point to many uncertainties over Lord Gill’s proposals, resistance from the legal establishment over changes that many within its ranks do not want, and the inevitable arm twisting of politicians by the likes of the Law Society of Scotland, who although have welcomed Lord Gill’s report, are actually fuming over many of the proposals to give the public greater access to justice, and the chance to bypass Scotland’s hugely expensive solicitors to do it.

I honestly feel that as far as McKenzie Friends go, there will have to be some kind of legislation to ensure that having a McKenzie Friend is a Human Right, and not something at the whim or discretion of the court. The court has after all, kept out McKenzie Friends from Scotland for some forty years, and both the governing bodies of Scotland’s legal profession – the Law Society of Scotland and the Faculty of Advocates, do not even recognise the fact that McKenzie Friends are treated as Human Rights issue in England & Wales, and in many jurisdictions around the world.

If we are to have certainty over the McKenzie Friends question, and many other recommendations of Lord Gill, I foresee the legislative route must be used to force the courts to ensure access to justice for all, rather than access to justice only for those the court feels should have it.

The legal establishment and the courts, will again no doubt argue that we are special in Scotland, and have a peculiarly special legal services market which may be damaged by some of Lord Gill’s proposals including McKenzie Friends. However, the truth is, we are only special in Scotland because the legal establishment actively denies access to justice to those it does not want to achieve access to justice.

 

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