solo the journal winter 2015/2016 - spg – the sole...

solo Win

ter

20

15

/20

16

THE

J

OU

RN

AL

www.spg.uk.com

ANNUAL CONFERENCE 25th – 27th November 2016 WATCH THIS SPACE

• JonathanSmitherstalkstoSPG• EUSuccessionRegulation650-2012• LondonLegalWalk2016• SPGInAction• Cybercrime• TheEverChangingWorldofCosts….andmuchmore

013-Solo - Autumn 2015 NEW.indd 1 19/01/2016 16:30

2 Solo - Winter 2015/2016 www.spg.uk.com

POSITION WANTED

EXPERIENCED LEGAL CASHIERFOR BUSY LAW FIRMS

• No training needed• No office to be provided• No NI or pension to pay• No holidays required• Own computer and software supplied• Never sick and no parental leave taken

...and an SRA Accounts Rules expert IMMEDIATELY AVAILABLE

0845 226 [email protected] www.quill.co.uk/wanted


ItisagreatpleasuretowelcomeyoualltothelatesteditionofSOLO,theSPGJournal.Ithasbeenan

excitingtimeformesincetakingofficeasChairmanofSPGon10thMay2015andIhopethatfromthepagesthatfollow,youwillgetaflavourofjustsomeofwhatSPGhasbeenuptosincethenandsomeofitsplansforthefuture.

IamdelightedtosaythattheAnnualConferencewas,asalways,ahugesuccess.Withathemeof‘GrowingYourPractice’,wellchosenbymypredecessorKemMasinbo-Amobi,wereceivedsomeexcellentfeedbackabouthowpracticalandusefulyoufoundthesessionstobe.PlansarenowwellunderwayforournextConferenceandyourfeedbackhasbeenveryinfluentialinourdecision-making.

MymainintentionoverthecomingmonthsistobuilduponourlevelofengagementwithbothyouasourmembersandwithotherkeystakeholderssuchastheSRA,theLawSociety,theLegalOmbudsman,LSBandotherbodieswhichimpactuponourpracticesonaday-to-daybasis.Ialsowanttoseeusbecomemoreengagedinlobbyingforchangethroughgovernmentdecision-making.Changetakestimebutwearecontinuouslybuildingandstrengtheningourexistingrelationshipswiththosebodiesthroughopenandhonestdialogue.Iwasthereforedelighted,shortlyaftertakingoffice,tohavethepleasureofbeinginterviewedbyNickHilborneofLegalFutures,oneoftheleadingnamesinmarketintelligence,onthefutureforhighstreetfirms.IampassionateaboutthedeliveryoflegalservicesintheheartofourcommunitiesandIseeabrightfutureaheadforsolepractitioners.Youcanreadthefullarticleathttp://www.legalfutures.co.uk/latest-news/there-is-a-huge-future-for-high-street-

firms-new-spg-chairman-says.IwasalsodelightedwhentheLawSocietyreferredtothisarticleintheirownNewsSummaryasitissoimportantthatthewiderprofessionrecognisesjusthowstrongtheSParmofthelegalprofessionremains,despitethehugechangestotheUKlegallandscape.

Wearethrilledthatfollowingonfromalong-standingtradition,LawSocietyPresident,JonathanSmithers,hascontributedtothiseditionofSOLO.IenjoyedalunchtimemeetingwithJonathanon8thSeptember2015wherewewereabletodiscusshowtheLawSocietyandSPGcanworktogetherinservingoursolepractitionermembers,forthegoodofboththeprofessionandthepublic.

Icontinuedwiththethemeofinnovationwhenspeakingon9thJuly2015attheWestminsterPolicyForum,whichisthepremierenvironmentforpolicymakersinParliament,Whitehallandgovernmentagenciestoengagewithkeystakeholdersindiscussionsonpublicpolicyrelatingtothelawandthejudicialsystem.Iwasabletosharehowthesolepractitionerarmoftheprofessioniswell-placedandhighlyskilledtotakeadvantageoftheopportunitiesandnewdoorsopeningforgrowthandinnovativebusinessmodels.

OurpositiverelationshipwiththeSRAhascontinuedwithanumberofventures,whichhaveincludedanaddresstoSRAstaffontheissuesfacingsolepractitionerstoday,allofwhomweregenuinelyeagertounderstandthesesothattheycanensurethattheirpracticesandproceduresareproportionateandreasonableforsmallerfirms.WealsoconsultedwiththeSRAinrelationtochangestotheauthorizationprocess,

andwewerealsodelightedtobeinvitedbytheSRAtoattendtheirannualCOLP/COFAconferenceon14thOctober2015.Thisgaveusanopportunitytomeetwithsomeofyou,ourmembers,whoalsocamealongaswellasenterintothedebatestakingplacethroughoutthedayinthevariousbreakoutsessions.

InSeptember,IalsohadtheprivilegeofspeakingatTheLawSocietyofScotland’sSoleandHighStreetPractitionersConference,wherethedelegatesverymuchlooktoEngland&Walesasabenchmarkforthechanginglegallandscapeanda‘headsup’onhowsolepractitionershavefared.ItwasavaluabletimeofsharingideasandinformationandwewerethrilledtolearnthattherearealsomanyScottishsolepractitionerspractisinginEnglandandWalesandwehopetobuildonthoserelationships.IalsoenjoyedafruitfulandinformativelunchmeetingwithChristineMcLintock,PresidentoftheLawSocietyofScotland.

Wehaveworkedveryhardoverrecentyearstoensurethatthewaywesupportyouremainsrelevantandthishasmeantlisteningtoyou,

FROM THE CHAIRMAN

www.spg.uk.com Solo - Winter 2015/2016 3

POSITION WANTED

EXPERIENCED LEGAL CASHIERFOR BUSY LAW FIRMS

• No training needed• No office to be provided• No NI or pension to pay• No holidays required• Own computer and software supplied• Never sick and no parental leave taken

...and an SRA Accounts Rules expert IMMEDIATELY AVAILABLE

0845 226 [email protected] www.quill.co.uk/wanted

long-standing tradition,

were able to

andinvitedannualconferenceOctober

meet

into

practitionerspractitioners

buildbuild



commissioningformalresearchintoyourviewsaboutusandthenimplementingthechangesnecessarytorespondtoyouasourvaluedmembers,Onthe9thMay2015,attheAnnualConference,weunveiledournewbrandimageandlaunchedournewwebsitewhichwebelieveisaveryuser-friendlyresourceandispackedwithusefulinformation,tipsandguidancetosupportyouassolepractitioners.Youcanfindthewebsiteatwww.spg.uk.com.Itisthequickestwayoffindingoutexactlywhatwearedoingandwhateventsarecomingup.

Wehavealsocontinuedtoactivelyrepresentyourviewsinresponsetoconsultationpapersproducedbythevariousregulatorsanddecision-makerswithinourprofession,toensurethatsolepractitioners’viewsareheardbeforeanychangeisimplemented.Youcanreadmoreaboutourresponsesinthisedition.Asalways,though,wewouldencourageyoutotrytofindthetimetorespondindividuallytoimportantconsultationsthatwillimpactuponthewaythatyoupracticeinthefuture,

OurConveyancingLobbyingGroupisaprimeexampleofhowtangiblechangecanbeimplementedthroughrelationship-buildinganddialogueandyoucanreadmoreabouttheworktheyhavebeendoinginrelationtolenderspanelsinthisedition.

Wearealsoworkingveryhardonyourbehalftosourceexcellentproductsandservicesthatcanhelpsupportyourpracticewhichcaneitherbeofferedtosolepractitionersatpreferentialratesordeliveredinawaythatrecognisestheuniqueneedsofsolepractitionerfirms.

Wereallywanttohelpyoustayaheadofthegameinyourpracticeandsowewanttoensurethatweareofferingyouplentyofopportunitiestoreceiveformaltraining,supportanddevelopmentaswellasmoreinformal,butequallyvaluable,opportunitiestonetworkwithandsupportoneanother.Oneofthehugeadvantagesofsolepracticeistheabilitytobothofferandreceivesupportfromtrustedfellow

solepractitionerswithoutthefearof‘clientpoaching’thatmanylargerfirmsgrapplewith.Thoserelationshipsarebuiltovertime,throughmeetingoneanotheratformalandinformalevents,andparticularlywithinlocalgroups.

AlthoughweholdanumberofourprimaryeventsinLondon,purelytoenableasmanyofourmembersaspossibletocomealong,wearealsoveryawarethatmanyofyouarenotbasedthere.Wewanttoimproveandincreasethenumberofsmallerregionaleventsthatwerun,sopleasedokeepaneyeonourEventsCalendaronthewebsite,andonourregulareshots,whichareintendedtogiveyouthelowdownonupcomingevents,aswellasotherbite-sizedchunksofinformation.Ifyouarenotreceivingoureshotsbutwouldliketodoso,pleasecontactusbyemailingHilary,our Co-ordinator,[email protected].

OurregionalgroupsarethereallifebloodofSPG.Theyaregrowingslowlybutsurely,withnewgroupsdevelopingallthetime.Iknowonlytoowellhowharditcanbetotryandsqueezeyetanotherthingintoouralreadyjam-packedschedules.However,havingrecentlyattendedthegrouprunbyournewLondonRegionalRepresentative,ShakInayat,whichbroughttogetheraninterestingandvibrantmixofcorporate,litigation,familyandprivateclientlawyers,Iwouldstronglyurgeyoutofindoutifthereisaregionalgroupnearyouand,ifthereis,tomaketimetofindoutwhenyournextmeetingisandgetinvolved.Itcouldwellprovetobethebestinvestmentoftimethatyoucouldmakeforyourfirm,foryourselfandforyourfamilyasthesupportyoucangainissecond-to-none.Ifthereisnotaregionalgroupinyourarea,whynotthinkaboutpioneeringanewgroup?ItmaybethatthereareotherSP’sintheareawhomaybewillingtoformateamtorunthegroupandsharetheload.Wearealsocommittedtodoingallwecancentrallytosupportandpromoteourregionalgroups,fromhelpingyouwithfundingtosourcingvenues,speakersandsponsorssocontactus

ifyouneedhelp.Youcanreadmoreaboutregionalgroupsandhowtofindoutdetailsofmeetingsinthisedition.

Wenowhavealmost3,000membersinourLinkedInGroup.Ifyouhavenotalreadydoneso,pleasedojoinandgetinvolvedinthelivelyandvarieddiscussions,whichhaverecentlyincludedtheprosandconsofself-employedconsultancy,whetherreferringclientstoanotherSPposesariskofpoachingandwhethertheBarisbetteratfamilyadvocacythansolicitors!SPGisnowalsoonTwitterandyoucanseeourliveTwitterfeedonthehomepageofourwebsite.Pleasetweetuswithanycomments,viewsorideas.

WewantyoutofeelthatyouarereceivingrealandtangiblebenefitsfromyourmembershipofSPG,sothatyouwillbeencouragedtogetinvolvedinwithusandifthereisanythingatallthatyouwouldliketoseeusdoingonyourbehalf,pleasetellus!

Asalways,IwanttothanktheExecutiveCommitteewhogiveoftheirtimesofreelytofurthertheaimsandobjectivesoftheGroup.ThroughtheindividualareasofexpertiseandexperienceofdifferentExecutiveCommitteeMembers,wenowhaveanumberofspecialistgroups,whichenablesSPGasawholetodrawuponawealthofskillsandaformidableknowledge-base

MydoorisalwaysopenandIthereforeinviteyou,asamember,tocontactmesothatwemaydiscusswhattheSPGcoulddoforyou,goingforward.IhopetobehearingfromyoushortlyandsincerelylookingforwardtoservingbothyouandSPGinmytimeasChair.

[email protected] 8215 0884.

Bestwishes

Sukhjit



HONORARY TREASURERRupert ScraseScraseEmploymentSolicitorsTheCoachHouse, 52aEgertonRoadBristol,SouthGloucestershireBS78HLTel:[email protected]

RupertisanSPinBristolwhospecialisesinemploymentlaw.Heismarriedwith3teenagechildren.MostweekendsheisoutonhisbikeinthebeautifulcountrysidearoundBristolwhichmakeshimaMAMIL–amiddleagedmaninlycra!

SOLICITOR SOLE PRACTITIONERS’ GROUPMeet Your Executive Committee 2015/2016

PAST CHAIRWOMAN/CONVEYANCING LOBBYINGKem Masinbo-AmobiKMASolicitorsSaracensHouse25StMargaret’sGreenIpswichSuffolkIP42BNTel:[email protected]

KemqualifiedasasolicitorinNovember2002underthetutelageofMrMartinMears(formerPresidentoftheLawSociety).Kemhasovertwelveyearscommercialexperiencegainedinavarietyofdemandingandchallengingenvironments.Kem’semploymenthistoryincludestimespentatsomeofthemostprestigiouslegalfirmsinSuffolkandNorfolk.Akeengardener,KemhascompletedtheRHSLevel2CertificateinHorticultureandherotherhobbiesincludereading,travellingandcookingintrue“Nigella”fashion.

CHAIRMAN Sukhjit AhluwaliaAveryEmersonGloucesterHouse335GreenLaneIlford,Essex,IG39THTel:02082150884Email:[email protected]

Havingworkedinsomeofthemostprestigiousbankingandconsultancyorganisation’s,Sukhjitoptedtoprovideamorepersonalonetooneserviceandbelievedthatthiscouldbebestdonethroughhisownpractice.HehasbeenbasedinGoodmayesinIlfordsince2003.Inhisprivatelife,Sukhjitlikestogetinvolvedinanumberofcharitableactivities,workingwithorganisationstoassistpeoplefromallbackgroundsandagesinreachingmoralexcellenceeitherintheirprivatelifeorintheirprofessionalcapacity.Whilstheisquiteashyperson,Sukhjithasbeenpartoftwodocumentariesexploringthechangesthathavetakenplaceinthetraditionalarrangedmarriageprocess.Hischildrenarestillyoungandtakeupagreatdealofhistimebutwhenhedoeshavetimeforhimself,Sukhjitlikestosit,readagoodbookandwatchtheworldgoby.

VICE-CHAIRWOMAN Oluwakemi MosakuTheOldCourthouse1ThePaddockChathamKentME44RETel:[email protected]

KemiisdualqualifiedinbothEnglandandWales,aswellasNigeria.

KemiiscalledtotheNigerianBarasabarristeroftheSupremeCourtoftheFederalRepublicofNigeria.

Sheisasinglemotherofthreeyoungmen,twoofwhomplaysemi-profootballfortwoseparateteamsandthefamilysupportsManchesterUnited.

Inhersparetime,whenKemiisnotoutsupportingherson’sfootballmatches,sheenjoysmusic,readingandcooking.


COUNCIL MEMBERLubna ShujaLegalSwanSolicitors1stFloor,168HamsteadRoadHandsworthBirminghamB202QRTel:[email protected]

Lubnaqualifiedasasolicitorin1992.ShewasapartnerinahighstreetfirminWestYorkshireformanyyearsandthenstartedherownpracticeinBirminghamin2007undertakingmediation,familyandcivillitigation.LubnabecameaCEDRaccreditedMediatorin2005,andisdualqualifiedtoconductbothCivilandFamilymediations.Shehasdoneshuttlemediations(wherepartiesprefernottomeet)andalsotimelimitedmediations(2-4hoursduration).LubnaisalsoinvolvedwithvariousregulatorsandsheChairsanumberofDisciplinary/ProfessionalConductCommittees.SheisaLawSocietyCouncilmemberwheresherepresentstheinterestsofsolepractitioners.

Lubnahasakeeninterestintheatreand,inanotherlife(whichseems many moons ago!), she was a member of a theatrecompany which enabled her to perform in lead roles at theWestYorkshirePlayhouse, theBradfordAlhambra andothertheatresaroundYorkshire.

CONFERENCE NEGOTIATORSushila AbrahamSAbrahamSolicitors290aEwellRoadSurbiton,SurreyKT67AQTel:[email protected]

SushilahaslivedinSurbiton,Surreyforovertwentyyears.Shedecidedtostartherownpracticelocallybecauseshewantedtoofferqualityandcaretothelocalcommunity.Shealsowantedtobefreefrompressuretooverchargeclientsinordertomeettheprofitandbillingtargetssetupbysomeofthebiggerlawfirms.SheismarriedtobarristerMatthew,andtheyhaveonesonwhohasalsoqualifiedasabarrister.Inadditiontobeingwifeandmother,runningherpracticeinSurrey,andherroleontheSPGExecutiveCommitteeasConferenceOrganiser,Sushilaisalso‘CllrSushilaAbraham’,havingbeenelectedasLib-DemlocalcouncillorintheBoroughofKingstoninaby-electioninFebruary2013andthenre-electedinMay2014.Sushilaisalso Vice-PresidentofSurreyLawSociety.Sushilaisaverycommunitymindedpersonandhasalsoruncookeryclassesforlocalschoolchildren,whichshecalled“Suzie’sKitchen”,believingintheimportanceofteachinglifeskills.

COUNCIL MEMBERIan LithmanLithman&Co3LakisCloseLondonNW31JXTel:[email protected]

Ianisaretiredgeneralpractitionerwhocan’tswimbutisintoboatsandmotorcruisersinparticular.Ianisalsoaloverandcollectorofinexpensiveartandantiquesandwhointhenextlifewillbeaninteriordesignerbutneveraminimalist!IanremainsontheRollasasolicitorandenjoyed52yearsofthevarietyandexcitementofprivatepracticeuntiltheRegulatorsandtheGovernmentkilledthejoyofit.

WEBSITE CO-ORDINATOR Karen PurdyPurdysSolicitors26PeppersladeCambridgeCB224XTTel:[email protected]

HavingreadLawatCambridgeUniversityandcompletedhertrainingin1999,KarensetuphernichePrivateClientfirmin2003.Karenaskedheralmost-5-year-oldsonwhatshedoesinhersparetime.Hesaid“whatsparetime?”.Thataboutsumsitup!Whensheisnotworkingoronvariouscommittees,Karenenjoysyoga,lookingatthesaxophonethatsheissupposedtobelearningandsheoccasionallypaints,playsthefluteordoessomegardening.KarenalsospendsfartoomuchtimelookingatRightMove!Herfavouritethingtodoistospendtimewithherlovelyhusbandandson.

INTERNATIONAL ARM Nicholas WoolfNicholasWoolf&CoSolicitors87ChanceryLaneLondonWC2A1ETTel:02072426018Email:[email protected]

Nickwasadmittedasasolicitorin1979andwasapartnerintwofirmsintheLondonareabeforestartinghisownpracticeintheWestEndin1987.In2011hemovedontocreatehisnichecommercialandfamilypracticeinChanceryLane.HeisaMemberoftheSolicitorsFamilyLawAssociationandhastrainedotherprofessionalsonfamilylawmattersandmoneylaundering.Nickismarriedwithfourchildrenandhehasarangeofhobbieswhichincludemusic,tennis,readingandphotography.

HON. SECRETARYClive SuttonCliveSuttonSolicitor3TheOldPrintWorks85bHighStreet,LymingtonHantsSO419ATel:[email protected]

ClivespecialisesinlitigationandhasbeenasolepractitionerinLymingtoninHampshiresinceleavingapartnershipin1998,coveringmostaspectsofprivateandcommercialwork.HisotherinterestsareasChairmanofhislocalAmenitySocietyinLymingtonandtrusteeoftheNewForestCentreMuseuminLyndhurst.InthepasthehasservedasChairmanofthelocalCitizensAdviceBureauandchurchwardenandintheearly70sasaresidentmagistrateintheSeychelles.ClivehasbeenactivelyengagedonbehalfofSPGoverthepast10years.HewasChairmanoftheGroupin2003/2004andhasbeenHonorarySecretarysince2007.Clivefeelsthat,withthebenefitofloyalstaff,solepracticehasbeenthemostrewardingpartofhiscareerandthesolepractitionersgroupexecutivecommitteeoneofhismostrewardingactivities.



SRA LIAISON LEAD David Leigh-HuntDavidLeigh-HuntSolicitorsBedfordHouse76aBedfordStreetLeamingtonSpa,WarwickshireCV325DTTel:[email protected]

DavidholdsthedegreeofLLMfromLondonUniversityandisaFellowoftheCharteredInstituteofArbitrators.Heandhiswife(whoisalsoasolicitor)haverunasmallPracticefor18yearsengagedwiththecommunityinLeamingtonSpa.Themajorityoftheirworkisreferralbased.

Theyhavefouradultchildrenallofwhomhaveprofessionaloccupations,theeldestisacorporatesolicitorinLondon.

David’smainhobbyisinputasamemberofaBoardofTrustee/DirectorsofacharitablecompanyconnectedwiththeartswhoseprinciplebusinessisrunningaprivatemuseuminRome.

Hamish McNairMcNair&CoEBCHouse,RanelaghGardensLondonSW63PATel:[email protected]

HamishisbasedinFulham,London.Havinginitiallyspecialisedincopyrightandtrademarkwork,bothintheCityandNewYorkCity,hispracticenowincludesconveyancing,willstrustsandprobate,aswellaslitigation.Marriedwiththreechildren,whenHamishisnotintheofficeorinvolvedinSPGmattersheenjoysopen-airswimming,sailing,overnightbikerides,andalsohasapassionforthetheatre.

POLITICAL LOBBYING Tahira ShaffiMikhaelLaw197RochdaleRoadBury,LancsBL97BBTel:01612226092Email:[email protected]

Tahirahasbeenapracticingsolicitorforalmost16years.Shesetupasasolepractitionerafterbeingmaderedundantin2010.TahiraisafairlynewmemberoftheSPGCommitteehavingjoinedjustover18monthsago.ShehasfoundSPGtobeanextremelyhelpfulpointofcontactonsomanyissueswhichareaffectingthewholeprofessionwhilstpayingparticularattentiontotheneedsofSolePractitioners.Tahiraunderstandsthatbeingasolepractitionercanbealonelyexperiencebutnetworkingwithlike-mindedindividualsmakesallthedifference.SheisgladthatthereisanindependentbodyoutsideoftheLawSocietythatisworkinghardtolookafteritsmembersinterests.TahiraisbasedinBury,GreaterManchesterwheresheliveswithherhusbandandteenagesonwhohasjuststartedcollege.Shehaslotsofinterestsoutsideofthelawincludingpolitics.TahiraisanLEAschoolgovernorandhasstoodasacouncillorpreviouslyasshepassionatelybelievesindoinghercivicdutyandputtingsomethingbackintothecommunity.ItisalottojugglewithbutTahiraisproudoftheworkoftheSPGbecauseshebelievesinbetterrepresentationforSolePractitioners!

CHAIR – PRACTICE SUB COMMITTEE Martin T SmithOldCoachHouseOldRoad,LinsladeLeightonBuzzard,BedsLU72RBTel:[email protected]

Martinwasadmittedasasolicitorin1975after5yearsarticlesandacquiredhissolegeneralpracticeinLeightonBuzzardin1985wherehehaspractisedeversince.MartinhasbeenamemberoftheSPGNationalExecutiveCommitteesinceitsinception(hebelievesthatonlyIanLithmanisstillan“original”).MartinliveswithhispartnerinLeightonBuzzardandwhenheisnotworking,heenjoysspendingtimewithher.Theyshareanumberofhobbiestogether,includingstampcollecting.

SOLO EDITORIAL TEAM Tina AttenboroughAttenboroughLawLimitedHawthorns,TheClose,Derby,DE222ADTel:01332558508Email:[email protected]

TinaisanEmploymentLawspecialistbasedinDerbyandaftermanyyearsinprivatepracticeacrosstheEastMidlands,achievedherlifelongambitionin2010,tobecomeaSolePractitionerandshestillthoroughlyenjoysthefreedomandbenefitsthisbringsher.HavingqualifiedasaWorkplaceMediatorin2012andaCommercialDisputeMediatorin2013,sheisfindingthisworkequallyasrewarding.Tinaismarriedwithateenagedaughterwithwhomshehasrecentlytakenupyoga,butalsolovestoplanandenjoytheatretrips,travelandentertainingfamilyandfriends.Aspartofherroleinthecommunityshefeelsitimportanttogivesomethingbackandsoinadditiontoothercommitteework,shementorsLawStudentsattheUniversityofDerbyandhasbeenaschoolgovernorsince2003,inbothPrimaryandSecondarySchools.CurrentlysheisViceChairatAllestreeWoodlandsAcademySchoolinDerby.Sheishowever,unabletofunctionuntilshehastakenhercockerspaniel(andofficecompanion),Montyfora5kruneachmorning.


Susan CarterRossCarterFairhaven,RhinefieldRoadBrockenhurst,HantsSO427SQTel:[email protected]

InherlimitedsparetimeSueenjoyswalksinthecountryandcatchingupwithfriends.SheisanearlyriserandenjoyslisteningtoFarmingTodayandotherradioprogrammes.Shehasfamilynearbyandademandingdog!



A THANKYOU TO JULIAN TAYLOR 9SPG HAS A NEW HOME! 9SPG TOP-TABLE EVENT 10SPG ANNUAL CONFERENCE 2016 10IT’S A LAWYER’S LIFE.... 11-12ADR – WHAT IS THE CURRENT POSITION FOR SPS? 12HOW SPG CAN LEAD THE WAY IN INSPIRING SOLICITORS TO REGENERATE OUR SOCIETY 13-15COUNCIL MEMBER’S REPORT 16‘TO INHERIT OR NOT TO INHERIT? THAT IS THE QUESTION’ 18-21FIX THE ROOF WHILST THE SUN SHINES 22SOLE PRACTITIONERS AND REGULATORY REFORM – AN INSIGHT FROM THE TOP 23ACCOUNTS RULES PHASE 3 24REGULATION ROUND-UP 25NEWS RELEASE FROM NICHOLAS WOOLF & CO 25LONDON LEGAL WALK 2016 27TRAVEL TO INDIA - IT’S CLOSER THAN YOU THINK 28-29CONVEYANCING LOBBYING GROUP UPDATE 32REGIONAL GROUPS 33-34CYBERCRIME 35-38SCOTLAND THE BRAVE 39THE EVER CHANGING WORLD OF COSTS 40-41INHERITANCE TAX PLANNING 42-43TALKING TO THE SRA 44-45THE INVISIBLE 46-47TILL DEATH US DO PART? 48-50SOCIAL ENGINEERING: HOW CAN WE COMBAT THE FRAUDSTERS? 51SPG IN ACTION 52-87WHAT ON EARTH IS AN HONORARY SECRETARY ANYWAY?! 79

Contents

SOLO JOURNALContributionstoSOLOarewelcome.EditorialorAdvertising–contact details are available on SPG’s website www.spg.uk.com.Editorial Board –HilaryUnderwood,SukhjitAhluwaliaandOluwakemiMosaku.ViewsexpressedinSOLOmaynotbetheviewsofSPG.SOLOiscopyrightedtoSPG.

DISCLAIMERThearticlesfeaturedinSOLOarenotasubstituteforlegaladvice.Informationmaybeincorrectoroutofdate,andmaynotconstituteadefinitiveorcompletestatementofthelaworthelegalmarketinanyarea.Articlesarenotintendedtoconstituteadviceinanyspecificsituation.Youshouldtakelegaladviceinspecificsituations.Allimpliedwarrantiesandconditionsareexcluded,tothemaximumextentpermittedbylaw.

INTERNATIONAL ARMPenny RabyPennyRaby&CoHarmonyHouse7-9ChurchStreetPershoreWorcestershireWR101DTTel:01386555114Email:[email protected]

PennyhasbeenanSPspecialisinginfamilylawfor20yearsworkingwithherhusbandMike,aForensicAccountant,ondivorcecasesinvolvingbusinessandcomplexassetandincometracing.ShewonWorcestershireFamilyLawyeroftheYearAward2014andhasbeennominatedfortheNationalFamilyLawMagazineFamilyLawFirmoftheYear2015.Shehasappearedonradioandtelevisionand,withMike,hastouredtheirnetworkingpantomime“SnowWhiteandtheSevenSmallBusinessPeople”internationally.

SPG CO-ORDINATOR, EDITOR OF SOLO, LEGAL AID, LOCAL GROUPSHilary UnderwoodHAUnderwoodSolicitorsUnderwoodHouse,32BroadwaySheerness,KentME121TPTel:[email protected]

HilaryoriginatesfromNorthamptonshireandqualifiedasasolicitorin1999.Shesetupherfamilylawfirmin2003inKent,focusingonlegalaidclientsandprimarilyspecialisinginchildrenlaw.HilaryisnowtakingupanexcitingnewroleasSPGCo-ordinatorandislookingforwardtohelpingSPGrepresentandsupportourmembers.Inhersparetime,Hilarylovestoreadanditisherdreamtoonedaycompletehernovel(whilsttravellingaroundtheworld)!Shelovestospendtimewithfamilyandfriends,andenjoysnothingbetterthananeveningoffood,laughterandagoodmovie.


A Thankyou to Julian Taylor

Julianworethismantelwithcommitmentanddedicationandweareextremelygratefultohimforhisvaluableinputandwisdomoverthoseyears.WeshallmisshimenormouslyandwouldliketowishJulianandhisfamilyeverysuccessandhappinessinthefuture.Wehopeyou

InthiseditionofSOLOwewantedtosayahugethankyoutoourformerHonorary

TreasurerJulianTaylorandtohonourhimforhismanyyearsservingontheSPGExecutiveCommittee.Juliansuccessfullymergedhispracticeon1stJuly2015whichmeansthatwehavehadtosaygoodbyetohimontheCommittee.

JulianservedfirstingeneralasanExecutiveCommitteeMemberandthenforafurthereightyearsintheroleofHonoraryTreasurer,arolewhichisbothdemandingandtime-consuming,aswellascarryingagreatdealofresponsibility.

willhavemoretimetositonthebeachinItaly,yoursecondhome!

Weare,however,alsopleasedtoannouncethatRupertScrase,ExecutiveCommitteeMemberandaformerChairmanoftheGroup,hasagreedtoreplaceJulianintheroleofHonoraryTreasurer–abravethingtodo!ThankyouRupert,wehavenodoubtthatyouwillcontinuetobeagoodstewardoftheGroupfunds!

SPG Has A New Home!SPGisthrilledtoannouncethatwehaveanew home. Ournewofficeaddressis:

53–59ChandosPlaceCoventGardenLondonWC2N4HSTelephone: 0208 618 2247




Thisisaneventnottobemissed.OnSaturday 14thMay2016,youwillbeinvitedtocomeandsitattheTopTableandjointheheadsofourkeyregulatoryandrepresentativebodies,includingtheSRA,theLawSociety,LegalServicesBoardandLeO.

Thiseventisintendedtoofferyoutheuniqueopportunitytochatface-to-facewiththosewhoplaysuchastrategicroleinshapingthefuturelandscapeofourprofession.

This daytime event will be followed by an informal dinner with networking opportunities.

Furtherdetailswillfollow.

SPG TOP-TABLE EVENT 14TH MAY 2016

SAVE THE DATE

SPG ANNUAL CONFERENCE 2016 25TH – 27TH NOVEMBER 2016 “THE PRACTICE OF EXCELLENCE”

Anexcellentpracticewillalwaysthrive,despitethechallengeswefaceassolepractitioners.Soourthemeforour2016AnnualConferenceisfocuseduponhelpingyoutotakeyourpractice

tothenextlevel,sothatyoustandoutheadandshouldersaboveyourcompetitors.

Wewillalsodoafairbitofcelebratingsincethiswillalsobeour 21stAnnualConference.Soputthedatesinyourdiarynowandmakesureyou’reapartofit.

Watchthisspaceforfurtherdetailsaboutourexcitinglocationandvenue.



It’s a Lawyer’s life.... with Jonathan Smithers, President of the Law Society

4. DescribeatypicaldayinthelifeofJonathanSmithers

ThePresidencybringsnewchallengeseverydayandtherereallyisnosuchthingasatypicalday.Icanbemeetingseniormembersofthejudiciaryorpoliticiansinonemoment,andchairingameetingorspeakingataneventthenext,sometimesallofthoseandmoreinoneday.

5. Whatwouldyousayhasbeenyourgreatestchallengeinlife?

Ihaveworkedinmyfirmforover30years.Startingasanarticledclerkin1984,andnowbecomingseniorpartner.DuringthattimeIhaveexperienced,asabusinessowner,twosignificantrecessions.Ineachcasethechallengehasbeentomakesurethatlong-termvisiontrumpsshort-termnecessity,easytosaybutverytoughtodo.

6. Whathasbeenyourproudestmoment?

Fromaprofessional’sperspectivetakingofficeasthePresident,knowingthatIwillbeabletorepresentthelargestprofessionoftheleadingorganisationofthebestjurisdictionintheworld.

In this edition, SPG asks Jonathan Smithers, Law Society President:

1. Whatmadeyoubecomealawyer?

IbecameasolicitorbecauseIwasinterestedinhelpingpeopleandwasfascinatedbythewayinwhichthelawenablessocietytofunction.

2. Ifyouhadn’tbecomealawyer,whatwouldyouhavedoneinstead?

BeforeIqualifiedIwasofferedajobasatelevisionresearcher.Iwastemptedtotakeitbutwaspersuaded,bymyFather,thatbeingqualifiedfirstbeforejumpingintoanotherareawouldbesensible.

3. Doyouwishyouhad?!

Ithinkweallhavemomentswhendealingwithastressfultransactionweponderwhetheranotherpathwouldhavebeenabetterchoicebut,forme,nowasPresidentoftheLawSociety,IamgladItookhisadvice.

4.

Theeveryas

atthose

5.

TheLawSociety,ChanceryLane:Panoramahttps://www.flickr.com/photos/chough/6269521192/ byTomGoskarhttps://www.flickr.com/photos/chough/islicensedunderCCby2.0https://creativecommons.org/licenses/by-nc-sa/2.0/



7. Howdoyoumanagetorelaxawayfromwork?

ThePresidencyisasixorsevendayaweekjobbutIamstillhopingtosingwithmychoironceortwicethroughouttheyear.

8. Isthereanythingstilllefttodoonyour‘bucketlist’?

ThismaysoundtritebutIwouldnotdefinemyselfbythethingsthatIhavenotdone,ratherthosewhichIhavebeenabletodo.HavingsaidthatthemoreoftheworldIseethemoreIrealisethereissomuchmorestilltosee.

9. Whatmakesyoureallyangryandreallyhappy?

Peoplebeinglazyandachievinglessthantheycanorbeingundulynegativemakesmecross.Converselypeoplewithenergydirectionandfocusandapositiveattitudewillalwaysgetmyvote.

10.Ifyoucouldchangeanythingaboutyourlife,whatwoulditbe?

WhywouldIwanttochange,Ihavethebestjobintheworld!

11.Howwouldyouliketoberemembered?

Assomeonewhotriestomakeadifference.

12.Whatadvicewouldyougivetosolepractitionerstoday?

Beproudofyourprofession,beproudoftheethicsbywhichyouliveandpractice.Youhavechosenabusinessmodelwhichmayhavemorechallengesthanothersbutifitgivesyouthemotivationandtheflexibilityyouneedandwantthenyoushouldsucceed.

ADR – WHAT IS THE CURRENT POSITION FOR SPS?“WearenotgivinguptheambitiontobecomeanADRentitybutwedowanttoexplorealternativeapproachestodoingso.Wewilldothisoverthenextsixmonths.”

TheOLCalsoconfirmedthattheLegalOmbudsmanschemewillordinarilyacceptcomplaintsthathavefirstbeenconsideredbyanADRentity,wheretheyareotherwisewithintheOmbudsmanscheme.Furtherguidanceonthiswillfollow.

Thecurrentpositionforpractitionersisthat,witheffectfrom1October2015,attheconclusionoftheirinternalcomplaintsproceduresolicitorsmustprovidetheirclientswithinformationontheLegalOmbudsmanasthestatutorycomplaintsschemeforsolicitorsandinformtheirclients,onadurablemedium:-

• thattheycannotsettlethecomplaintwiththeirclient

• ofthenameandwebaddressofanADRapprovedbodywhichwouldbecompetenttodealwiththecomplaint,shouldbothpartieswishtousethescheme

• whethertheyintendtousethatADRapprovedbody

ThelistofapprovedproviderscanbefoundontheCharteredTradingStandardsInstitute(CTSI)websiteathttp://www.tradingstandards.uk/advice/ADRApprovedBodies.cfm

TheLegalOmbudsmanconsultationonproposedSchemeRulechanges,whichwouldbe

necessaryfortheLegalOmbudsmanschemetocomplywiththerequirementstobecomeacertifiedAlternativeDisputeResolutionentity,closedon2ndNovember.TheresponseswereconsideredbytheOfficeforLegalComplaints(OLC)on9thDecember2015butitdecidedthatitwillnotproceedwithanapplicationtobecomeanADRentitybasedonthechangestoitsschemerulesonwhichitconsulted.

IthasdecidedinsteadtoexplorewhetherthereisanalternativeapproachtooperatingasanADRentity,suchasintroducingaparallelschemeorofferingnew“alternative”disputeresolutionservicesthatbettermitigatetheriskandissuesithasidentified,andthathavebeenraisedbystakeholders.

Itfurtherconcludedthat,giventhattheorganisation’skeypriorityatpresentistoimprovetheefficiencyandqualityofitsstatutoryscheme,itisnottherighttimetotakeontheadditionalrisksandoperationalchangesthatwouldarisefromproceedingwiththeschemeruleschangesasproposed.

ChairSteveGreensaid:“Wearegratefultoallthestakeholderswhorespondedtotheapplication.Theseresponseshaveenabledustogivefullandthoroughconsiderationtohowweshouldproceed.

TheLawSocietyhassuggestedthatsolicitorsusethefollowingtextwhennotifyingtheirclients:-

“We have been unable to settle your complaint using our internal complaints process. You have a right to complain to the Legal Ombudsman, an independent complaints body, established under the Legal Services Act 2007, that deals with legal services complaints.

You have six months from the date of this (our final) letter in which to complain to the Legal Ombudsman.

Legal Ombudsman PO Box 6806 Wolverhampton WV1 9WJ

Telephone: 0300 555 0333 Email address: [email protected] Website: www.legalombudsman.org.uk

Alternative complaints bodies (such as…………………) exist which are competent to deal with complaints about legal services should both you and our firm wish to use such a scheme.

We [state whether you do or do not] agree to use [include name of scheme].”

TheLawSociety’spracticenotecanbereadathttps://lawsociety.org.uk/support-services/advice/articles/changes-to-client-care-information-and-leo-time-limit/



HOW SPG CAN LEAD THE WAY IN INSPIRING SOLICITORS TO

REGENERATE OUR SOCIETYAs ‘Contact the Elderly’ celebrates its Golden Jubilee, Trevor Lyttleton MBE, a former sole practitioner, founder and Chairman of ‘Contact the Elderly’ shares with us a little of the history and work of the

charity and explains how sole practitioners can make a difference where it really counts.

Letmeexplainwhatisinvolved,wherewecomefromandwherewehopetogo.

1. What prompted me to start Contact the Elderly

IwasmotivatedtostartContacttheElderlyasaSolicitorinmy20’sby:

i. thechildhoodmemoryofasmallfaceofanoldladylookingdownfromthewindowoppositeourhomedayinanddayout,seeminglywithnothingtodoandnoonetotalkto.Theimagemadeanindelibleimpressionandhauntsmestill

ii. Bycontrastthelively,vibrantimageofmyremarkableGrandmothertaughtmetheelderlycanbemuchmorefunthanmostofusrealizeAgreatoff-the-cuffspeaker,funny,mischievous,sheadoredtellingjokesandstoriesaboutherWelshchildhood.Shedevouredracybookslike‘ForeverAmber’declaringthemtobe‘absoluterubbish’assheavidlyturnedeachpage.

iii. Bycontrastagain–anoldladyImetinashopinmy20’s,whotoldmeshelivedaloneandhadnofriends,familyorelectricity,inthecentreofLondon,withnothingtolookforwardto.

After graduating from Kings College, Cambridge, Trevor Lyttleton MBE went on to practise as a solicitor at Freshfields before setting up his own firm as a sole practitioner. He set up the charity ‘Contact the Elderly’ 50 years ago to encourage the young to extend a regular hand of friendship to lonely older people. Trevor is also Patron of Solicitors for the Elderly.

After leaving Cambridge in 1958, I joined Freshfields practised law, composed music and set up Contact the Elderly, the National Charity I still chair, 50 years ago to encourage the young to extend a regular hand of friendship to lonely older people at tea parties nationwide.

I retired after spending most of my career as a sole practitioner and have greatly appreciated the guidance of SPG. I would therefore like nothing better than to announce at Contact the Elderly’Golden Jubilee’ celebrations this year that SPG is taking a lead in encouraging Solicitors to give just a little time to make a huge difference where it really counts.

Thesecontrastinginfluencescombinedtoinspiremetoencouragetheyoungtohelptheoldandlonelywhichremainsourmissionhalfacenturylater.

2. How we started

Ipersuadedsomefriendstohelpbringfunintothelivesoflonelyoldpeopleinourareain1965.

Therewasnothinghighandmightyabouttheidea.Wesimplywantedtogetawayfromthe‘holierthanthou’/‘DutytoSociety’approachtovoluntaryworkandhavefunmakingnewfriendsyoungandoldalongtheway.

IwasshockedtolearnthescaleoftheproblemfromthelocalWelfareAssociationwhotoldmetherewerethousandsofelderlywholivedaloneinMarylebone.Butatleasttheyknewwhotheywere,whichismorethancanbesaidformanyLocalAuthoritiestoday.Indeed,haditnotbeenforthecareandforesightofaveryspecialsocialworker,ContacttheElderlymightneverhavetakenoffatall.Shetookimmensetroubletoselect12elderlypeoplewhowouldbenefitfromouractivities,providingthumbnailsketchesoftheirindividualcharacteristics,backgroundandspecialneeds.

Aboveallshegavemeinvaluableadvice,warningmethat,oncewestartedtakingouttheelderlywemust


3. Expansion and development

Thebenefitsinimprovedmobilityandwell-beingmotivatedustosetupmoreContacttheElderlyGroupsandwehaveexpandedacrossLondonandnationwideoverthelast50years.

• ContacttheElderlyistheonlynationalcharitysolelydedicatedsinceinceptiontotacklinglonelinessamongstolderpeopleinthiscountry.

• MotherTeresasaid“Being alone and unwanted is the world’s greatest disease”and,thankstoourgreatstaffand7300volunteersnationwide,ourSundayafternoonteapartiesmakethedifferencebetweenmiseryandhappinessforisolatedolderpeople.

• Oursimpleactoffriendshiphasresultedinoveramillionfacetofaceindividualfriendshiplinkswithlonelyolderpeoplesincewestartedin1965.

• Weprovide54000annuallife-enhancingfriendshiplinkswithlonelyolderindividuals

• Ourregularfriendshiplinkssavetaxpayerfundsbyreducingby25%olderguests’callsonGPsandNHS.

• ContacttheElderlyvolunteersmeettodo,nottotalkaboutdoing.Theyknowwhatisexpectedofthemrightfromthestart,andunderstandtheircommitment

• Ourvolunteersarehighlymotivatedandstaywithuslonger.AtarecentAGM,ContacttheElderlyvolunteersreceivedLongServiceAwardsof10,20,30,and40plusyearsofdedicatedservice.

Contact the Elderly is effective because:

• Sundayafternoonisacknowledgedtobetheloneliestdayoftheweekforolderpeoplelivingalone.

continuetodosoand‘Never let our old people down’

Thisbecamethecornerstoneofouractivitiesandouronlyruletothisday:we never let our old people down

Toensurecontinuingcommitmentwehavestucktothesimpleideaofmonthlyrenewalsoffriendship,sovolunteersknowwhatisexpectedandhavealimitedtimecommitmentof:

• anafternoonontheloneliestdayoftheweekonceamonthforvolunteerdrivers;

• onceortwiceayearforVolunteerhostswhoonlyneeda‘warmheart,alargeteapotandadownstairsloo’

Atourfirstteapartyweknewimmediatelyfromthefantasticrapportbetweenyoungandoldthat,inMarkTwain’swords,wecould

“cheer ourselves up by trying to cheer up somebody else”bycreatinghappiness,havingfunandenrichinglonelylivesandourownatthesametime.

AcourageousIrishlady,Lilian,withlegsinirons,afterthatfirstouting,taughtusthePowerofface-to-faceContactinimprovinghealthandovercomingdisabilities.Despitebeingpreviouslyimmobilised,afteronlytwoorthreeoutings,sheamazedusbyclimbingaflightofstairstoateaparty.WithinayearherRCpriestpersuadedhertoflytoLourdesinsearchofamiracle.Onherreturnsheproudlyannouncedthathermiraclewastobeabletogetonandofftheplane.

• ContacttheElderly’sgroupsoperateonSundaywhenmostcommunityservicesforolderpeoplearenotavailable.

• Thebenefitsextendbeyondtheone-Sunday-a-monthgathering,withthelongtermnatureofgroupscreatingrealandlastingfriendshipsbetweenyoungandold.

• Ourmodeladdressestheemotionalneedsofolderpeoplewhowishtoremainindependentintheirownhome,butwhosediminishedmobilitymakesitimpossibleforthemtomaintainregularsocialcontact.

• Oursurveysshowthatoursimpleactoffriendshipmakesourolderguestsfeelhappier,lesslonelyandpartofthecommunityandhasenabledthemtomakefriendswiththevolunteers,andotherguests

Wehavereceivedawardsincluding:

• JohnLewisCharityoftheYear2009

• QueensDiamondJubileeAwardforVolunteering2012

• FinancialConductAuthorityCharityoftheYear2014

Key Golden Jubilee Challenges

But,despiteourachievementsafter50years,wedonotrestonourlaurelsincelebratingourachievementsinourGoldenJubileeyear.Wehavesetambitioustargetstohelp usmeetthegrowingchallengesaheadinaperiodofincreasedlongevityandausterity.

University and Schools

InourGoldenJubileeYearweaimtoencouragemoreyoungpeopletobecometheheroesoftodayandambassadorsoftomorrow,intacklingoneofthegreatestproblemsofourtime.

WehavelaunchedaUniversityChallengetoencourageUniversities

“We never let our old people down”



Medical support

WeareestablishingaPartnershipwiththeRoyalFreeHospitalandencouragingMedicalPracticestofollowtheleadofafantasticGPinLiverpoolwhohasstartedteapartiesinhispractice.

SPG and Sole Practitioners

SPGcanhelpusenlistsupportfromSolicitorsadvisingtheelderlytobecomemuchmoreinvolvedinsocialcare,beyondtheirstrictlegalremit,e.g.

• remembering,despitetimepressures,tospendatimewithoutthemeterrunningwithalittlechatthatisoftenmoreimportanttoisolatedelderlythantheiradvice(AskanydelivererofMealsonWheelswhowillconfirmthat,moreoftenthannot,theyrelishthechatmorethanthemeals.

• visitingCourtofProtectionclientspersonallyratherthandelegatingthelinkswithfrailandvulnerableelderlytothemostjuniorarticleclerk.

SPGcanmakeahugedifferencebyencouragingsolepractitionerstoremembertheoldladylookingdownfromthewindowwaitingforsomeone

andstudentsacrossthecountrytotacklelonelinessinoldagebysettingupContacttheElderlyGroups,tomatchoursuccessfulContacttheElderlylaunchesatLiverpoolHope,DurhamandLoughboroughUniversitiesinthelasttwoyears.

State of Emergency

WedeclaredaStateofEmergencyonlonelinessinJune2014,announcingthattheproblemoftheneglectedmillionolderpeoplehadreachingbreakingpoint.

WeremaindeeplyconcernedbyGovernmentdelaysinsupportingface-to-facebefriendersoftheelderlysincetheHealthSecretary,JeremyHuntMPrightlydescribedtheneglectedmillionelderlyinOctober2013,as“aNationalDisgrace.”WehopetheGovernmentwillrespondtoourrequestfor£1millionfundingendorsedby91MPsacrossparliamentinanEarlyDayMotion.Wehopethiswillboostour‘IFNOTNOW,WHEN?’PowerofContactCampaigntocreateface-to-facehappinesslinkswithmanymoreoftheneglectedmillionolderpeople.

Weknowwehaveatriedandtestedsolution.Wehavebeendeliveringitfor50years.Itisassimpleashavingsomethingtolookforwardto,afriendlyface,humancontact,acupofteaandachat,orinthewordsofoneolderguest“At last I have something to live for!”

Wealsoknowthereisanepidemicofneedforourserviceandwearefrustratedthatwecannotdomoretohelpasmanyolderpeopleonourwaitinglistsandmanymoreoftheneglectedmillionwecannotreachwithouthelp.

totakenoticeandcare,andhelpusfulfilourGoldenJubileetargetbydoublingthenumberofourhappinesslinkswithmanymoreofthemillionlikeherwhoremainofftheradarofsupport.

InconsideringlegaciestheyshouldbearinmindthatContacttheElderlyisverycost-effectiveandeverypoundwereceiveismultipliedseveraltimesbythefreecontributionofour7300volunteersnationwide.Agiftorlegacywillthereforegoalongwaytoachievetheseaimsandfindmorevolunteerswhoonlyneedtogivealittletime:

• threehoursonaoneSundayafternoonamonthasavolunteerdriver;or

• onceortwiceayeartohostateaparty.Allyouneedisa‘warmheart,alargeteapotandadownstairsloo’andthevolunteerswillhelpyouserveteaandpassthesandwiches.

IhopeSPGmemberswillbeencouragedtosupportournationalchallengebyjoiningourteapartygroups,orhostingteapartiesforourlocalGroupsintheirareaandencouragingfinancialsupportinhelpingusinalleviatinglonelinessinoldage-oneofthegreatestproblemsofourtime

TrevorLyttletonMBEFounderandChairmanofContacttheElderly

http://www.contact-the-elderly.org.uk/

“At last I have something to live for!”

“…remembering, despite time pressures, to spend a time without the meter running with a little chat that is often more

important to isolated elderly than their advice…. ”




effectivelyandefficiently.TheCouncilalsoconfirmedthatareviewwillbeundertakentoestablishwhethertheSociety’sgovernanceisfitforthepurposeofdeliveringtheagreedstrategy.TheCouncilalsoapprovedthebudgetsfortheLawSociety,theSolicitors’RegulationAuthority,andthesharedservicesprovidedbyCorporateSolutions.ThisconfirmedthedecisioninJulythatsolicitors’practisingcertificatefeesareunchangedfromlastyear.

President’s UpdateThePresident,JonathanSmithers,presentedanupdateonhisfirst100daysinoffice,mentioningmeetingswithmembersacrossthecountryaswellaswelcominginternationaldelegatesfortheOpeningoftheLegalYear.Hehasbeenproactivelyusingsocialmedia,includinghisTwitterchannelandthreemonthlyvideoupdates,toimprovecommunicationandstakeholderengagement.InSeptember,helaunchedtheLawSociety’sbusinessandhumanrightsengagementprogrammeinLondonandCardiff,aswellasaddressingtheissueinhiskeynotespeechesattheOpeningoftheLegalYearandtheInternationalAssociationofYoungLawyers.Hehasalsousedpublicplatformstopromotethevalueofthelegalservicesmarkettothewidereconomy,andtosupporttheSociety’swidercampaigntoraisetheprofileofpro bonoworkundertakenbysolicitors.Thepartyconferenceseasonwasachancetoengagewithdecisionmakersonarangeoftopics,notablyaccesstojustice.

Criminal Legal AidCouncilheardabouttheverysubstantialcontinuingconcernsoverthetender

I attendedtheLawSocietyCouncilmeetingon28October2015inmycapacityasCouncilMember

representingsolepractitioners.IattachbelowasummaryofthekeyissuesraisedanddecisionsmadebytheCouncilduringthatmeeting.Ifyouwouldlikeanyfurtherinformation,orwishtodiscussanyissuesaffectingsolepractitioners,oryouwouldlikemetoraiseanymatterswiththeLawSociety,[email protected] 0121 551 7866.

Strategy Development and BudgetsFollowingdiscussionsinCouncilinSeptember,workcontinuedtorefinetheLawSociety’sstrategy,three-yearplan,andone-yearbusinessplan.CouncilformallysignedoffthesedocumentsinOctober,andthestrategyandthree-yearplanwaspubliclylaunchedinNovember.TheLawSociety’sstrategicaimsare:

• Torepresentsolicitorsbyspeakingoutforjusticeandonlegalissues

• Topromotethevalueofusingasolicitorathomeandabroad

• Tosupportsolicitorstodeveloptheirexpertiseandtheirbusinesses,irrespectiveofwhethertheyworkforthemselves,in-houseorforalawfirm.

TheseaimsaresupportedbytheLawSociety’ssharedvisionfortheprofession,andcommitmenttospendingmembers’money

process,andovertheimpactonsignificantnumbersoftheprofession.Inadditiontoraisingtheseconcernsatthehighestpoliticallevels,supportmeasuresarebeingmadeavailableforcriminalpractitionerswhohavebeenunsuccessfulinsecuringacontract.

Criminal Advocacy ConsultationItwasalsonotedthatthegovernment’sconsultationoncriminaladvocacyraisesanumberofquestions,includingwhetherthereshouldbeastatutorybanonreferralfees,and,critically,whethertheinstructionofin-houseadvocatesbysolicitorsconstitutesaconflictofinterest.TheLawSocietyisinactivediscussionwiththeMinistryofJustice,andhasalsocontactedlocallawsocietiesaskingthemandtheirmemberstoresponddirecttotheconsultation.

Court Fees and Court ClosuresCouncilheardabouttheSociety’srobustresponsestothegovernment’sproposalsforfurtherincreasesincourtandtribunalfees,andtotheintroductionofthecriminalcourtfeecharge.TheLawSocietyhasalsomadeasubstantialsubmissiononcourtclosures,informedbyover800memberresponsesandwithaspecialfocusonhelpingmemberscampaignagainstclosuresintheirownareas.

Consumer Credit RegulationCouncilwaspleasedtohearthattheSRAhasannouncedthatitwillcontinuetobeadesignatedprofessionalbodyforregulatingconsumercreditactivity,thusacceptingtheLawSociety’sstrongrepresentations,andavoidingtheneedfordualregulationonthepartofmanyfirms.

Veyo CouncilwasinformedthattheLawSocietyiscontinuingtoworkwithLegalPracticeTechnologiesonVeyosothatitcanensurethattheproducthastherightleveloffunctionalityandusabilitybeforeitislaunched.TheLawSocietywillnotlaunchtheproductuntilsatisfied,astheproductmustmeetmembers’expectationsandservethemwell.

LubnaShujaSPGLawSocietyCouncilMemberNovember 2015

COUNCIL MEMBER’S REPORTCouncil Member, Lubna Shuja, gives us an update on the Council Meeting held on

28th October 2015 and other Law Society activitiesLubna Shuja and Ian Lithman are the SPG Council Members, representing the interests of sole practitioners. You can contact them at [email protected] and [email protected] if you have any issues or concerns that you would like them to raise with the Law Society on your behalf.

THE BUSINESS BEHIND LAW

6

11-12 MAY 2016 | ExCeL LONDON

JOIN THE DISCUSSION SHAPING THE FUTURE OF THE LEGAL INDUSTRY

DO YOU SUPPLY A PRODUCT OR SERVICE TO THE LEGAL SECTOR?


THE BUSINESS BEHIND LAW

6

11-12 MAY 2016 | ExCeL LONDON

JOIN THE DISCUSSION SHAPING THE FUTURE OF THE LEGAL INDUSTRY

@LegalexShow

3,000 OF THE MOST PROACTIVE AND FORWARD THINKING LEGAL PROFESSIONALS

A TRULY UNBIASED AND INDEPENDENT MARKET PLACE

DEDICATED TO THE ‘BUSINESS BEHIND LAW’

JOIN 100 OTHER LEADING SUPPLIERS TO THE INDUSTRY

#Legalex

DO YOU SUPPLY A PRODUCT OR SERVICE TO THE LEGAL SECTOR?

CONTACT FOR REMAINING OPPORTUNITIES [email protected]@PRYSMGROUP.CO.UK

VISIT WWW.LEGALEX.CO.UK OR CALL WWW.LEGALEX.CO.UK OR CALL WWW.LEGALEX.CO.UK 0117 9902091


‘To Inherit or Not To Inherit? That is the Question’

Nicholas Woolf, Executive Committee Member, and his colleague Sam Cheesbrough, look at the implications of EU Succession Regulation

650-2012 which came into force on 17th August 2015.

EU Regulation 650-2012 – To Inherit or Not To Inherit? That Is the QuestionTheEUSuccessionRegulation(EU/650/2012)(“theRegulation”)cameintoforceon17thAugust2015.ThepurposeoftheRegulationistoharmonisethewayinwhichmemberStatesresolveconflictoflawsissueswhendealingwithsuccessionandinheritancematters.TheRegulationwillapplytoEstateswherethedeceaseddiedonorafter17thAugust2015.AlthoughtheUKhasoptedoutoftheRegulation,itisstillvitallyimportantthatpractitionersandclientsalikehaveregardtoitwhendealingwithanEstatewhereapersonhasconnectionswithacountrygovernedbytheRegulation.Italsohintsatachangeinthewaythathabitualresidenceistoberationalised.

Nick Woolf practises in Chancery Lane and is a member of the Executive Committee. He, alongside Penny Raby, is responsible for the development of the international arm of SPG.


Sam Cheesbrough was called to the Bar in 2014 and worked with Nicholas Woolf & Co between October 2014 and September 2015. He left this position to commence his pupillage at Selborne Chambers in London, who were ranked as a leading set by the Legal500 in 2014 and Chambers and Partners in 2015.


Case StudyJames is an English national domiciled in England. His job involves frequent travel, and over the last seven years he has lived and worked for, on average five months each year in each of France and Spain. He also spends two months visiting friends and family in England. He wants to return to England after he retires, and will then sell the chalet that he owns in France. He rents a small flat in England and a small villa in Spain. The bulk of his moveable property is kept in his Spanish villa. In his English Will, he chose to disinherit his eldest son and split his Estate equally between his two daughters and the National Trust.

James died on 18th September 2015, having recently been posted to Greece for a work assignment. He had just moved into rented accommodation.

The ProblemsEachofthefourcountriesinwhichJameshaslivedhavedifferentregimesfordealingwithintestatesuccession.Thedifferencesinclude:

Law Applied to the EstateTheEnglishLawpositionisthatimmovablepropertyisgovernedbythelawofthecountryinwhichthepropertyissituated.However,undertheRegulationthedefaultpositionisthatimmovablepropertywillbegovernedbythelawinwhichJamesishabitually resident.

Theeffectofthisisthat,underEnglishLaw,theFrenchLawofsuccessionwillbeappliedtotheFrenchproperty.Spain,FranceandGreece,however,willapplythelawofthecountryofJames’habitualresidencetothatproperty,irrespectiveofthefactthatthepropertyisinFrance.

UnderEnglishLaw,James’movablepropertyisgovernedbythelawofthecountryofJames’domicile;England.UndertheRegulation,thedefaultpositionisthatmovablepropertywillagainbegovernedbythelawinwhichJamesishabituallyresident.

Forced HeirshipFrance,SpainandGreeceallhavesystemsofforcedheirship,wherebyaportionoftheEstategovernedbythatcountry’slawisringfencedfortheheirsofthedeceased.ThiswouldmeanthatJames’sonmayinheritaportionoftheEstateeventhoughhewasdisinheritedintheWill.

EnglishLawhasnosystemofcompulsoryheirshipandthereforetheWillshouldbeappliedprimafacietotheEstategovernedbyEnglishLaw.However,thereisthepossibilityofanapplicationunderSection 1 of the Inheritance (Provision for Family and Dependants) Act 1975bytheson.

Whereasthecompulsoryportionfortheheirisfixedinmanycountries,whereanapplicationismadeunderSection 1thereisnoguaranteethatitwillsucceed.Evenifitdoessucceed,thereislittlecertaintywithregardtothequantumofanymaintenanceawardedundertheAct.

TaxationDifferentcountrieshavedifferentlevelsoftaxdependingon,forexample,thetypeofpropertyandvalueofthatproperty.Countriesalsodifferwithregardtothepeoplewhoarerequiredtopaythattax(forexample,whetheritispaidbythebeneficiariesoroutoftheEstate).

Some Things to Consider

Habitual ResidenceJames’habitualresidenceisnotastraightforwardmatter.Variousfactorstoconsiderare:

• JameshasspentmoretimeineachofFranceandSpainthanhehasinEnglandorGreece.

• Jameshasspentasignificantamountoftimeinthecountryofhisnationality.

• JamesownsasignificantassetinFrance.

• JameskeepsthemajorityofhismovableassetsinSpain.

• James’sfamilyandfriendsareprimarilyinEngland.

• JameshasremaineddomiciledinEngland.

• JameshaslivedinGreece,FranceandSpainprimarilyforwork.

• JamesintendstoreturntoEnglandwhenheretires.

• JameschosetowriteanEnglishWill,andnootherWill.

• Athistimeofdeath,JameswaslivingandworkinginGreece.



However,undertheRegulationthereisapotentialdifficulty.ShouldaFrenchCourtapplyEnglishLawtotheEstate,becauseoftheimpliedchoiceofEnglishLaw–byexecutinganEnglishWillthedeceasedintendstoapplyEnglishLawtotheEstate,whichwouldultimatelyresultinSwissLawapplyingtotheEstate?

OrshouldtheFrenchCourtapplyFrenchLawtotheEstate,becauseoftheimplicitnon-choiceofEnglishLaw–bydeclaringSwissdomicile,theunderlyingintentionisclearlytoensurethatSwissLaw,andnotEnglishLaw,ultimatelyappliestotheEstate?Undertheregulation,anEnglishnationalcannotchooseSwissLawtogoverntheirEstate.Thereforetheonlyotheroptionisthelawofthestateofhabitualresidence(inthiscase,France).

Inaworldbecomingincreasingscepticalaboutelaboratetaxavoidanceschemes,itisnotunthinkablethataCourtmaychoosetoscrutiniseaperson’schoiceoflawtodeterminewhetherthatchoiceisgenuine,orwhetheritismerelyameanstoanend.TheRegulationcouldenableaCourt,shoulditsowish,todrawbackthecurtainsandassesswhatisactuallyintendedbythedeceased.

Avoiding UncertaintyTherearethreemainwaysinwhichJamescouldhavereducedtheuncertaintyindisposingofhisEstate.

1. IfJameswantedhisEstatetobegovernedbyEnglishLaw,hecouldhavemadeanexplicitstatementinhisWilltothateffect.TheresultofthisisthatSpain,FranceandGreecewilleachapplyEnglishLawtoJames’worldwideEstate.

2. IfJameswantedhisEstatetobegovernedbyFrench,SpanishorGreekLaw,hecouldhave:

a. Ensuredthathehabituallyresidedinthecountryofhischoiceforaperiodoftime;and

b. EnsuredthathisWillwasdraftedinamannerthatconformedtothesuccessionrulesofthecountryofhischoice.

Departures from the Default PositionEvenifJamesisfoundtobehabituallyresidentinonecountry,thisdefaultpositionmaybedepartedfromintwoways:

1. Jameshasamaterially closer connectiontoadifferentcountry.

2. Jameshaschosen the law of his nationalitytogovernhisEstate.

Ineachcase,despitethefactthatJamesdiedwhilsthabituallyresidentinonecountry,thelawofanothercountrywillapplytohisEstate.

Materially Closer ConnectionJamesdiedwhilstlivinginGreece.AnargumentmaythereforebemadethatheishabituallyresidentinGreece.However,thefactthathehasonlyrecentlymovedtoGreecemeansthathemayhaveamateriallycloserconnectiontoeitherFrance,SpainorEngland.

Itmustbenotedthatthisexceptionisnottoberelieduponmerelybecausethequestionof“habitualresidence”isdifficulttoanswer.

Choice of LawJameshasnotexplicitlystatedinhisWillthathewishestochooseEnglishLawtogovernhisEstate.However,thefactthathehaschosentowriteanEnglishWillmayresultinJamesbeingtreatedashavingchosenEnglishLawtogovernhisEstate.

Thereis,however,aconsiderablepotentialforuncertainty.SupposeanEnglishnationaldiedwhilsthabituallyresidentinFrancehavingpreviouslyexecutedanEnglishWilldeclaringthattheyweredomiciledinSwitzerland.

UnderEnglishLaw,assumingthatthenationalhadlivedinSwitzerlandforaperiodoftime,thedeclarationofdomicilewouldbestrongevidencethatthedeceaseddieddomiciledinSwitzerland.SwissLawwouldthereforelikelyapplytotheEstate.

Whilstthesecondmethodprovidesnoguaranteesofsuccess(itdoesnotresolvetheuncertaintyof1)howtodetermineaperson’shabitualresidenceinborderlinecasesand2)thesituationwhereaperson’shabitualresidencechangesfollowingthedateofexecutionoftheWill),itisneverthelessastop-gapsolutioninsituationswhereaconflictmaypotentiallyarise.

Future Development of the Law?Inspiteoftheabove,itispossiblethatthelawmaydeveloptoresolvethisuncertainty.Indeed,thesolutionmaywellbefoundclosetohome.

ThewayinwhichtheRegulationhasbeendraftedisnotable.Theinclusionofthe“materiallycloserconnection”exceptionsuggeststhattheRegulationclearlyenvisagessituationswhereapersonishabituallyresidentinacountryeventhoughtheyhavenotphysicallyresidedthereforalongtime.

Thismaybeindicativeofachangeinthewaythathabitualresidenceisrationalised.Inparticular,thiscouldsuggestashiftawayfromanapproachbasedonphysicalpresenceandtowardsanintentionbasedanalysis.

Therearealreadyfainthintsofthisshiftincaselaw.Forexample,whenconsideringthehabitualresidenceofthepartiesinWinrow v Hemphill and another [2014] EWHC 3164 (QB),SladeJreferredtoanumberoffactorsincludingthereasonswhythepartywasinthecountry,wheremedicaltreatmentwasobtainedandwherepropertywasownedand/orregistered.Thelengthoftimespentinthecountrywasafactor,butbynomeansconclusive.

Similarly,theintroductorynotestotheRegulationstressthatthepurposeoftheRegulationisto “ensure that a genuine connecting factor exists between the succession and the Member State in which jurisdiction is exercised”.Later,itissuggestedthatfactorstobeconsideredinclude“the conditions and reasons for that [person’s] presence [in the country]”.Itisalsostatedthat“where the deceased [resides in a country] for professional or economic reasons…the deceased



could…be considered still to have his habitual residence in his State of origin in which the centre of interests of his family and social life was located”.

Itwouldbegoingtoofar,atthisstage,tosuggestthattheCourtislookingforanintentiontopermanentlyresideinaparticularcountry.Certainly,thereisnothingexplicitlystatedtothateffect.However,ifitispossibleforapersontobehabituallyresidentinacountryeventhoughtheyhaveonlyrecentlymovedthere,itisdifficulttolookbeyondsuchanintentionastheunderlyingreasonforthat.

Ifthelawwastoshiftinthisdirection,thenathirdpossibilityopensupforJames:

3. IfJameswantedhisEstatetobegovernedbyFrench,SpanishorGreekLaw,hecouldhave:

a. Ensuredthathephysicallyresidedinthecountryofhischoiceforaperiodoftime;

b. MadeadeclarationinhisWillthathewasdomiciledinhiscountryofchoice;and

c. DeclaredinhisWillthathiscountryofchoicetobehishabitualresidence,orthatitishispermanentcentreofhisinterests.

Thismethodmaynotbebulletproof.Forexample,aperson’sintentionmaychangebetweenthetimethattheWillisexecutedandthetimeofdeath.ThismeansthatthedeclarationofhabitualresidenceintheWillwouldnolongerbeanaccuratereflectionofthatperson’sintention.

Inspiteofthis,ithaslongbeenestablishedthatEnglishWillsoughttoincludeadomicileclauseirrespectiveofthefactthatapersonmaychangetheirdomicilefollowingtheexecutionoftheWill.Suchaclauseisstronglyindicativeofaperson’sdomicileatthetimeofdeath,astheburdenofshowingachangeofintendeddomicileisoftenadifficultonetobear.

Assuch,shouldashifttowardsintentiontopermanentlyresidetakeplaceinrespectof“habitualresidence”,thereisnoreasonwhyasimilarapproachcouldnotbetakenindraftingasiscurrentlytakeninrespectofdomicile.ACourtmaytakenoteofaperson’sdeclaredhabitualresidence,particularlyinborderlinecaseswherehabitualresidenceisunclear,solongasthepersonhasphysicallyresidedforaperiodoftimeinthecountrysodeclared.

ConclusionTheRegulationoughttobewelcomedasanecessaryunifyingmeasureinmulti-jurisdictionalsuccessionmatters.PractitionersmusttakenoteofitwhenadvisingclientsanddraftingWillsiftheyaretoavoidrunningtherisksofclaimsbeingbroughtagainstthemoragainsttheEstate.

Nevertheless,thelackofjurisprudenceandfirmguidelineswithregardtodetermining“habitualresidence”poseadifficultproblemforpractitioners.Wenolongerliveinaworldwherepeoplesettleinoneplaceforthedurationoftheirlives.Inaworldwherecommerceandbusinessisincreasinglyglobal,andwherepeoplemayhavemultipleresidencesthroughouttheworldthattheyfrequentlymovebetween,somethingmorethanphysicalpresenceisnecessaryiftheconceptof“habitualresidence”istobesomethingotherthanasmokescreenforjudicialdiscretion.

AbusinessmanmaybepostedtoabranchoftheFirminStockholmforoneyear,thenLisbonforthenext,beforereturningtoEngland,wheretheymayspendthenextyeartravellingtoandfromFranceforaparticularproject.Determininghabitualresidencebasedonphysicalpresenceanddurationoftimeinacountrywouldbeincrediblydifficult,withnocertaintythattwodifferentCourtswouldarriveatthesameconclusion.

Itmaywellbethattoeffectivelyconsiderthequestionof“habitualresidence”,ashiftawayfromlookingatphysicalresidenceinacountryandtowardsanintentiontopermanentlyresideinthatcountryisinevitable.Iftheelementofanintentiontopermanentlyresideinacountrybecomesstronger,comparisonsbetween“habitualresidence”and“domicile”areirresistible.

Afterall,cantherebeanygreaterconnectionbetweenapersonandacountry,thanwhereapersoncallsthatcountry“home”?

Thesolicitor’sdutywhendraftingaWillmustbetoremoveasmuchuncertaintyashecanatthetimeofdraftingtheWill.Asforwhathappensafterwards;heorshecanhavelittle,ifany,controlof.

©NicholasWoolf&SamCheesbroughofNicholasWoolf&Co.

24th August 2015

DISCLAIMER

Thisnoteisnotasubstituteforlegaladvice.Informationmaybeincorrectoroutofdate,andmaynotconstituteadefinitiveorcompletestatementofthelaworthelegalmarketinanyarea.Thisnoteisnotintendedtoconstituteadviceinanyspecificsituation.Youshouldtakelegaladviceinspecificsituations.Allimpliedwarrantiesandconditionsareexcluded,tothemaximumextentpermittedbylaw.




FIX THE ROOF WHILST THE SUN SHINES

obtainingPIImightnotbetheissuetheythoughtitoncewas,theyaregettingmoreworkthanusual.Thisincreasedworkflowiswhenmostmistakesaremade:themistakesthatwillturnintoclaimsinthenextfourtosixyearswhentheeconomyseesanotherturninitscycle.It’sthesimplerealitythatwhentheeconomyisweak,claimsstarttocomethrough.

Forexample,whentheeconomytakesadownturn,repossessionstendtoincrease:andit’stherepossessionsthatarethecatalystofmanyclaims,aslendersseektoenforceasecuritythattheybelievetheyhaveagainstthepropertyowner.Itisatthispointthatthespotlightwillshineonthesolicitorswhomaynothaveensuredthatregistrationswithboththelandregistryandthelenderwerecompleted.

The cycle broken down

Solicitors,especiallythoseinvolvedinproperty,shouldnotbesoquicktoforgetthedifficultiestheyexperiencedinobtaininggoodPIIcoverthreetofouryearsago.

2003–2005wasabusytimeinthepropertymarket.Solicitorswereinundatedwithbusinesswhichreallyputthemtothetest.Mistakesweremade.

2007 – 2008notonlysawthepropertymarketcrash,butalsosawalargenumberofclaimsbeginningtocomein.Itwasaquiettimeforbusiness,buterrorsfrom2003–5werecomingbacktohauntfirms.

In2009–2012,asadirectresultofthisincreasedclaimsactivity,goodPIIcoveratanachievablepricewashardtoobtainwhichreallyimpactedalotoflawfirmsbutSolePractitionersinparticular.Anditwasdowntothebusyperiodthemarketsawsixyearsprior.Sothekeymessageis:fixtheroofwhilstthesun

Theeconomyislookinghealthier,workforsolicitorsasawholeseemstopickingup,especially

intheriskyareasofconveyancingandgeneralpropertywork.Inturn,wesawaplentifulsupplyofinsurercapacityforPIIandevennoticednewinsurerscomingintothemarketplace.TherewereagoodnumberofPIIoptionsforSolePractitionersofallsizesandspecialisms.

TheissueofPIIisnottheproblemmanyfirmsexperiencedittobethreetofiveyearsagowhenweweresufferingthefall-outfromthepropertycrisisandensuingpropertycrashofthelate2000s.Theprofessionalindemnitypremiumswillalwaysrunconversetotheeconomy:whentheeconomyisstrong;claimstendtobelow.WhenclaimsarereducingbutPremiumsarehigh,underwritersareattractedintothePIIsectorprovidingincreasedcapacityforcoverinaclassicsupplyanddemandmarketplace.Aswegetovercapacitysopremiumsstarttofallandoptionsareplentiful.

Sotimesaregood,butwhat’sthecatch?Justattheverytimethatsolicitorsareprovedpleasantlysurprisedthat

Richard Brown is Executive Director with Willis, SPG’s preferred broker of PI Insurance to the Sole Practitioner market.

With the 2015 Professional Indemnity Insurance (PII) renewal season just behind us, the indications that it would be one of the easiest and most benign renewal seasons we have seen for some time proved to be correct.

isstillshining.It’sallaboutdoingthejobcarefullyandcorrectlynow,sowedon’tseeproblemsinthefuture.Riskmanagementisnevermoreimportantthanwhenbusinessisgood.

How to go about it

It’sreallyallaboutfourkeythings:

1. Systemsandprocess

2. Compliance

3. Checklistsandaudit

4. Filereview

Theseaspectswillmakesurethatthejobhasbeendoneproperlyfromstarttofinish.Inthepropertymarket,perhapsmostimportantly,duringthepostcompletionperiodafteraconveyance,keyregistrationswithboththelandregistryandthelendermustbeputinplace.

SonowisagoodtimetogetgoodPIIdeals.ThisistheopportunetimeforSolePractitionerstoinsurewithtopratedinsurerswhichperhapsyoumayhavestruggledtodointheperiodof2009–2012.Thisstrongeconomyislikelytoseethesamecycleoccuragain:themistakesmadenow,willaffectafirminsixorsoyears’time;preciselywhengoodcoverwitharatedinsurerwillbeneededthemostandalsowhenitwillbethehardesttoobtain.

TakeyourPIIcoverandRiskManagementseriouslynow,soyoucanavoidclaimsinthefutureandstaywiththesame“rated”insurerataffordablepremiums,throughtheturbulenttimeswhichmayhitusintheyearsahead.

Richard Brown, ExecutiveDirector,WillisE:[email protected]:+442031939442

premiumspremiumsplentiful.plentiful.

areare

222222 SoloSolo - - Winter 2015/2016Winter 2015/2016

plentiful.plentiful.

SoSo timestimes areare good,good,JustJust atat thethe veryvery timetimeareare provedproved pleasantlypleasantly surprisedsurprised



Thisarticlerepresentsafirstforme–IhavenotyethadtheprivilegeofwritingforSolo

magazineinthe18monthsorsosinceIbecameChiefExecutiveoftheSRA.

AlothashappenedsincemyfirstdayattheSRA,soI’mdelightedtohavethisopportunitytoletyouknowaboutanumberofdevelopmentsthataffectyou.ThekeyeventwasthelaunchofourRegulatoryReformprogrammeinMay2014,aprogrammethatwilldeliverrealbenefitsforyou.

Theaimoftheprogrammeistomakesurethatourrulesandregulationsdonotgetinthewayoffirmsofallsizesgettingonwiththebusinessoflaw,ifthoserulesandregulationsaddnothingtoprotectingtheinterestsoftheirclients.

Inremovingunnecessaryregulationtofreeupfirmstodobusiness,wearealsoensuringourprotectionsremaineffectiveforpeoplewhouselegalservices.

Oursuccessincuttingunnecessarybureaucracycanbemeasuredinthe30plusamendmentswehavemadetoourregulationsoverthepast18months.Oneoftheseamendmentsaffectsyoudirectly.

Itwillnothaveescapedyournoticethatpractisingcertificaterenewalswereslightlydifferentthisyear.Younolongerhadtoapplyforanannualendorsement–ithasbeenreplacedwithalifetimeauthorisationafterwemadeanumberofchangesthathavenowbeenapprovedbytheLSB.

Thesechangeshaveharmonisedandsimplifiedregulatoryarrangements.YoujusthadtoapplyforyourPractisingCertificaterenewalin2015asnormal,wedidnotaskyoutodoanymorework.

Thechangetolifetimeauthorisationhascomeaboutfollowingourconsultationontheissuein2010.Legislativechangesweremadeearlierthisyear,butthechangestotheSolicitorsAct1974andtheAdministrationofJusticeAct1985donotcomeintoforceuntil1November2015.

TheGovernmentagreedinthespring,andwehaveworkedoverthesummertoputappropriaterulesandguidanceandprocessesinplaceaheadoftherenewalsexercisestartingon1October.Thechangestoourrulesandregulationscameintoeffecton1 November.

Ourreformprogrammealsointroducedacommitmenttoofferdedicatedsupporttosmallfirms.Wehavepreviouslyworkedhardtostrengthenourrelationshipwithbiggerfirms,whichhasbeensuccessful.InNovemberlastyearwepromisedashiftinfocustoprovidemorehelpandsupportforsmallfirms.We’vebackedthiscommitmentupwithanumberofinitiatives.

Wehavecreateddedicatedsmallfirmswebpagesfullofinformationyoumightfinduseful;formedavirtualsmallfirmsgrouptoofferadviceonnewdevelopments;andincludedaspecificsmallfirmsoptionforourEthicsGuidancehelpline,whichnowtakesmorethantenpercentofthecallswereceiveforprofessionaladvice.

OurlatestinitiativeisthelaunchofadedicatedsupportteamwithinourSupervisionfunction.Theteamhas

expertiseindealingwithissuesfacingsmallfirmsandcanofferpracticalsupporttailoredtoyourneedstohelpwithregulatorycompliance.Youcancontactthenewteamviaourwebsite.Oneoftheteamwillcallyoubackwithinthreeworkingdaysofanyinquiryto them.

Wearenotrestingonourlaurels,however,andourBoardagreedinSeptembertoafurtherraftofchanges,whichhadbeenconsultedonoverthesummer.

TheseincludedaproposaltoremovetheneedforsolepractitionerstonominateCOLPsandCOFAs.Weknowthatmanyofyoufulfilacomplianceroleyourselves,asyoucannotemployanyoneelsequalifiedtocarrythisout.Youtoldusitwasaburden,andwehavelistened.

Wecontinuetodomoreforsmallerfirmswherewecan.WemeetregularlywithyourSolePractitionerGrouprepresentativestodiscusstheissuesthatmattertoyouandweareopentoanyofyourideasforchange.Letmeknowwhatyouthinkandwe’llkeepyouuptodatewithanyotherrelevantchangesthroughthepagesofSolomagazine.

Paul PhilipSRAChiefExecutive

SOLE PRACTITIONERS AND REGULATORY REFORM –

AN INSIGHT FROM THE TOP

Paul Philip is Chief Executive of the SRA.

“We have created dedicated small firms web pages full of information you might find useful; formed a virtual small firms

group to offer advice on new developments; and included a specific small firms option

for our Ethics Guidance helpline”“We meet regularly with your Sole

Practitioner Group representatives to discuss the issues that matter to you and we are open to any of your ideas for change.”



ACCOUNTS RULES PHASE 3

Crispin Passmore is Executive Director of Policy at the SRA.

Wearenowenteringthethirdphaseofourreviewofaccountsarrangements

forthoseholdingclientmoney.

OurreviewformspartofourRegulatoryReformprogrammewhichwaslaunchedlastMay.Theprogrammeisallaboutremovingunnecessaryrules–reducingtheregulatoryburdenwithoutweakeningtheprotectionsinplaceforclients.

Inthefirstphaseofthereviewofaccountsarrangements,weremovedtheneedforfirmstodeliverunqualifiedreportstotheSRA.Also,weremovedtheneedforfirmsthatreceivealloftheirfeesfromlegalaidtoobtainreportsinthefirstplace.

Next,ourBoardatitsJulymeetingagreedfurtherchanges,relaxingrigidrequirementsonthepreparationofaccountants’reports.

Accountantsarenowabletousetheirprofessionaljudgementinfuturetoassessifthereportstheyprepareforsolicitors’practicescomplywiththeAccountRules.Theynolongerneedtoqualifyaccountsfortrivialbreachesoftherules,butinsteadcanfocusonriskstoclientmoney.

Theexemptionfromtherequirementforlower-riskfirmstoobtainanaccountant’sreportintroducedinPhase1isextendedtoincludefirmswithanaverageclientbalanceofless

than£10,000andamaximumaccountbalanceof£250,000overtheiraccountingyear.

Revisedaccountants’reportformsareavailableforuse.Allfirmswhoseaccountingperiodendsonorafter1Novemberneedtousethem.DraftguidanceonthenewapproachisavailableontheSRA’swebsite.

IthasbeendevelopedthroughanexternalworkinggroupofkeystakeholderswhichincludedtheLawSociety,theSolePractitionersGroup,theCityofLondonLawSociety,ICAEWandanumberoftheindividualaccountancyfirmsthathadrespondedtotheconsultation.

InthethirdphaseouraimistocreateareducedandsimplersetofAccountsRulesthatfocusoncoreriskstoclients’money.Wealsowanttogivegreaterflexibilityinhowfirmscancomplywiththerules,minimisingunnecessarytransitionalcosts.

Thiswouldbeachievedwithoutreducingclientprotection–infact,wewouldliketoincreaseitbyfocusingonkeyrisksratherthanoverdetailedrules.Wewouldensurethatanynewarrangementsstandthetestoftime.

Aswellasre-writingtheAccountsRulesthemselveswewillbereviewingoutcomesrelatingtoclientmoneyintheCodeofConduct,reviewingthedefinitionofclientmoney,andtakingstockoftheroleofthecomplianceofficerforfinanceandadministration.

Youmightalreadyknowthatweconsultedinthesummeronthepossibilityofallowingthird-partiesto

holdclientmoney.Againwereceivedusefulfeedbackandthisconceptwillalsoformpartofourdeliberations.Whatwewon’tbelookingatarecompensationarrangementsas,likeprofessionalindemnityinsurance,thesearethesubjectofaseparateproject.

Wewillbeveryinterestedintheviewsofsolepractitionersduringthistime.WepublishedapolicypositionstatementinNovembertooutlinedetailsofourthinking.Weheldawebinaronthesubjectintheautumnandwillmeetwithkeystakeholderstoexplainourpositionandgarnerfeedback.

Therewillbeaformalconsultationthisyearonourfinalproposals.Givenyourpositivecontributionstodate,weverymuchwelcomeyourfurtherinvolvementinthisnextstage.

Crispin PassmoreSRAExecutiveDirectorofPolicy

“Accountants….no longer need to qualify accounts for trivial breaches of the

rules, but instead can focus on risks to client money.”

“We will be very interested in the views of sole practitioners during this time.”



REGULATION ROUND-UPHANDBOOK CHANGES

Harmonisingthewayyouareauthorisedisjustoneofanumberofchangesincluded

inVersion15oftheHandbook,whichwentliveatthestartofNovember.

Anumberofotheramendmentsshouldmakeiteasierforlawfirmstodobusiness.Theyinclude:

• AmendmentstotheSeparateBusinessRulethatenablesolicitorstoofferotherprofessionalservices

• RemovingtheneedforthecomplianceofficersofsmallfirmstoapplytobelicensedbytheSRA

• Streamlininganumberofprocessesforlawfirmsapplyingtobelicensedasalternativebusinessstructures,suchastheneedfortheSRAtoapproveindividualmanagers

• Expandingtheexemptionforfirmstoobtainanaccountant’sreport

TheHandbookcanbefoundat www.sra.org.uk/handbook

New routes to qualification

ThreenewlegalapprenticeshipshavejustbeenapprovedbytheDepartmentofBusiness,InnovationandSkills(BIS),leadingtoqualificationasasolicitor,paralegalandlegalexecutive.

ThesolicitorapprenticeshipisbasedontheSRA’snewStatementofSolicitorCompetenceandwillprovideanalternativetotheusualgraduateroutetoqualificationfortalentedyoungpeoplewhodon’twanttobearthecostofgoingtouniversitytostudyforadegreeandthenontoaLPC.Theapprenticeshipalsoenablesemployers

towidentheirtalentpoolanddevelopaflexibleworkforcealignedtotheirbusinessneeds.

Tofindoutmoreaboutapprenticeships,goto: http://www.apprenticeships.gov.uk/.

Quality assurance for criminal advocates

InJune2015,theSupremeCourthandeddownitsjudgmentonthechallengetotheintroductionoftheQualityAssuranceSchemeforAdvocates(QASA),dismissingtheclaimants’appealandupholdingtheschemeaslawfulandproportionate.

Furtherinformationonimplementationwillbereleasedinduecourse.

NEWS RELEASE FROM NICHOLAS WOOLF & CONicholasWoolf&Cois

delightedtoannouncethatAlbertoCostawillbeproviding

thefirmwithlegalconsultancyservices.

MrCostaisduallyqualifiedasapractisingEnglishandScottishsolicitorandaScottishNotaryPublic.HewasformerlyagovernmentlawyerattheTreasurySolicitor’sDepartmentandlaterestablishedhisownLondon-basedlawfirmalthoughceasedpracticingonhisownaccountashewasrecentlyelectedasaMemberofParliament.

NicholasWoolf,directorofNicholasWoolf&Co,commented,“WearedelightedtohaveAlbertoonboardasaconsultantsolicitor.WeareaChanceryLanefirmwithabroadandofteninternationalclientele.AlbertobringsawideexperienceofthelegalmarketbothinEnglandandScotlandwhichourclientsarecertaintobenefitfrom.”

AlbertoCostasaid,“IamverypleasedtobeassociatedwithNicholasWoolf&Co.WhilethemajorityofmytimewillalwaysbefocusedonmyresponsibilitiesasMPforSouthLeicestershire,Ilookforward

todevelopingthefirm’salreadysubstantialexpertiseintheUKlegalmarket.“

ENDS

Note to editors:

• NicholasWoolf&Cooffersawiderangeofbespokelegalservicestobusinessesandprivateclients.

• ThefirmwasfoundedbyNicholasWoolf,whowasadmittedasasolicitorin1979andisamemberofResolutionandPOCLA.

• AlbertoCostaisaBritishConservativePartypolitician.HehasbeentheMemberofParliamentforSouthLeicestershiresincetheMay2015generalelection.

• http://www.nicholaswoolf.com• http://www.albertocosta.org.uk


LONDON LEGAL WALK MONDAY 16TH MAY 2016: SAVE THE DATE AND GET READY TO PUT YOUR BEST FOOT FORWARD

elderly,familieslivinginpoorhousingconditionsandthosewithdisabilities.ManycharitiessupportingthevulnerableinoursocietyreceivefundsraisedfromtheWalk,includingtheDisabilityLawService,ShelterandmanylocalLawCentresandClinics,toenablethemtocontinueintheirvaluablework.

TheteamstakingpartintheWalkarediverseincludingleadingChambersandLawFirms,eventheBankofEngland,aswellaslawcentresandCAB’s.

Webelievethatsolepractitionershaveastrongcollectivepresencetocontributetotheday,soifyouwouldliketoregisteraspartoftheteam,pleasecontactourVice-ChairwomanKemiMosakuatkemi@spg.uk.com.Wewillthenprovideyouwithalltheinformationthatyouneed,includingdetailsofoursponsorshippage.WewillalsobeorganisingteamT-Shirtssoitisimportantthatyouregisterwithusifyouwouldliketobeapartoftheday.

TheLondonLegalWalkisanannualfundraisingeventorganisedbytheLondonLegal

SupportTrust,anindependentcharitythatraisesfundsforfreelegalservicesinLondon&theSouthEast.TheTrustsupportstheprovisionofspecialistlegaladvicethroughlawcentres,adviceagenciesandcitizensadvicebureauxbyprovidingthemwithgrantfundingalongsideotherformsofsupport.

TheTrustalsoreceivesadhocdonationsfromlawfirmsandchambers.

Inadditiontofunding,theTrustalsooffersitsknowledge,contactsandexperienceofthesectortohelpagenciesbecomemoresustainable.

Nextyear,SPGplantosignupasateamtojointhe10kmWalk,whichisbeingheldontheeveningofMonday16thMay2016,andwewouldloveforyoutojoinus.TheWalk,whichsetsoffbetween5.00pm–6.30pmandattracts10,000walkers,promisestobelotsoffun,aswellasarealopportunitytoraisevaluablefundsforthecauseofaccesstojustice–somethinginwhich,assolepractitioners,weallbelievestrongly.Lastyear,theWalksuccessfullyraisedover£700,000whichdirectlybenefitedvulnerablepeoplesuchasthe



TRAVEL TO INDIA - IT’S CLOSER THAN

YOU THINKOnmyfirstvisit,Itookataxiintotheoldtownbutfounditabitdilapidated,apartfromafewexpensiveboutiques,andnotveryinterestingbutIwouldexpectithaschangedsincethen.

IhadpreviouslystayedinthesouthattheTajExotica,whenoutsideonthebeachtherewasonlytheoneshackwhereasnowtherearesix.Idecidedtogobackforasecondtimetothesamehotel,astheothersinthesouthdidnotappealtomeandneitherdidIwanttochancemyluckbystayingonthenorthbeach.

Amealatthehotelwouldcostabout£25butattheshacksyouwouldpayabout£5foracocktailorbeerandagarnishedseafooddishwithaviewofthesea.

Thomson’sDreamlinerwasthewayIflewandthedestinationwasGoaontheWestCoast,aformer

Portuguesecolony.TheDreamlinerisreputedtohavethegreatestlegroomofanyEconomyClassplaneandIhavetoadmititiscomfortabletotheextentofbeingalmostluxuriousbutatabudgetprice.

IhadbeentoGoabeforeandlovedthehotel,theextraordinarythreedaytriptoKeralainthemiddleofthetwoweekstayandmostofallthefoodanddrinkshacksonthebeachoutsidethehotel.

Goafortheholidaymakerisseparatedintotwobeachareas,withtheairportandtheoldtowninthemiddle.Ihaveneverbeentothenorthpart,whichisreputedtobesomewhatnoisyandbrash,whichonmynextvisitImustsee.

MyfirstvisittotheTajExoticawasatChristmasandNewYear,some15yearsago,andmysecondwasjustbeforeChristmas2014.Thattimeofyear,stillbeinghighseason,ischeaperthanChristmasandNewYear.

WhathadimpressedmemostofallonthefirstvisitwasaninstantupgradetoagardenvillaatnoextracostandholdingtheroomintactwhilstinKeralaforthreedays.There,myroomwasonthereturnexactlyasithadbeenleft,cleanedandimmaculatewithclothesandpossessionsstillinplace.

ThatvisittoKeralawasmagic!FromGoaIflewtoMumbaiandthenontoCochin,travellingonbytaxitothelandingstageforariceboat.Theboathadtwocrew,onesolelyfora9.9Marineroutboardengine;beingwhatIhadandstillhaveonmy9’dingy.Theothercrewmemberwascook,housemaidandbutlerandveryskilledathisjob.

Ian Lithman, our globetrotting Council Member, shares his experience of a trip to India.

dish with a view ofthe sea.



Thetownwassmallandbusywithmotorbikesandpedestriansmixedtogetherastherewerenopavements.Thetownhadamarketandsmallshopsbutwasnotingoodconditionanddidnotseemtohavemanyplacestoeatortostayatbudgetprices.

Themainattractionfortourists,apartfromthethreevery-veryexpensive5*hotels,wastheMaharaja’spalacewhichIvisitedandbecauseofitssize,mazeofrooms,corridors,windingstaircasesandlowthresholdsoccupiedsomethreehourswithanentrancefeeofjustover£1.

The accommodationwasadoublebedroomandshowerinthesternandaloungewithdiningareaintheprow,whichatnightwasthecrew’ssleepingaccommodation.Theboatcruisedthenarrowcanalsforthreedaysandstoppedoverforonenightofthethreeataheritageislandonthelakeshore.

Theexcursionwaswellworthwhile,despitetheplanearrivinglateintoMumbai,somissingtheconnection,andhavinganovernightstayneartheairportinaLeilagroup5*hotelattheairline’sexpense.

IhadalwayswantedtovisitRajistanbutwasputoffbythefactthatthecarjourneysbetweenplacesofinterestusuallytook6hours.OnmysecondvisitIdecidedtochooseonlyoneplaceinRajistanandthatwasUdaipur.Howeverthetravellingevenbyairlostonewholedayoutandhalfadayback,beingshorterduetohavinggotupat3amdespitehavingpaidanexorbitantamountforthehotelnightstay.

Udaipurisfamousforhavingthefirstman-madelakewhichisoblonginshape.OnonelongshoreistheMaharaja’spalaceandoppositeontheothershorewastheOberoihotelwhereIstayed.Inthemiddleofthelakeweretwohotels,eachonanisland,theTajPalace(famousfortheJamesBondfilm)andtheLeilawitharestaurantonthethirdisland.

Itisdefinitelynottobemissedespeciallybecauseithastoilets(alwaystakeyourownpaper)andcafes.

MaybesomeonecantellmehowitcametopassthatinIndiathetoiletshaveonlyahandheldshowerhosebutnopaperorhotairdryer;theremustbeahistorytothisphenomena!

bikes




P R O P E R T Y I N F O R M A T I O N

Supporting Sole Practitioners

SPG appoint Index Property Informationpreferred search provider

ndex Property Informationare a National Search Provider of all residential and commercial conveyancingI

Our commitment to the SPG:

• Support the SPG financially.

• Provide special discounted rates to Sole Practitioners.

• Sponsor and exhibit at the SPG Annual Conference.

• Support SPG regional meetings with free venues and speakers.

• Organise and fund topical CPD events nationally on behalf of SPG members.

Anne LuckingIndex Managing Director explains

“Index is the fastest growing ConveyancingSearch Provider in the UK, and we haveachieved this by our commitment to localoffices, run by local people which enablesus to provide what we believe to be aservice next to none. We are extremelypleased to have been chosen by the SPGto represent Sole Practitioners as yourpreferred provider as we believe ourbusiness ethos is very much in line withSole Practitioners.”

“My father was a Sole Practitioner and I worked for him as a conveyancer, so I understand the problems and issues thatSole Practitioners face day to day. Themost important part of our business is you,the solicitor, so we tailor our service to yourspecific needs and provide you with levelsof service that will save time and money”

“Technology is a tool tobe embraced but in theend you have to engagewith people”

searches and reports. They have a networkof local regional offices throughout Englandand Wales. Their central ethos is based onexceptionally high service, over and abovethat usually offered by other providers. They have been specifically selected forSPG preferred status due to theircommitment to this ethos and their ability toprovide local solicitors with a completelybespoke service. We believe this will be ofspecific benefit to Sole Practitioners.

To find out more call us on 01206 273776 or email [email protected]

ww

w.in

dexp

i.co.

uk



CONVEYANCING LOBBYING

GROUP UPDATE

FollowingthelaunchoftheConveyancingLobbyingGrouplastyear,SPGhasbeenpleasedtoachieveameasureof

successthroughbuildinguponitsrelationshipwithLloydsBank.ThisresultedinthepublicationofanopenletterfromLloydsBankon29thJune2015whichconfirmstheBank’spolicyinrelationtoacceptingsolepractitionersolicitorsontoitspanel.

PleasecontactHilaryUnderwoodat [email protected] ifyouwouldliketoget involvedwiththelobbyinggroup.involved with the lobbying group.

When making decisions that affect our Panel, we take great care to ensure that we have a panel

which provides representation throughout England and Wales as well as for all sections of the

population. Our Panel consists of many thousands of firms across England and Wales, including

Sole Practitioners and both large and small firms, providing significant choice for our customers.

A key factor in allowing us to maintain this position is our participation in the Lender Exchange

scheme. Lender Exchange allows us to meet our regulatory obligations by ensuring that we have

access to detailed information about our panel firms which is accurate, regularly updated, and

verified by other sources where possible.

It is therefore a condition of panel membership that all our panel firms are required to provide the

information we need to manage our Panel by means of this system.

Panel firms using Lender Exchange benefit from being able to provide the information all lenders

using the scheme need to a single central point. We feel this considerably reduces the

administration burden on firms when having to respond to regular information requests from multiple

lenders. We also believe the Lender Exchange solution enables us to maintain stronger assurance around our

Panel which benefits both Lloyds Banking Group and its customers. The scheme has received strong

support from the Council of Mortgage Lenders membership and we are confident the scheme will

continue to present a more efficient way of managing our Panel without the need for us to introduce

our own panel membership fee.

I hope this clarifies the Banks policy about Sole Practitioners however, I would be happy to discuss

with you in more detail if you feel this would be helpful.

Kind regards

Paul McCluskey

Paul McCluskey

Head of Professional Practices

publicationJune

relation

take great care to ensure that we have a panel

d and Wales as well as for all sections of the

nds of firms across England and Wales, including

providing significant choice for our customers.

ion in the Lender Exchange

regulatory obligations by ensuring that we have

ate, regularly updated, and

all our panel firms are required to provide the

ing able to provide the information all lenders

nt. We feel this considerably reduces the

www.lloydsbank.com/business

Please contact us if you’d like this in Braille, large print or audio tape.

Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service.

Lloyds Bank plc Registered office: 25 Gresham Street, London, EC2V 7HN. Registered in England and Wales no. 2065.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Licensed under the Consumer Credit Act 1974 under registration numbers 0004685. We subscribe to The Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.uk

Lloyds Bank plc is covered by the Financial Services Compensation Scheme and the Financial Ombudsman Service.

(Please note that due to the schemes’ eligibility criteria not all Lloyds Commercial customers will be covered by these schemes.)

39 Threadneedle Street London

EC2R AAU

Tel +44(0) 7785 503007

Sole Practitioner Group Members

29th June 2015

Lloyds Bank Residential Conveyancing Panel

Dear SPG Members

Thank you for the opportunity to attend your recent conference.

Concerns were expressed at the conference by some of your members about the Bank's policy

around the admission of Sole Practitioners to its residential Conveyancing Panel. I am writing to

provide clarification of our position.

We do not have any restrictions about the size of a firm and we are prepared to admit

Sole Practitioners on to our Panel providing they meet our general panel criteria. We have never

excluded Sole Practitioners from our Panel and we are surprised there is an opinion among your

members that we have done so.

Across England and Wales we currently have in excess of 530 Sole Practitioner firms on our Panel, a

significant percentage of our overall panel in this jurisdiction. Although many of these firms have

been panel members for a considerable time I am aware that we have admitted several Sole

Practitioners to our Panel this year.

I hope that this information gives you and your member's assurance there is no policy to exclude this

category of firm and that our Panel remains open to firms of all sizes.

However, it is important to note that we do require all firms applying for panel membership,

regardless of size, to be able to show that they are regularly involved in residential conveyancing

matters. We firmly believe that those firms who carry out regular conveyancing will be more familiar

with our requirements and provide a better service to the Bank and its customers.



Regional Representative Contacts and Forthcoming MeetingsBIRMINGHAM/WEST MIDLANDS

JimmyOgunshakin–MayflowerSolicitors2GatsbyCourt,170HollidayStreet,Birmingham,B11TJTel:08452330003Email:[email protected]

Thursday,21January2016–7.00pmattheofficesofMayflowersolicitorsThursday,24March2016–7.00pmattheofficesofMayflowerSolicitors

BOURNEMOUTH

LaurenAnnicchiarico–FrenchLawMattersSuite1,FirstFloor,RichmondHouse,RichmondHill,Bournemouth,BH26EZTel:01202355480Email:[email protected]

BRISTOL

StephaniePritchett–PritchettsTheMoat,1aRoseryClose,Westbury-on-Trym,Bristol,BS93HTel:01173070266Email:[email protected]@pritchettslaw.com

Wednesday20thJanuary2016

PeopleshouldcontactJenniferRenneyourBSPGEventsandMembershipCo-Ordinatorat:[email protected](£20percalendaryear)andtosignupforevents(thenfree).DetailsoftheVenueformeetingswillthenbecirculatedtoallmemberspriortothemeetings.

EAST MIDLANDS

TinaAttenborough–AttenboroughLawHawthorns,TheClose,Derby,DE222ADTel:01332558508Email:[email protected]

24thFebruary20165pm–7pmfollowedbydrinksinthebar–YewLodgeHotel,33PackingtonHill,Kegworth,Derby,DE742DF24thMay20165pm–7pmfollowedbydrinksinthebar–venueTBC,pleasecontactTinaformoredetails.24thAugust20165pm–7pmfollowedbydrinksinthebar–SimpsonSolicitor’sBoardRoomandSevernRestaurant25thOctober20165pm–7pmfollowedbydrinksinthebar–venueTBC,pleasecontactTinafordetails.7thDecember20165pm–7pmfollowedbydrinksinthebar–venueTBC,pleasecontactTinafordetails.

REGIONAL GROUPSRepresentativeforfurtherinformationaboutthenextmeeting.

IfyouareinterestedinsettingupaRegionalGroupwithinyourownarea,pleasecontactHilaryUnderwoodSPGCo-ordinatoratinfo@spg.uk.comasshewillbeabletoassistyouwiththeinitialmailshots,expenses,venueandspeaker.

SPGhasanumberofregionalSPgroupsaroundthecountryanddetailsofallSPGRegional

Representativesandanyforthcomingregionalmeetingsaregivenbelow.Thesedetailscanalsobefoundonourwebsiteatwww.spg.uk.com.

Ifyouareinterestedinattendingaregionalmeetinginyourarea,thenpleasecontactyournearestRegional

RegionalmeetingsprovideanopportunityforSPstonetworkandsupporteachother,obtainvaluabletraininganddevelopmentandcross-referbusinesstotrustedcolleagues.InthechallengingtimesthatwearefacingitisevenmoreimportantforSPstomeetanddiscusshowtheycanusetheiruniqueskillstoprovideeffectivecompetitiontolargerorganizations.


HAMPSHIRE/DORSET/WILTSHIRE

KirstenWoodgate–Woodgate&Co95-95PalmerstonRoad,Southsea,Portsmouth,Hants,PO53PRTel:02392835790Email:[email protected]

KENT

HilaryUnderwood–HAUnderwoodSolicitorsUnderwoodHouse,32Broadway,Sheerness,Kent,ME121TPTel:01795663555Email:[email protected]

LONDON CENTRAL/ESSEX

ShakInayat–PennGroupStMaryLeBowHouse,54BowLane,LondonEC4M9DJTel:03333444548Email:[email protected]

Wednesday20thJanuary2016Wednesday17thFebruary2016Wednesday23rdMarch2016Wednesday20thApril2016Wednesday18thMay2016

NORTH WEST

GarethWilliams–GHWSolicitors19BoltonStreet,Ramsbottom,BL109HUTel:01706827042Email:[email protected]

SURREY

MargaretA.Ilori–CapuletSolicitorsLinkHouse,140TheBroadway,Tolworth,SurreyKT67HTTel:02083976949Email:[email protected]

SUSSEX

MartinRoss61ChurchRoad,Hove,EastSussex,BN32BPTel:01273726951

YORKSHIRE

AngelaDavies–AMDaviesReynardCrag,ReynardCragLane,HighBirstwith,Harrogate,NorthYorkshire,HG32JQTel:01423772860

or

RachelRoche–RocheLegalLtd3WestfieldHouse,MillfieldLane,York,NorthYorkshire,YO266GATel:01347844046

or

FionaGillam–MyComplianceColleague10PeckettsHolt,Harrogate,NorthYorkshire,HG13DYTel:07570793728


CYBERCRIME … COMING TO A LAW FIRM NEAR YOU

n

n

n

WHAT ARE THE RISKS

n

n

n

n

n

n

CYBER AND THE SRA CODE OF CONDUCT 2011



CYBERCRIME … COMING TO A LAW FIRM NEAR YOU

Conducting risk assessments will help firms to identify, assess and understand the likelihood of a cyber-attack happening against the firm and the impact any such attack would have on their business and clients.

n In addition to good risk management principles, firms also have a duty to protect ‘client money and assets’ (Principle 10), and cybercrime presents a significant risk to client money and assets as client accounts are very attractive to cybercriminals.

n Firms also need to take into account the risks of keeping their clients a airs confidential (Outcome 4.1). Cybercriminals consider the information held by law firms on their clients to be very valuable, so ensure e ective measures are in place to prevent confidential information being breached. The damage to a law firm’s reputation needs to be considered should any personal and sensitive information that clients have entrusted with the firm be breached.

n Firms need to bear in mind the financial and structural implications of a cyber-attack. If systems are down as a result of a virus, this may lead to a significant disruption to the business and the service provided to clients, and as a consequence the firm may su er a loss in revenue that may result in financial instability. Data can also be ‘taken hostage’ as a result of a cyber-attack and ransom monies requested by the cybercriminals to release the data.

Cybercrime is a growing problem which is becoming an increasing challenge for all businesses and law firms are not immune to cyber risk.

Firms of all sizes are being targeted by cybercriminals because they consider their systems to be unsophisticated and the information stored and monies held on account to be extremely valuable. Due to the subtlety of cybercriminals some firms may be unaware that they have been the victim of a cyber-attack. Whilst the number of cybercrime related breaches has slightly decreased, the scale and costs associated with having a breach has increased.

It is essential that law firms comply with both their regulatory and legislative obligations and take the necessary steps to protect themselves and their clients. Minimising exposure from the threat of a cyber-attack and ensuring that e ective policies and procedures are in place to deal with cyber security is a must for all. Ensuring that all sta receive appropriate training and raising general awareness of the risk, is in our opinion, vital.

WHAT ARE THE RISKSRisks of cybercrime include but are not limited to:

n Risks to client money and assets

n Breaches of confidential information

n Structure and financial instability

n Business continuity

n Bogus firms

n Reputational damage

CYBER AND THE SRA CODE OF CONDUCT 2011In accordance with Principle 8 of the SRA Principles (“the Principles”) and the SRA Code of Conduct 2011 (“the Code”) law firms need to consider the risks to their business and their clients from cybercrime.



n Firms must be alive to their regulatory obligations under Principle 8, Outcome 7.4 in respect of financial instability and Indicative Behaviour 7.3 in relation to business continuity.

Do not forget the reporting obligations under Outcome 10.3 if the firm is the subject of a cyber-attack and is unable to achieve compliance with the Code.

HOW TO MITIGATE THE RISKS OF CYBERCRIME

ALL LAW FIRMS SHOULD ASK THE FOLLOWING QUESTIONS:

n How secure are my computer systems?

n Could we become a victim of a cyber-attack?

n Would our systems withstand a cyber-attack?

n How should we mitigate risk and minimise our exposure?

FIRMS SHOULD:

n Carry out risk assessments

n Review current policies and procedures to check their e�cacy

n Check operating systems, browsers, anti-virus/malware software and firewalls are up to date

n Control access by using strong passwords (do not share) and limit number of failed login attempts

n Frequently backup systems

n Limit use of flash drives (USB sticks) and other forms of unencrypted portable media

n Be mindful and reduce the amount of sensitive information sent in email attachments

n Consider the use of encryption on removal media/portable devices

n Block access to inappropriate sites

n Revoke access rights to sta� that have left the firm and close unused accounts

n Train all sta� in the dangers of cyber and in the correct procedures to mitigate risk

HAVING CONSIDERED THE ABOVE, HOW ROBUST ARE YOUR SYSTEMS AND WHEN WERE THEY LAST REVIEWED?

n Do your policies and procedures actually include provisions to deal with cyber risk?

n Does your business continuity plan incorporate procedures for dealing with business disruption as a result of a cyber-attack?

n How secure is your data? Is there a risk of client confidential information or your sensitive business information being exposed?

CYBER-ATLAS – A CYBER SECURITY RISK MANAGEMENT TOOL KITYou may wish to consider enhancing your policies and procedures by including a cyber security tool kit called Cyber-Atlas which provides law firms of all sizes with a cyber risk management and security solution.

Cyber-Atlas o�ers an on-line risk assessment of your systems identifying any areas of exposure and weakness. In addition you will have access to tools and advice about cyber risk, achieve a recognised cyber security accreditation which will demonstrate to your clients and suppliers that you have attained a recognised cyber security standard and you will also have access to other services which will assist with cyber risk issues such as an incident response service and cyber insurance.

By taking these e�ective measures you should be able to protect yourself and your clients by minimising your cyber risk exposure and also satisfy the requirements of the Principles and the Code.

Willis Limited, Registered number: 181116 England and Wales.Registered address: 51 Lime Street, London EC3M 7DQ.A Lloyd’s Broker. Authorised and regulated by the Financial Conduct Authority.

39707/08/15

For further information please contact:

Richard Brown T: +44 20 3193 9442 E: [email protected]

Kate Cooper T: +44 (0)113 283 2970 E: [email protected]

Scott Thorne T: +44 (0) 20 3193 9407 E: [email protected]

Willis Limited The Willis Building 51 Lime Street London EC3M 7DQ

www.cyber-atlas.com www.willisfinexglobal.com

CYBER FRAUD ALERT Over the last 12 months we at RPC have seen a large number of cyber-attacks by increasingly sophisticated fraudsters on solicitors' and licensed conveyancers' client and office accounts with substantial sums of money being taken. Typically, the fraud works like this:

You receive a telephone call (usually a Friday) purportedly from your Bank's Fraud Unit asking for the Head of Finance/Head Cashier by name.

This person says that they are concerned about possible suspicious activity and provides information about genuine transactions from your client account which you confirm. This gains your trust.

Then they refer to the suspect transactions. You agree that they are nothing to do with your firm and the person says they will not be processed. These are fictitious.

You are told your account is frozen whilst an investigation is undertaken. However, you are asked if any payments need to be made that day and if so that person will do them for you.

Having gained your trust, if urgent payments are to be made, you unwittingly hand over the online security access pin and security number which gives access to the client account.

The fraudsters often gain confidential banking information via spam emails that someone at the firm inadvertently opens. Another variation involves the interception of emails between a solicitor and client and the raising of bogus invoices by the fraudster diverting funds from the client.

Any unauthorised payments from a solicitors' client account are a breach of the Solicitors Accounts Rules with potentially dire consequences from a regulatory, insurance and personal viewpoint.

To avoid being a victim of this fraud:

Never give any access or security information to anyone over the telephone or in an email no matter how genuine they sound. Banks have all the information they need and will not ask you for it.

If you receive such a call ask for a name, contact number and email address and that you will call that person back. Then contact your own Bank relationship manager and seek to verify the details you have been given. Only proceed when you are totally satisfied.

Use a dedicated computer for online banking with a dedicated IP address. The Bank is authorised only to act upon instructions received from that IP address.

If you are a victim of any fraud immediately contact:

Your Bank

The Police

Your brokers/Insurers



n

HOW TO MITIGATE THE RISKS OF CYBERCRIME

ALL LAW FIRMS SHOULD ASK THE FOLLOWING QUESTIONS:

n

n

n

n

FIRMS SHOULD:

n

n

n

n

n

n

n

n

n

n

n

HAVING CONSIDERED THE ABOVE, HOW ROBUST ARE YOUR SYSTEMS AND WHEN WERE THEY LAST REVIEWED?

n

n

n

CYBER-ATLAS – A CYBER SECURITY RISK MANAGEMENT TOOL KIT


39707/08/15

For further information please contact:

Richard Brown T: +44 20 3193 9442 E: [email protected]

Kate Cooper T: +44 (0)113 283 2970 E: [email protected]

Scott Thorne T: +44 (0) 20 3193 9407 E: [email protected]

Willis Limited The Willis Building 51 Lime Street London EC3M 7DQ

www.cyber-atlas.com www.willisfinexglobal.com

CYBER FRAUD ALERT Over the last 12 months we at RPC have seen a large number of cyber-attacks by increasingly sophisticated fraudsters on solicitors' and licensed conveyancers' client and office accounts with substantial sums of money being taken. Typically, the fraud works like this:

You receive a telephone call (usually a Friday) purportedly from your Bank's Fraud Unit asking for the Head of Finance/Head Cashier by name.

This person says that they are concerned about possible suspicious activity and provides information about genuine transactions from your client account which you confirm. This gains your trust.

Then they refer to the suspect transactions. You agree that they are nothing to do with your firm and the person says they will not be processed. These are fictitious.

You are told your account is frozen whilst an investigation is undertaken. However, you are asked if any payments need to be made that day and if so that person will do them for you.

Having gained your trust, if urgent payments are to be made, you unwittingly hand over the online security access pin and security number which gives access to the client account.

The fraudsters often gain confidential banking information via spam emails that someone at the firm inadvertently opens. Another variation involves the interception of emails between a solicitor and client and the raising of bogus invoices by the fraudster diverting funds from the client.

Any unauthorised payments from a solicitors' client account are a breach of the Solicitors Accounts Rules with potentially dire consequences from a regulatory, insurance and personal viewpoint.

To avoid being a victim of this fraud:

Never give any access or security information to anyone over the telephone or in an email no matter how genuine they sound. Banks have all the information they need and will not ask you for it.

If you receive such a call ask for a name, contact number and email address and that you will call that person back. Then contact your own Bank relationship manager and seek to verify the details you have been given. Only proceed when you are totally satisfied.

Use a dedicated computer for online banking with a dedicated IP address. The Bank is authorised only to act upon instructions received from that IP address.

If you are a victim of any fraud immediately contact:

Your Bank

The Police

Your brokers/Insurers



USAGE AND ABUSAGE OF DROPBOX - SENSIBLE, SECURE-ALTERNATIVES TO INSECURE DROPBOXDropbox is a convenient tool to allow individuals to make use of cloud storage and synchronised file transfers on the web. It is increasingly being adopted by businesses, including some in the legal community, because it is so convenient, works very straight-forwardly and is really easy to set up. What’s not to like? - Data Integrity and security!

WHAT’S THE PROBLEM?Dropbox doesn’t encrypt files well: meaning that the data and information stored in Dropbox is open to manipulation, alteration and theft. What does this mean?

In order to understand the problem better, we need to reflect on how encryption of cloud services should work in pursuit of privacy at the levels your organisation needs.

1. Cloud storage services need to establish strong encryption keys applied to files when they are downloaded and installed. The service should provide the ability to encrypt these keys with a private (user-only known) encryption password.

2. When your files are encrypted on your device with an encryption key, you can send them over the Internet to the cloud storage computer using a trusted connection called SSL/TLS connection.

3. When the file gets to the cloud computer, files should again be stored with an acknowledged high level of encryption (called 256 AES Encryption Methodology) which means the receiving computer locks your file with a key that has 256 computer characters.

An application that provides all three will be pretty secure and you can have confidence in using it. The BIG PROBLEM WITH DROPBOX is that it only does the first 2.

So it’s not as secure as it needs to be and its very popularity adds to the concern. Because Dropbox works really easily with other programs, it is sus-ceptible to attacks from hackers using this approach route to try to expose files and passwords.

FILE TRANSFERS ON THE WEB

SO WHAT’S TO BE DONE?Solutions take two forms. The first group is taking additional solutions sometimes called Cloud Lockers that work with Dropbox; the second solution is to dump Dropbox and use alternative cloud storage and file synchronising applications that protect files properly, i.e. by ticking all three of the boxes.

Cloud Locker type solutions have the advantage of meaning you can still use Dropbox but also be provided with an additional security layer around it. The downside is that you have to embrace the additional e�ort/complexity of encrypting your most important files. There are three versions of this product which you may wish to consider:

1. Boxcryptor

2. CloudFogger

3. Vivo

Alternative applications have the advantage of doing the security right the first time, but the downside is that you have to dump Dropbox. Examples of these applications which you may wish to consider looking at include:

1. Spider Oak for smaller firms and individuals

2. Tresorit for more complex firms

3. Teamdrive for more complex firms European centric

For most small firms, and individuals, combined use of Dropbox and Boxcryptor may prove to be enough. For more complex firms, a discrete alternative app is more likely to be an appropriate response.

CONTACTPeter Armstrong, Head of Cyber Risk Consulting Tel: +44 (0)20 3124 6951 Email: [email protected]

Colin S. Taylor Executive Director Professional Indemnity UK Tel: +44 (0)20 3193 9418 Email: [email protected]


USAGE AND ABUSAGE OF DROPBOX - SENSIBLE, SECURE-ALTERNATIVES TO INSECURE DROPBOX

WHAT’S THE PROBLEM?

FILE TRANSFERS ON THE WEB

SO WHAT’S TO BE DONE?

CONTACTPeter Armstrong, Head of Cyber Risk Consulting Tel: +44 (0)20 3124 6951 Email: [email protected]

Colin S. Taylor Executive Director Professional Indemnity UK Tel: +44 (0)20 3193 9418 Email: [email protected]


SCOTLAND THE BRAVE TheConferenceofferedauniqueopportunitytosharewithScottishsolepractitionerssomeofthechallengesthatsolepractitionersinEnglandandWaleshavefacedoverthepastfewyearsandtoofferthempositiveencouragementthatthey,justlikeus,canweatherthestormsofchangeastheScottishlegallandscapeincreasinglybeginstomirrorourown.

Likeallthegreatestmeetingsoftheminds,therewasasmuchtobelearnedastherewastogiveanditwasclearthatScottishsolepractitionersarelackingnothingwhenitcomestobeingbusinesssavvyandinnovativeintheirpractices.Socialmediaandmarketingarehighontheagendaandtherewasnoshortageofideasabouthowtogrowapractice,nomatterhowruralitmaybe.

TheScotsareaspassionateasusaboutaccesstojusticeandtheyarejustasdeterminedaswearetoholdtheirowninspiteofthewideningofthemarket.ItwasencouragingtohearChristineMcLintock,PresidentoftheLawSocietyofScotland,addressdelegateswithapositivemessageaboutallthattheLawSocietyaredoingtosupporttheminachangingmarketplaceandtherewasfurtheropportunitytodiscussthisoveralunchmeetingwithChristinethefollowingday.

ItwasalsofascinatingtodiscoverthattherearelotsofScottishsolepractitionerspractisingdownsouthherewithus,manyoftheminLondonandwehopethatwecandeveloplotsofopportunitiestocontinuetosharewith,learnfromandsupportoneanotheroverthecomingmonths.

ReflectionsontherecentvisitofSPG’sChairman,SukhjitAhluwalia,toBonnieScotland

wherehemetwithsolepractitionerswhohadgatheredfromtheHighlandsandtheLowlandstomeetinStirlingfortheLawSocietyofScotland’sSoleandHighStreetPractitionersConference.

Scotlandisknownasthelandofthebraveandthefree,andthatiscertainlyagooddescriptionofthe30–40solepractitionerswhomettogetherinStirlingtoattendtheLawSocietyofScotland’sSoleandHighStreetPractitionersConferenceonSaturday18thSeptember2015.TheconferencewasheldintheStirlingCourtHotel,situatedatthefootoftheWilliamWallaceMonument,anaptlocationforaconferencecelebratingthefreedomandbraveryofsolepractitionerswhofiercelybelieveinjusticeandtheface-to-facedeliveryofhighqualitylegalservicesdespitewhatsometimesfeelsliketherisingtideofthe“bigguys”.

Scotland’sgeographymeantthatmanyhadcomefromfarandwidetospendtheirSaturdaylisteningtosessionsonbillingpitfalls,onlinebusinessgenerationstrategies,winningandgrowingyourbusiness,exitstrategiesandfinancialchallengesandopportunities.

develop



THE EVER CHANGING WORLD OF COSTS

ShewasaDeputyfor30yearsandsheisthefirstfemaleCostsJudgetobeappointed.FurthertwonewextraCostsOfficerswillbeappointedshortly.Thisisinparttoreducethecurrentwaitinglistforcostshearingwhichiscurrently6to10months.MostoftheMastersarecurrentlylistingcasesfromApril2016onwardshoweverMasterGordon-SakerisactuallylistingmattersaslateasMarch2017.

BynowmanywillknowthatthenewformatBillofCostshasbeenreleasedandisbeingusedinavoluntarypilotschemeattheSCCOwhichistorununtilOctober2016(afterwhichtherewillbeamandatorypilotscheme).ThepilotappliestoBillswherecostsproceedingswherecommencedpost1stOctober2015andacostscasemanagementorderisinplace.ForfurtherinformationseeCPRPracticeDirection51L.

ThenewBillofCostsisessentiallyaspreadsheetwith60columnswhichismeanttobeautomaticallypopulatedaslongasyourecordyourtimeinaccordancewiththedreaded“JCodes”.

JCodesmeanthatyouknownotonlyneedtopreparenotesforhowyouhavespentyourtimebutmustalsocodethembyphase,taskandactivity.Inthesameveinallyourdisbursementswillneedtobecodedinaccordancewith“XCodes”.

ThemostworryingaspectisthefactthatapplicationofJCodestoyourworkisretrospective.Inotherwordsoncethepilotismandatoryallthosethatneedto

Therehavebeenanumberofchangesrelatedtocostssince1stOctober2015.Nodoubttoomany

togothroughfullybutherearesomeofthehighlights.

AsmanywillbeawaremostcostsassessmenttakeplaceintheSeniorCourtsCostsOfficeinsidetheHighCourtofJustice.MasterGordon-Saker(SeniorCostsMaster)attendedaconferenceon30thSeptember2015whereheconfirmedthatfiveoftheeightCostsJudgesattheSCCOwillretireinthenext5yearsandwillbereplacedbynewJudges.JenniferJameshasbeenappointedasanewCostsJudge.

submitbillsforassessmenttotheSCCOwillneedtogobackthroughtheirfilesandcodifyalltheirworkinaccordancewiththeJCodes.ThiswillbeaverytimeconsumingtaskwhichwillhavetobeeitherdonebythefeeearneroroutsourcedtoaCostsLawyer.

TheimportantpointtotakeawayisthatallfirmsmustensurethatgoingforwardtheyhavecasemanagementsystemswhichhavetheabilitytorecordtimeinaccordancewiththeJCodesotherwisetheyarelikelytogotogreatexpensetoprepareBillsandinalllikelihoodwillnotbeabletorecoverthecostofthesameinthelongterm.

InterestinglyMasterGordon-SakerdidsaythatifpeoplefiledthenewformatBillofCostsitwashighlylikelytheywouldgetamuchearlierhearingdate.InrelationtothecostshearingtheideaisthattheMasterwillhavealargescreenfacinghimonwhichheamendstheBillelectronicallywhilstthereisasecondaryscreenfacingtheadvocateswheretheycanseewhattheMasterisactuallychanging.

Inowturntotheproposalofapplyingfixedfeestonoiseinducedclaimsand

James is the Managing Partner of Elite Law Solicitors, The Solicitors Who Specialise In Costs. He began his professional career as a Costs Draftsman in 2001 and later qualified as a Solicitor, working for McMillan Williams (MW) as the Head of the Costs Department and subsequently as Head of Revenue Generation. Whilst at MW James was responsible for supervising costs aspects relating to all fee earners practicing in the areas of personal injury, clinical negligence, family, civil and professional negligence. James was also part of the management team that dealt with MW’s expansion from a small high street practice to a practice employing over 250 staff over 16 branches.

“....many Solicitors will need to think ahead and plan for some of

these changes, whether they would like to or not.”



verycomplexandoftencostsexceeddamages.IfsuchamatrixweretobeuseditwouldundoubtedlyleadtomanypotentialClaimantsbeingunabletoaccessjustice.

AsafurtherpointitshouldalsobenotedthattheGovernmentandtheinsurersarealsolookingatcappingATEpolicypremiumsforclinicalnegligenceclaims.

TurningtocasesinvolvingminorsPart21ofthe

CPRwaschangedearlierthisyearforthoseofyoudonotknow.Rule21.12changedinthatitnowallowstheCourttosummarilyassesscostsatapprovalhearingswheredamagesarelessthan£25,000.ThismeanstheycanassessthesuccessfeeandtheATEpremium.

Anexampleoftherulechangeinactioncanbeseeninthecaseof(1)A(2)M–v-RoyalMailGroup[2015]CC(Birmingham)14/08/15.InthiscasetheJudgeruledthata100%successfeewasunreasonabledespitethe25%capimposedinclinicalnegligencecases.Liabilitywasadmitted.HealsoquestionedtheneedforATE.Hecriticisedthelackofabespokeriskassessment.HeeventuallyorderedtheDetailedAssessment.Thereisanecdotalevidencethattherehavebeenanumberofthesecasesoverthecountry,someofwhichareactuallybeingappealedwhereliterallyalltheDJsaredisallowingsuccessfeesincasesinvolvingminorsatinfantapprovalhearings.

InrelationtomediationtherecentcaseofLaportevCommissionerofthePoliceoftheMetropolis[2015)isofparticularsignificance.Thiscaseisveryrecentandessentiallywillputyouinapositionto

clinicalnegligenceclaims.Therelevantcommitteesareataverypreliminarystageoflookingatwhetherfixedcostscanbeappliedtothesetypesofclaims.ItisinterestingtonotethatthesearetheonlytwoareastowhichtheGovernmentwishestoapplyfixedfeesparticularlywhenoneconsidersthatthepayingpartywilleitherbeinsurersortheGovernment.

Inrelationtoclinicalnegligenceclaimstheproposalistosetfixedfeesforclaimswheredamagesdonotexceed£250,000indamages.TherehasbeennorealdiscussionastowhatthefixedcostswillbeintheendhoweverthemodelthatwassuggestedbyLordJacksonwasthatitisliterallyapercentageofdamagesupto£250,000thatconstitutesthefixedfee.Suchamatrixwouldbeghastlyasitdoesnottakeintoaccountthefactthatmostclinicalnegligenceclaimsare

understandwhatcostsconsequencesapplywheremediationisrefused.InsummaryevenifyouwinattrialandyoufailedtomediatethepresidingJudgecanmakeanOrderforcoststhatisdisadvantageous.ThisdidhappeninLaportewherethecasedidgototrial,theydidwinbutbecausetheyrefusedmediationtheJudgemadeapercentagereductiontotheoverallpotentialawardforcosts.

Inthisregarditisimportanttonotethatasof1stOctober2015therehasbeenaCPRrulechangethatisencouraging‘earlyneutralevaluation’.ThisisatypeofmediationthatisactuallyadministeredbytheCourt.Interestinglythereisnorequirementforthepartiestoagreetoit,theJudgecanjustorderit.

FinallyIturntocostsintheCourtofProtection.TherehasbeenanimportantchangetoCourtofProtectionclaimsasofthe1stOctober2015wherebycostsestimatesnowhavetobeprovidedwhentheannualreportiscompletedandwillhavetoaccompanyanyBillsubmittedforassessmentattheSCCO.TheformatoftheestimatewillfollowtheoldFormH.

Theabovechangestocurrentcostspracticeismerelyabriefsummaryandmanymoreareafoot.NodoubtmanySolicitorswillneedtothinkaheadandplanforsomeofthesechanges,whethertheywouldliketoornot.

James ScozziEliteLawSolicitorsTheSolicitorsWhoSpecialiseinCosts

“...all firms must ensure that going forward they have case management

systems which have the ability to record time in accordance with the

J Codes otherwise they are likely to go to great expense to

prepare Bills...”

“...If such a matrix were to be used it would undoubtedly lead to many potential Claimants being unable to

access justice.”



INHERITANCE TAX PLANNINGMark Green looks at Inheritance Tax Planning: Discounted gift trusts

were once the lucrative preserve of life assurance companies but now sole practitioners can use them as an opportunity for new work

tosaveIHT,andenjoynofurtherbenefitfromit,isjustnotfeasible.

ThisiswheretheDiscountedGiftTrust(orDGTasitiscommonlyreferredto)canproviderealadvantagesforolderclients–itallowsthemnotonlytheabilitytomakeatransferofvalueforIHTpurposeswhichwillfalloutofaccountbutalsoallowsthemtoreceiveregularfixedpaymentsfromthetrustduringtheirlifetime–whichtheycanusetosupplementtheirincome.

How does a DGT work?

Whentheclient,asthesettlorofthediscretionaryDGT,establishesit,heorshemustchoosethetrusteeswhowilladministerthetrustand,althoughthesettlorwillnormallybeoneofthetrustees,itisagoodideaforaprofessionaltrusteetobeappointed.Thesettlorwillalsochoosethebeneficiaries,forexample,thesettlor’sspouse,children,grandchildrenetc.andthetrustsfromwhichtheywillbenefit.

Whenthetrustisbeingestablished,thesettlorwillneedtochoosethelevelofregularfixedcashpaymentsheorshewillreceivefromthetrust–thisisreferredtoasthesettlor’sretainedrights.Forexample,thesettlormayspecifyacashamountof£20,000eachyear.

Thesettlormustalsochoosethedatesinthefuturewhenthesecashpaymentswillbemadebythetrustees.Forexample,thesettlormayspecifythatthecashamountof£20,000willbepaidfromMay2016andoneverysubsequentMaythereafteruntileitherthesettlor’sdeathorthetrustfundbecomesexhausted,whichevereventoccursfirst.

Manyclientshavebuiltupsignificantsavingsandinvestmentsthroughouttheir

lifetimeandnowretiredusetheirsavingsandinvestmentstosupplementtheirincome.Sothethoughtofcompletelygivingawaytheirwealthtotheirchildren

Thesettlorcanonlyreceiveapaymentifheorsheisaliveonthosedates.

What is the gift?

ThetransferintotheDGTcomprisestwoelements:the‘discount’andthe‘discountedgift’.The‘discount’istheactuarialvalueofthesettlor’sretainedrightsbasedonthesettlor’slifeexpectancyandisascertainedbyunderwriting.ThemajoradvantagewithDGTsisthatthevalueofthesettlor’sretainedrightswillbeimmediatelyoutsidethesettlor’sestateforIHTandimportantlyonthesettlor’sdeaththeretainedrightswillhavenovalueforIHTpurposes.

The‘discountedgift’isthevalueofthetransferlesstheactuarialvalueofthesettlor’sretainedrightsandthisvaluewillbeoutsidethesettlor’sestateforIHTpurposesprovidedthesettlorlivessevenyearsfromthedateofthegift.

Forexample,let’sassume£400,000hasbeentransferredintoaDGTandacashamountof£20,000ayearwillbepaidtothesettlor.Thediscountforasixtyyearoldsettloringoodhealthwouldbearound£281,676andthediscountedgiftwouldbe£118,324.

Therefore,thediscountofover£281,000willfalloutsidethesettlor’sestateforIHTimmediatelywiththediscountedgiftamountfallingoutsidetheestateaftersevenyears.

Traditional packaged solutions

LifeassurancecompaniesdevelopedtheDGTasapackagedIHTplanningsolutioncomprisingadrafttrustdeed,aninsuranceproduct(normallyanoffshoreinvestmentbond)intowhich

Mark Green is Managing Director of I-Tax Solutions Ltd and he has worked in the field of taxation for over 30 years. He started his career with the Inland Revenue and later moved into the financial services sector, spending twenty years working for a number of well-known life assurance companies in senior tax roles, including Head of Tax and Estate Planning at Legal & General. He was instrumental in arranging the financing for the Eversden case to be successfully heard before the High Court and Court of Appeal. He also spent many years sitting on the Association of British Insurers committee dealing with tax changes affecting trusts and life assurance products and was frequently involved in HMRC working groups as well as meetings with the Treasury.

For the past two years he has been an independent tax and trust specialist working on his own account for clients, who range from individuals to a high street bank, and has developed a suite of inheritance tax planning solutions for clients who want to retain access to income from equities or let properties.



ThefactthatthetrusteespayincometaxandCGTduringthesettlor’slifetimeusuallyismorethanoutweighedbytheadvantageofpayingsignificantlylesstaxoverallandavoidingthispotentiallylargeincometaxclawbackchargewhenthebondiseventuallyencashed.

Independently packaged solutions

LifeassurancecompaniesstillmarketpackagedDGTswithoffshoreinvestmentbonds,eventhoughthetaxefficiencyofthebondhassignificantlyreduced,butnowadaysthereisalittlemorechoiceforbothclientsandadvisers.

Therearenowsomeindependentcompanies,suchasourselves,whoareofferingpackagedDGTsbutwithoutpre-selectedinvestmentsforthetrust.TheyprovideatrustdeedsettledbyCounselandotherservices,suchasunderwriting,butdonotgivelegalandtaxadvicedirectlytotheclientorprovideinvestmentadvice.Insteadtheinvestmentadviceisgivenbyanappropriateinvestmentadviserappointedbythetrusteesoncethetrusthasbeenestablished.

InthiswaythesolicitorcanprovidethelegalandtaxadvicetotheirclientswhowanttosetupaDGT.Thesettlor’sowninvestmentadviserscouldbeinstructedbythetrustees,ascouldthesettlor’saccountantstoproducetrustaccountsandtaxreturns.Thelegal,taxandotheradvicethatwassocloselyentwinedwiththeinvestmentadviceinthepackagedDGTsolutionofferedbylifeassurancecompanieshasbeenseparatedout

thetrusteeswillinvestandotherservicessuchasunderwriting.ThesesolutionsweremarketedonthebasisofthetrustprovidingtheIHTsavingsfortheclientwhiletheoffshoreinvestmentbondprovidedincometaxsavingsbywayofdeferringthetaxchargeuntiltheencashmentofthebondafterthesettlor’sdeath.Butasanoffshorebondisaninvestmentproducttheninvestmentadvicebyaregulatedpersonisrequired.Unfortunately,theneedforinvestmentadvicewassocloselyentwinedwiththelegalandtaxadviceastoprecludemanysolicitorsfromtheadviceprocess.

ThatpositionhasnowchangedbecausetheoffshoreinvestmentbondisnolongerastaxefficientfortrusteesofaDGTtoholdcomparedwithcollectiveinvestmentssuchasOEICsandunittrusts,forthemajorityofolderclients.Thereasonforthisisverysimple–incometaxrateshaveincreasedwhilecapitalgainstax(‘CGT’)rateshavedecreased.

Offshoreinvestmentbond‘gains’(whichcomprisebothincomeandcapitalgrowth)arefullysubjecttoincometaxonencashmentofthebond.Dividendincomereceivedfromcollectiveinvestmentsissubjecttoincometaxasitarises(i.e.thereisnodefermentofthetax)butthetrusteesbasicratetaxliabilityonthedividendincomeismetbythe10%taxcreditattachedtoit.Thisisasignificanttaxadvantageforcollectiveinvestmentsandanadvantagenotavailabletooffshoreinvestmentbonds.Evenwiththeproposedchangestodividendtaxcreditsin2016,collectiveinvestmentsshouldstillhavetheadvantageoveroffshoreinvestmentbonds.

Inaddition,thesharesofthecollectiveinvestmentcanbesoldbythetrusteesduringthesettlor’slifetimeandanycapitalgainsarisingfromthedisposalofthesesharesaresubjecttoCGT.AtrustalsohasitsownCGTannualexemptionwhichcanbeutilisedeachtaxyeartostripoutcapitalgainsfromcollectiveinvestmentsbutcannotbeusedwithoffshoreinvestmentbondswhichareonlysubjecttoincometax.

withthenewindependentlypackagedarrangements.

How do HMRC approach DGTs?

ThepotentialIHTplanningbenefitsofDGTsforclientsisobvious.ButaretheytoogoodtobetrueatatimewhentheGovernmentwantstoclampdownontaxavoidanceconsideredtobeabusive?Fortunately,DGTsarewellknowntoHMRCandarenotconsideredbythemtobeabusive.TheUKanti-avoidancetaxlegislationsimplydoesnotapplytothem.Onereasonforthisistheirinflexibilityoncetheyhavebeensetup,becauseneitherthesettlornorthetrusteescanincreasethesettlor’scashpaymentsoncetheyhavebeenfixedattheoutsetandtheycannotbringforwardthedatesinthefuturewhenthepaymentswillbemadetothesettlor.Therefore,DGTshavebeenconsideredbyHMRCtobeacceptabletaxplanning.

An opportunity for new work

ForsolicitorsfacedwithanolderclientwhowouldbenefitfromlifetimeIHTplanningbutwhoneedtheirsavingsandinvestmentstosupplementtheirincome,theindependentlypackageddiscretionaryDGTsareapotentialsolutionandonethatallowsthesolicitortoprovidethelegalandtaxadvicetotheirclient,whilsthandingtheotherservicesrequiredtosetupandadministeraDGTtootherspecialists.

Mark Green BA, LL.M, ATT, TEP, FPFS

DirectorI-TaxSolutionsLtdmarkgreen@i-tax-solutions.comwww.i-tax-solutions.com



Talking to the SRA –thereareapproximately300ofthemregisteredatpresent.Theideawastheywouldcreateakindofone-stopshopbutthathasnothappened.ElsewhereithasbeenreportedthatthecostoflegalserviceshavenotcomedownasaresultofABSwhichiswhatitscreatorsintended.ThishassomewhatvindicatedthesubmissionsmadebyourCommitteeatthetimeABS’swereintroduced.

TheSRAaretomakesomechangestotherulesrelatingtoMulti-DisciplinaryPartnerships–Ithinkprobablythisisaresultofthelackof“marketvalue”ofABSandthefactthatmanyprofessionalfirmsnowseemtosuccessfullyoperateasMDP’swhichispossiblyamorecomfortablewayforprofessionalpeopletooperate.

ThenewCEO,PaulPhilip,islookingatathreeyearstrategyonequalityanddiversity;thethinkingbehindthisistotryandcreateasolicitorsprofessionwhichislesshideboundbytraditionalattitudesandmoreaccuratelyreflectscharacteristicsofsocietywhichisseekingequalityanddiversityasageneralobjective.WepointedoutthatimplementationofthiswithanSP’sbusinessisquitedifficultbecauseoftheseverecommercialconstraintsuponanSP’spracticeasnumbersandcharacteristicsofstaffarelikelytobeseverelylimited.OnemightindeedwellaskwhythisisrelevanttoanSPpractice(bearinginmindthemajorityofSPsdonothaveenoughstafftobediverse)buttheobjectoftheexercise(whichIunderstandhasbeeninitiatedbytheLegalServicesBoard)istocreateaprofession

TheNationalExecutiveCommitteeoftheSPGhavehadasmallgroupinplaceforanumberof

yearstomeetregularlywiththeSRA,comprisingmyself,SushilaAbraham,HamishMcNair,LubnaShuja(oneofourtworepresentativesontheLawSocietyCouncil)andHilaryUnderwoodSPG Co-ordinator.

ThesemeetingsaredesignedtointerfaceataninformallevelwithspecialistmembersoftheSRAtopromotemutualunderstandingbetweenthemandourselvesandforustokeepupwithcurrentthinkingwithintheSRA.

ThisisanupdatesincemylastarticleinSOLOintheAutumn/Winterof2014Edition.WehavehadmeetingswiththeSRAinDecember2014,April2015andJune2015.WiththeLegalServicesBoardtheywanttoidentifythekeyprofessionalvaluesthatmakeasolicitorandthecorevaluesofthesolicitorsprofessionwhichmakesitsdistinctfromtheactivitiesofnon-regulated“lawyers”.ThemuchheraldedABSscenariodoesnotseemtohavetakenoffasexpected

whichismorediverseandreflectssocietyasawhole.ItisnotclearhowtheSRAexpecttoactionanyconclusionsontheoutcomeofthediversitysurveythatweallcompletedrecently.

AnothertwinkleintheSRA’seyeistogetsolicitorsfirmsintomodernthinkingandtoencouragetheprofessionbyonemeansoranothertohaveabusinessplanforeachPractice.WehighlightedtheproblemofSP’ssettingupwithlimitedexperienceinthisfieldandthehandicapofnothavingprevious“tradinghistory”whichwouldfurnishideasandstatisticsforcreatingabusinessplan.WehopeasaresultofourdiscussionthatthespecialpositionofSPs(especiallynewones)willbeexaminedmoreclosely(asformyself,whenIstartedasanSP,Ihadnobusinessplanwhatsoever).WehavehaddiscussionswiththemastoaschemeofmentoringfornewSPsneedingguidanceonstartingup.

David Leigh-Hunt is an Executive Committee Member and fronts the SRA liaison sub-committee which meets regularly with the SRA.

“....the cost of legal services have not come down as a result of ABS which is what its creators intended. This has somewhat vindicated the

submissions made by our Committee at the time ABS’s were introduced.”

“....the SRA have now introduced a one-off authorisation for an SP’s practice which will remain good for

the rest of the lifetime of that Practice.”



Wearepleasedthat,followingourdiscussionsaboutsimplifyingthePCrenewalsprocedure,theSRAhavenowintroducedaone-offauthorisationforanSP’spracticewhichwillremaingoodfortherestofthelifetimeofthatPractice.

Atour20thAnnualConferenceon8th/10thMay2015wewerepleasedtowelcomeasaspeakerRichardCollinswhoisSRAExecutiveDirectorforPolicy,Standards,Strategy,andResearch.IhaveknownRichardforanumberofyearsandfoundhimempathetictoissuesconcerningSPs.RichardspokeabouttheSRAscurrentprogrammetocreateregulatorysupportforsmallfirmsandsolepractitionersinawaywhichissupportiveinsteadofheavy-handed.AtthemostrecentmeetingwehadwithoursmallgroupwiththeSRAwespentsometimediscussingthat.TherewillbechangestothewaysmallpractitionersareauthorisedbeingbroughtinNovember2015.ThereisinformationaboutthisontheSRAwebsite.TheyareputtinginplaceadedicatedteamforSPsastheyrecognisethattherunningofanSPsofficeisverydifferentfromthatofmulti-partnerfirms.

AnothermatterwehavediscussedwiththeSRAisitsconsultationonconsumercreditregulationapplicabletocreditactivityengenderedbysolicitors.TheSPGNationalExecutivefiledaresponsetotheirconsultationpaper.

TheSRAareengagedcurrentlyinrevisionoftheirHandbook.ArevisedversionwasrecentlypublishedinApril2015.

ItappearsthatQASAisstillinthemeltingpot.AlthoughtheobjectorstotheSRA’sproposalsdidnotwintheircaseattheSupremeCourtithasgiventheSRApeoplesomefoodforthoughtandtheyarereviewingthescheme.

AtourrecentmeetingIagainraisedmypethobby-horseofhavingasingleapplicationformforprofessionalindemnityinsurancerenewalsothatthecategoriesofworkundertakenlistedontheSRAformarethesameasthataspresentedtounderwriters.TheSRAcontinuetothinkthatitisnotfeasiblebecauseunderwriterswishtobeabletodrafttheirformsinindividualways.

WehavealsospentsometimeondiscussingwiththemprovisionsforrunningSPsPracticesorclosingthemwheretheSPbecomeincapableofrunningtheiraffairs.ThisisasensitiveareaandtheSRAareverykeenthatpeopleshouldhaveproceduresinplacetoprovideforincisivemanagementintheeventofanSPbecomingincapablesoastoavoidtheSRAhavingtotakethefall-backpositionofanintervention,Thedistilledwisdomfromourdiscussions(currently)isthattheSRAdonotappeartohavestrongviewsastowherethemanagerofanSPsPracticecomesfrombutthepersoninchargeofthemanagementmustbeasolicitorwithacurrentpractisingcertificate.Forexample,thispersoncouldbealocumorcouldbeanemployeeoftheSPorarelativeetc.ItwouldbenecessarytosecurerecognitionofthispersonasaCOLPand/orCOFA.GuidanceonthisisprovidedinChapter7oftheSRAHandbook.IfaparticularproblemarisesSPsareinvitedtocontacttheHeadofEthicsGuidance.ItishoweverwiseforanSPtoconsidercreatinganLPAandprovisionsinaWilltocovermanagementofthePracticeintheevent(althoughthesearenotatpresentmandatory).

Anothermatterreviewedwastheissueoftherequirementtohaveanaccountant’sreportseachyear.BasicallytheSRAfoundthattheycouldnotcopewiththeinfluxofover10,000accountant’sreportseachyear.

Myself,Ihavealwaysderivedcomfortfrom“passing”myaccountant’sreportpreparedfortheSRAandIamstilloftheviewthatsomeformofcertificatefromthepracticeaccountantisapluspoint.Wewereinvitedtoattendameetingon16thApriltodiscussthis.MycolleagueHamishMcNairattendedthemeetingonourbehalf.

AnotherissueoflongtermstrategyfortheSRAismaintainingahighlevelofcompetenceamongstsolicitors.TherealityofCPDaccreditationovertheyearshasbeenthatagoodattendancerecordatseminarsproducesacachetbutdoesnotnecessarilygoeitherforanefficientPracticeoracompetentpractitioner.TherearemanyapocryphalofstoriesofpractitionerswhohavebeenattendingseminarsforthelastfewmonthsoftheCPDyearandtakingupanysubjectthathappenstobegoingwithoutfocusinguponwhatshouldbethelevelofcompetenceintheirparticularwork.

InFebruary2015IwasinvitedbytheSRAtojoinagroupofotherSPsforaworkshopwithspecificreferencetothepromotionofcompetenceintheplaceofthediscontinuanceofCPD.ThiswasrunbyRichardWilliamswhoisPolicyAssociatewiththeSRAandhasbeeninvolved,amongstotherthings,withthedevelopmentofQASA.Therewasconsiderabledebateastohowtoencouragepractitionerstoensurethattheyareconstantlyuptothemarkinthelegalsubjectswhichtheypractice.Thisistoencourage“continuingcompetence”astheSRAcallit.TherearenowdetailsontheSRAwebsiteannouncingthechangesandexplainingtheprinciplesofthenewprocedures.Theemphasiswillbeongettingpractitionerstouseatemplatedeviceonthewebsitetoassesstheirownresponsestomaintainingcompetence.

David [email protected] 2015

“....the SRA are very keen that people should have procedures in place for provide for incisive

management in the event of an SP becoming incapable...”



Hilary Underwood, former legal aid family lawyer, and SPG Co-ordinator, reviews ‘The Invisible’ by Rebecca Lenkiewicz, a play examining the impact of legal aid cuts on the fabric of our society.

I hopethatmanyofyou,likeme,willhavemanagedtocatchaperformanceof‘The Invisible’

attheBushTheatreduringthesummer.Ifyoudidn’t,youcanbuyacopyoftheplaytextfromthetheatreandIcanpromiseyouthatit’swellwortharead.

‘The Invisible’isaplaywrittenbyRebeccaLenkiewicz,thefirstlivingfemaleplaywrighttohaveanoriginalplay(Her Naked Skin) stagedontheOlivierstageattheNationalTheatre.Rebeccawrote‘The Invisible’inresponsetothereal-lifecutstolegalaid.TheplayweavestogetherthestoriesofordinarypeoplefightingfortheirrighttojusticeandwassponsoredbyTheLawSociety,withAndrewCaplen,formerLawSocietyPresident,writingtheforewordtotheplaytext.TheplaywasperformedatTheBushTheatrefrom3rdJuly–15thAugust2015,withAlexandraGilbreathintheleadroleoflegalaidlawyerGail,andformerEastEnderactorNicholasBaileyintheroleofdistraughtdivorcee,Ken.

Theplaypowerfullyhighlightedtheplightoftheweakandthepowerless–theinvisible–whoaremostimpactedbythelegalaidcutsandthedenialofthatmostfundamentalofrights,justice,whichunderpinsthewholeruleoflawandwithoutwhichtruedemocracyisanonsense.

ItwasmaybebecauseIlivedandbreathedlegalaidforsolongandmaybebecausethecutsimpactedonmyclients,mystaffandmyself



somassivelyandfundamentally,thatIhadarealsenseofexpectancyabouttheplay,alongsideanervousapprehensionthattheymightnotgetitquiteright–thattheymightnottacklethefall-outanddevastationwroughtinpeople’sliveswithgut-wrenchingreality.AndIwasdesperateforsomeonetotellthestoryaccurately,withoutthesugar-coatingofpolitenessandpolitics-asiftheyreallydidunderstandandwerenotjustgivingtrendylip-servicetothetopicofthehour.Thiswassuchavaluableopportunitytoraisetheprofileofthisissueintheworldofthearts,notpolitics,andIwasanxiousthatitshouldnotbewasted.

IamsogladtosaythatIwasnotdisappointed.Otherreviewshavedescribedtheplayas“provocative,edgyanddark”,“strongandimpassioned”,“warmlyinsightful”and“generous-hearted”.Itwasallofthosethingsandmuchmore…andwithagooddoseofmuch-neededhumourthrownintoo,justlikelife,tolightentheemotionalload.

Theplaywasdark,powerfuland,attimes(particularlyduringthesecondhalfoftheperformance),jaw-droppinglymoving,exploringnotonlythedifferentstoriesofthevulnerableinoursociety,butalsothestoriesofthelegalaidlawyersthemselvesandthestaffwhocareasmuchabouttheclientsasthelawyersdo.

Theplaydivedhead-firstintoissuesofdomesticviolence,homelessness,theelderly,brokenfamilies,fathersaslitigantsinperson,depression….andultimatelysuicide.

Therewasagoodexposeofthelonghoursworkedbylegalaidlawyersandthehugeimpactofthisuponthepersonallivesofthoselawyersandtheirfamilieswithonelawyer’spartnersaying“Iworkeditouttheotherday….thehours…you’reactuallyonlessthanminimumwage.”Setstarklyagainstthiswasanotherexposeofthegrossmisperceptionofmanymembersofthepublicof‘fatcatlawyers’throughthecharacterofoneofthemenGailmeetsonafirstdate:“Yougoonrobbingthecountrywithyourlawyer’sfeesand

chargingpeopleahundredquidaletter.Youcontinuetobealegalparasite…goodlucktoyouinfleecingthenation.”

TheplaywrightalsohighlightedthecommitmentandpassionoflegalaidlawyersandwhatdrivesthemtokeepgoingwhenafriendofGailsays:“Whathappenstopeople,Gail….it’snotyourfault”towhichGailreplies“No,Iknowit’snotmyfaultbutit’smyjobtotryandsortit.”Herfriendwarnsher“Justbecareful.Lookafteryourself.Don’tbecomeamartyrtothecause.”

Therewasalsoasensitiveandpoignantportrayalofthefinancialstraincarriedformanyyearsbythelegalaidlawyersandultimatelytheemotionalimpact,exhaustionanddespair,ofthefinallossofthepracticeasaresultofthecuts,withlinessuchas“Theycutourbudgetbytwo-thirds.Thatshouldbeimpossible.Buttheydidit.”and“Ican’tkeepusonhere….We’llgo.Andalltheothersmallfirmswillgo…..Andpeopledon’tevenknowaboutit.”

Forme,themostheart-stoppingsceneswereplayedoutbythecharacterofShaun,afunny,butverylonelyanddepressedelderlyIrishman(excellentlyportrayedbyNiallBuggy).Hisscenesinvolvedabravelystarkexaminationofissuesaffectingvulnerable,olderpeople–his“KingLear-like”sceneswerethemostmovingandthemostinsightfulaboutthetrueinvisibleliveslivedbysomanylonelypeople.Hiswordstothelawyer,Gail“Twoyearsagoyousavedmylife”capturedthewholedebateinanutshell.Hedescribesheras“heroic”buttwoyearson,withoutGailtohelphim,hetakeshisownlife.Theimpactofthecutsdon’tgetanystarkerthanthat“Amanneedsaroofoverhishead.Ordoeshe?Learmanagedwithout.Althoughheendedupalone.Andthendead.”

Thesceneryfortheplaywassimplebutfabulousforthepurpose–rowuponrowoflegalaidformsdanglingfromtheceiling.

ItwasclearfromtheperformancethattheactorsreallydidcareaboutthemessageofthisplayandwhenImet

andspokewithAlexandraGilbreathaftertheperformance,ondiscoveringthatIwasalegalaidlawyerandthatwatchingherperformwaslikelookinginaverythought-provokingmirror,sheenvelopedmeinawarmandheartfelthug!

MyfavouritelinefromtheplayhastobeGail’scuttingremark“We’renotgoodwomen.We’reexpertpractitioners.Wemaynotpower-dressbutwe’renotaknittingcircle…..Wehavedonesomeamazinglawinthiscentre.Oneofthebiggestcasesaboutunfairdismissalwasresolvedhere.Itchangedthelaw.”Iwonderhowmanypoliticianstookthetroubletowatchtheplay?

Afterthedifficultiesandpainofnavigatingthecuts,andclosingmyoffice,itwassomethingofasalvetothewoundtohaveaplaywhichhasbeendedicatedintheplaytext“Toalllegalaidlawyers,pastandpresent,withrespectandadmiration.”

Thisplaybrokenewgroundinputtingthejusticesystemoutonthetableforalltoseeandexamineandforthat,itistobeapplauded–andIcertainlydid.

Myoneregretabouttheplay?IwishIhadthoughtofit(orhadthetimetowriteit)first!!Butseriously,ahugethankyoutoRebeccaLenkiewiczandallthoseinvolvedintheproductionof‘The Invisible’ andforcaringenoughtoputthereal storyoutthere….IechothewordsofthisfinalreviewfromThe Stage“It’smessageneedstobeshouted,toberoared…”

Hilary Underwood

SPGCo-ordinatorand formerlegalaidlawyer

October2015

p.sTheirony(andfamiliarity!)ofafirstdatewithadivorceedadwhospendshalfthetimetalkingabouthisex-wifeandtheotherhalfaskingforadviceabouthowtohavecontactwithhischildrenwasnotlostonme….ahybridbetweenBridgetJonesandAllyMcBeal!



‘TILL DEATH US DO PART?’ – A LOOK AT THE CURRENT LAW ON PRE-NUPTIAL AGREEMENTS

Thisisnotanexhaustivelistandthecourtwouldconsiderthefactsoftheindividualcase.

The landmark case:

4. ThejudgmentoftheSupremeCourtinRadmacher v Granatino [2010]UKSC 42,standsasalandmarkinthehistoryofEnglishmatrimonialanddivorcelaw.Thiscaseestablishedthatpre-nuptialagreementswerenowtobegiveneffecttosolongasthepartiesenteredintoitfreelyandwithafullunderstandingoftheagreement’sconsequences.

5. ThefactsofRadmacherareasfollows.ThepartiesweremarriedinLondonin1998.ThehusbandisFrenchandthewifeisGerman.Theyenteredintoanante-nuptialagreementbeforeanotaryinGermanythreemonthsbeforethemarriageatthewife’sbehest,

What are pre-nuptial agreements?

1. Aprenuptialagreementisadocumentinwhichacouplesetouttheirrightstoanyproperty,debts,incomeandotherassetspurchasedtogetheroracquiredindividually,andhowsuchaforementionedassetsshallbesharedintheeventthatthemarriagecomestoanend.

What is the current status of pre-nuptial agreements?

2. Thecourtwhenconsideringgrantingancillaryreliefisnotobligedtogiveeffecttonuptialagreements–whetherpre-nuptialorpost-nuptial.Thepartiescannotoustthejurisdictionofthecourt.Thecourtwillconductanassessmentundersection25oftheMatrimonialCausesAct1973.Howeverthecourtmustgiveappropriate weight totheagreement.ThecaseofRadmacherraisestheissueoftheprinciplestobeappliedbythecourtwhendecidingtheweighttoattachtothepre-nuptialagreements.

Will the pre-nuptial agreement stand in court?

3. Thecourtwillconsiderseveralfactors,summarisedasfollows:

a. Didthepartiesunderstandtheimplicationsoftheprenuptialagreement?

b. Didthepartieshaveindependentlegaladvice?

c. Wereanyofthepartiesunderpressuretosignoragree?

d. Wastherefullfinancialdisclosure?

e. Wouldaninjusticebedoneiftheprenuptialagreementwereupheld?

Aysha is a barrister with 33 Bedford Row Chambers. She has extensive public authority experience, and was a Legal Adviser for several years at an Attorney General’s award winning Legal Advice Centre. Aysha also has broad experience encompassing family, civil and employment law. In this article, Aysha explores the current law on pre-nuptial agreements.

towhomthefamily’ssubstantialwealthwouldbetransferredifanagreementweresigned.TheagreementwassubjecttoGermanlawandstipulatedthatneitherpartywastoacquireanybenefitfromthepropertyorassetsoftheotherduringthecourseofthemarriageorafteritstermination.Thehusbandatthetimewasworkingasabanker;hedeclinedtheopportunitytotakeindependentadviceontheagreement.Thepartiesseparatedafter8yearsofmarriagein2006.Theyhadtwodaughtersin1999and2002.BytheendofthemarriagethehusbandhadlefthiscareerinbankingandembarkeduponresearchstudiesatOxfordUniversity.

The High Court:

6. ThehusbandappliedtotheHighCourtforfinancialrelief.TheHighCourtgrantedhimasuminexcessof£5.5million.Thiswouldaffordthehusbanda£100,000annualincomeforlifeandpayforahouseinLondonwherethechildrencouldvisithim.Thejudge



10. Secondlyinparagraph73ofthejudgmentitisstatedobiter,that“Ifthetermsoftheagreementareunfairfromthestart,thiswillreduceitsweight”.Theconceptoffairnesswillbeassessedinthelightiftheagreementoperatesunfairlyatthetimeofthebreakdownofthemarriage.

11. Thefactorssetoutinparagraphs68to73ofRadmacherareimportantinthesensetheyaregenerallyapplicable,theyareasfollows(Ihavesummarisedtheparagraphsinafewwords):

a. Paragraph68:“Ifanante-nuptialorindeedapost-nuptialagreement,istocarryfullweight,boththehusbandandwifemustenterintoitoftheirownfreewill,withoutundueinfluenceorpressure,andinformedofitsimplications”,(Free will and full awareness of implications).

b. Paragraph69:“…weconsiderthattheCourtofAppealwascorrectinprincipletoaskwhethertherewasanymateriallackofdisclosure,informationoradvice.Soundlegaladviceisdesirableforthiswillensurethatapartyunderstandstheimplicationsoftheagreement”,(Full disclosure of facts and independent legal advice).

c. Paragraph70:“Itis,ofcourse,importantthateachpartyshouldintendthattheagreementshouldbeeffective.…Thusinthefutureitwillbenaturaltoinferthatpartieswhoenterintoanante-nuptialagreementtowhichEnglishLawislikelytobeappliedintendthateffectshouldbegiventoit”.(Intention to be bound by the terms of the agreement).

d. Paragraph71:“Thefirstquestionwillbewhetheranyofthestandardvitiatingfactors:duress,fraudormisrepresentation,ispresent.Eveniftheagreementdoesnothavecontractualforce,those

factorswillnegateanyeffecttheagreementmightotherwisehave.Butunconscionableconductsuchasunduepressure(fallingshortofduress)willalsobelikelytoeliminatetheweighttobeattachedtotheagreement,andotherunworthyconduct,suchasexploitationofadominantpositiontosecureanunfairadvantage,wouldreduceoreliminateit.(Duress, fraud, misrepresentation or abuse of position would eliminate weight).

e. Paragraph72:“Thecourtmaytakeintoaccountaparty’semotionalstate,andwhatpressuresheorshewasundertoagree.…Anotherimportantfactormaybewhetherthemarriagewouldhavegoneaheadwithoutanagreement,orwithoutthetermswhichhadbeenagreed.(Party’s emotional state, maturity and the importance of the agreement).

f. Paragraph73:“Ifthetermsoftheagreementareunfairfromthestart,thiswillreduceitsweight.(Unfairness of terms).

Cases post-Radmacher

12. SincetheRadmacherjudgmentseveralcaseshavepassedthroughtheEnglishCourtsseekingtoapplyRadmacher principles.Ishallbrieflysetoutthecasesandasummaryofthefactsbelow,thiswillhelptoillustratetheaboveprinciplesinapplication.

13. InV v V[2011]EWHC3230(Fam):OnappealfromaDistrictJudge,CharlesJfoundthattheDistrictJudgehadfailedtoattachweighttoaSwedishmarriagesettlement.CharlesJexercisedthesection25MCA1973discretionandtookthestatutoryfactorsintoaccount.Themarriagewasthreeyearsinlength.CharlesJalsodepartedfromequalityprincipletotakeintoconsiderationpre-matrimonialassets.

tookintoconsiderationtheante-nuptialagreementbutreducedtheweightsheattachedtoitduetothecircumstancesinwhichitwassigned.

Court of Appeal:

7. ThewifesuccessfullyappealedtotheCourtofAppeal.TheCourtofAppealheldthattheagreementshouldhavebeengivenfullweight.Thehusbandshouldonlybegrantedprovisioninhisroleasfathertothetwochildrenandnotforhislong-termneeds.ThehusbandappealedtotheSupremeCourt.

The Supreme Court:

8. TheSupremeCourtbyamajorityof8-1dismissesthehusband’sappeal.

9. Paragraph68to74oftheRadmacher judgmentsetsouttherangeoffactorsthecourtwouldtakeintoconsideration.Importantlyinparagraph61ofthejudgmentitisnotedthatthe firstquestionwillbewhetheranyofthestandardvitiatingfactorsarepresent:duress,fraudormisrepresentation.Thesefactors

willnegateanyeffecttheagreementmayotherwisehavehad.

effectotherwise



aspossible;itshouldnotbelefttomomentsbeforethewedding.Thepartiesshouldbeabletodemonstratethattheyhavehadtimetoconsidertheagreementindepth.

b. Afulldisclosureoftheparties’assetsandliabilitiesneedstobemadepriortoenteringtheagreement.Solicitorsmaybeabletoprovideafinancialdisclosureformwithadeclarationforthepartiestocompleteandexchange.

c. Bothpartiesshouldtakeindependentlegaladvice,thismaybepossiblewithinthesamefirmifChinesewallsaresetupbetweenpractitioners.

d. Thetermsoftheagreementshouldbedraftedaspreciselyandclearlyaspossiblebutyetdetailedenough.ThisisamatterfortheSolicitors;everytermshouldbedraftedasunambiguouslyaspossible.

e. Theagreementshouldsetoutanyprovisionsforchildren.Greatthoughtneedstobeappliedtothisasthecourtshavedemonstratedthattheywillnotupholdanagreementwhichdoesnotmakeadequateprovisionforthechildrenofthefamily.

f. Theagreementshouldalsosetoutprovisionsforothermajorlifeeventssuchasillnessandunemploymentandwhattermswouldapplyinsuchevents.

g. Theagreementshouldtakeintoconsiderationpensions,insurances,inheritancesandtheacquisitionoffurtherassets.

h. Theagreementshoulddealspecificallywithpre-matrimonialassets,thoseacquiredbythepartiesoutsideoftheirmarriageorthatinheritedthroughtheirfamilies.

14. InB v S (Financial Remedy: Matrimonial Property Regime) [2012]EWHC265(Fam)therewasadisputed‘tacit’agreement,ifitcanbecalledthatatall.ItwasinrealitythedefaultmatrimonialpropertyregimeofseparationofgoodspertainingtoCatalonia.Neitherpartyhadtakenlegaladviceastowhethertheagreementwouldbebindingnorhadtheydiscussedtheagreement.MostynJafforded“absolutelynoweight”totheprenuptialagreementinthesecircumstances.

15. InKremen v Agrest (No. 11) (Financial Remedies: Non-disclosure: Post Nuptial Agreement) [2012]EWHC45(Fam)MostynJ.ThehusbandandwifewerebothRussian.AttrialMostynJfoundthatthehusbandhadnotfullydisclosedthetrueextentofhisassets.Thecouplehadbeenmarriedfrom1991to2007.WhentheirmarriageranintodifficultiesthecoupleenteredintoanIsraelipost-nuptialagreement,thiswassubsequentlyconvertedintoanorderoftheIsraelicourts.MostynJfoundthattherewasnotafullunderstandingbyeitherpartyoftheimplicationsofthepostnuptialagreement.Thisagreementalsodidnotfullyconsidertheneedsofthechildrentothemarriage.MostynJdidnotattachanyweighttotheagreementandproceededwiththesection25MatrimonialCausesAct1973exercise.

What practical steps should Solicitors take when advising clients?

16. Thefollowingtipsaredesignedtoassistthosewhoadviseclientswhenenteringintoprenuptialagreements.Thefollowingprinciplesshouldassistclientsreachagreementsbothpre-nuptialandpost-nuptialthatwillfallwithintheRadmacher principlesandbesuchthatthecourtmayattachweighttothem:

a. Apre-nuptialagreementshouldbedraftedandsignedasearly

i. Itmaybeadvisabletosetreviewswithintheagreement,asthemarriageprogressesintimeandchangesincharactercertainclausesmaybecomedefunctandtheneedforothersmayarise.Forinstanceifasecondhomeisacquired,thepartiesmaybeadvisedtoreviewtheiragreementasseekadvicefrommyinstructingsolicitors.Inthealternativeifthepartiesweretocomebyawindfalloraninheritancethereviewclauseoftheagreementmaybeactivated.

j. Finally,theagreementshouldbefairandrealistic,ifitappearsunfairtothoseinstructingme,itwillprobablyappearunfairtothecourt.Thoseinstructingshouldadvisetheclientstoreachasfairanagreementasispossible.

Aysha Miah

Barrister33BedfordRow

14.14.14.14. In



SOCIAL ENGINEERING: HOW CAN WE COMBAT THE FRAUDSTERS?

Withcriminalsconstantly‘uppingtheirgame’,it’simperativetotakestepstoprotectyourinterests.Whilstit’simportanttobecautiousintheeventofactivitythatappearstobeevenslightlysuspicious,investinginthenecessaryanti-fraudmeasures,andconstantlyreviewingthemtoensuretheyremainuptodate,shouldalsobeapriority.

Often,itcanseemthatpurchasingorrenewingyouranti-virussoftwareisanunnecessaryexpense,butthetruthisthatit’safundamentalmeanstoprotectingtheinterestsofyourbusiness.

Thisisimperative,becauseinacasewhereapasswordisfraudulentlyobtainedasameanstostealmoney,theonusisonthevictimtoprovethatrobustmeasureswereinplacethatshouldhavepreventedthecrimefromtakingplace.Ifyoufindyourselfunabletodoso,theresultscanbecatastrophic,withnolegalrecoursetorecoupthestolenfunds.

Astheoldsayinggoes,preventionisbetterthancure,andit’sadvisableforyoutotakeactionnowtoavoidthese

It’sasadfactthatastechnologybecomesincreasinglysophisticated,sodothetechniques

employedbycriminalstocommitfraudulentactivity.Here,PaulMcCluskey,HeadofProfessionalPracticesatLloydsBankCommercialBanking,examinesdifferentmethodsemployedbyfraudsters,andhowbesttocombatthem:

Socialengineeringisanevolvingpracticethatcombinespsychologicalmanipulationandhi-techmethodsinordertostealvitalsensitiveinformation,suchaspasswords,dataorPINnumbers.

It’samethodthattakesvariousguises,includingtheuseofattachmentsonemails,whichenablefraudsterstoaccessyourfilesandtrackyourkeystrokesshouldtheybeopened.There’salsoemailswhichreplicatethosesentbyyourbank,includingacloneofitswebsite,invitingunsuspectingrecipientstoentertheirusernameandpassworddetails.

Otherfraudtechniquesinvolvecriminalsmakingphonecallspurportingtobefromyourbank,withsophisticatedtechnologiesallowingagenuinephonenumberfromthebanktodisplayonyourcallerID,addingasenseoflegitimacy.

Fraudsterscanevenmanipulateyourphonelines.Thisenablesthemtointerceptanyattempttoverifythattheemailyouhavereceivedisgenuine,impersonatingarepresentativeofthebankintheprocessinordertogainevenmoresensitiveinformation.

issuesfromoccurringwithinyourbusiness.

Thefirststepistoensureyourviruscheckerisuptodate,fitforpurpose,keptupdated,andrunwithoutfaileachday.Thisshouldbesoftwarethatcoversvishing,malware,phishing,Trojanvirus,firewalls,anti-keyloggers,intrusiondetectorsandbotherders–andevenifyou’renotfamiliarwiththoseterms,anyexperiencedITtechnicianthatyouemployorcontractshouldbewell-versed.

It’salsoworthconsideringinvestinginadedicatedterminalforonlinebanking,whichisseparatefromthoseusedforemails,ensuringthatanyattemptedsocial-engineeringscamscanbethwarted.

Intheeventthatyoureceiveasuspiciousrequest,it’salsoworthdouble-checkingthatit’sgenuinebycallingyourbankfromadifferentphone,suchasyourmobileratherthantheofficeline,andgoingtoaknowncontactfirstbeforetryingapublicline.

Allinall,vigilanceiskey.Remember,nobankwilleveraskforfullonlinelog-indetails,passwordsorcardandreadercodesonthephone.Ifindoubt,it’salwaysadvisablenottotakeanyrisks,andtoprotectyourbusiness.

IssuedonbehalfofLloydsBankCommercialBankingbyCitypress

Press information: Laura O’Meara on 0121 314 4195 / [email protected]

Paul McCluskey is Head of Professional Practices, Commercial Banking, SME Key Markets with Lloyds Banking plc.

“...fraud techniques involve criminals making phone calls

purporting to be from your bank...”

“It’s also worth considering investing in a dedicated terminal

for online banking...”


SPG IN ACTION

Hilary Underwood is the SPG Co-ordinator, Editor of SOLO and deals with all matters concerning Local Groups and Legal Aid.

Martin Smith is leads and co-ordinates the Group’s responses to consultations.

SPGisconstantlyatworkrespondingtothemyriadofconsultationsissuedbytheSRA,LSB,MoJandotherbodieswheneverthoseconsultationsconcerntheinterestsofsolepractitioners.WethoughtyoumaywishtoreadsomeoftherecentresponsesthatwehavesubmittedonbehalfoftheGroup.Wewouldalwaysencourageyou,however,toputinyourownindividualresponsestoimportantconsultationstoensurethatthesolepractitionervoiceisheardloudandclear!Forthcomingimportantconsultationswhichimpactonsolepractitionersinclude:

SPG is constantly at work…….loud and clear!Forthcomingimportantconsultationswhichimpactonsolepractitionersinclude:

SRAAQuestionofTrust: http://www.sra.org.uk/sra/consultations.page

Closing date: 31st January 2016

LegalOmbudsman2016–2017BudgetConsultation http://www.legalombudsman.org.uk/?portfolio=budget-consultation-2016-17

Closing date: Monday 1st February 2016

SRATrainingforTomorrow:AssessingCompetence http://www.sra.org.uk/sra/consultations/t4t-assessing-competence.page.

Closing date: Friday 4th March 2016




RESPONSE OF THE SOLICITOR SOLE PRACTITIONERS GROUP TO THE SRA CONSULTATION REGULATION OF CONSUMER CREDIT ACTIVITIES

Question 1: Do you agree with the proposal that firms carrying on any regulated consumer credit activities should be required to seek authorisation directly from the FCA and not be able to rely on the Part 20 exemption set out in FSMA?

No.Thisproposalwouldresultinunnecessarycostandextraregulationonfirms.

ThepreviousabilityforlawfirmstorelyupontheOFTgroupconsumercreditlicence,whichhasnowtransitionedtotheexemptionundertheSRA’sexemptionarrangementsmadeunderPart20oftheFinancialServicesandMarketsAct2000(FSMA)hasenabledlawfirmstoengageinregulatedconsumercreditactivitieswithouttheadditionalburdenandcostofanadditionallayerofregulationbyasecondregulator,whichwouldbeengenderedbytheneedtoapplytotheFCAforauthorisation

Theareasofsolepracticemostlikelytobeaffectedbythisproposalare:

i) firmsundertakingdebtrecoveryworkaspartoftheirday-to-day-work;

ii) firmsundertakingdebtadviceaspartoftheirday-to-daywork;

iii) Theofferingofafacilitytoclientstomeettheirlegalcostsbywayofinstalments–suchproposalspotentiallyexceedingaperiodof12monthsandexceedingatotaloffourrepayments,butevenifwithinthoselimitations,suchagreementsmayincludeprovisionforinterest,thereforefallingoutsideoftheexemption.

ItisappreciatedthattheFCA’sregulatoryframeworkassetoutintheConsumerCreditSourcebook(CONC),isdesignedprimarilyforfinancialinstitutionsandimposingdetailedobligations,isvastlydifferenttotheSRA’sapproach,whichfocusesondevelopinganddeliveringregulationproportionatetothenatureofanentityinanoutcomes-focussedmannerandwiththeremovalofprescriptiverules.Itisappreciatedthatthoseapproachesmayseemtobeirreconcilable.

However,theFCA’sregulatoryframeworkfocusesonincreasingprotectionformembersofthepublicwhoobtaincredit.Assolicitorssubjecttoastrictcodeofconductwhoarealreadysubjecttoconsiderableregulatoryscrutiny,theFCAshouldsurelyrecognisethattherisksposedbytheregulatedlegalsectorareconsiderablylessthanthoseposedbythefinancialinstitutions.Therefore,whilsttheFCA’srulebooksetsoutdetailedobligationsonfirms,andtheSRA’shandbookisbasedonanoutcomefocussedsystemwhichisincompatiblewiththis,theunderlyingprinciplessetoutintheFCA’shandbookareparalleltothecorevaluesoftheprofessionunderwhichsolicitorsarejudgedundertheexistingSRAregulatoryregimeie.integrity,honesty,opennessandfairness.

ItalsoseemstobeanonsensethatthepreviousapproachoftheSRAinreferringproblematicissuesthataroseconcerningindividualfirmstotheOFTforassessmentcouldnotcontinuewiththeFCA,allowingtheSRAtoexcludeamemberfromthePart20arrangementsifnecessaryandrelyingupontheconsumercreditcapabilityandexpertiseoftheFCA.

TheprocessofapplyingforauthorisationbytheFCAwillnodoubtbeburdensome,time-consumingandthereforecostly.Further,thefeessetoutbytheFCAforindividualapplicationsforauthorisationrangebetween£100-£15,000dependentuponthesizeofthefirm’sincomeandwhetherlimitedorfullpermissionisappliedfor.Whilstitisacceptedthatforasolepractitionerfirm,thefeesarelikelytobetowardsthelowerendofthatscale,neverthelessanyadditionalregulatoryfeestobeaddedtothecostofPCrenewals,PIIandtheoverallcostofregulatorycomplianceforone’sfirmwillbe,atbest,deeplyunwelcomeandatworst,prohibitivetopractice.OnerathercynicallywonderswhetherthereisahopeonthepartoftheFCA,infailingtoprovidefurtherguidanceonPart20ashadbeenrequestedbytheSRA,thattheywillstandtogainsignificantlyfromtheadditionalincomegeneratedfromauthorisationapplicationssubmittedbyfirmsoutoffearofnon-compliance.

TheFCA’sthresholdcriteriaforqualificationarealsoamatterofconcern,particularlyforsolepractitioners.Inparticular:

i) WhatwilltheFCAconsidertobeaneffectiveleveloffirmsupervision?

ii) WhatwilltheFCAconsidertobe‘appropriatefinancialresources’,‘skillsandexperienceofthosemanagingthefirm’saffairs’?

iii) WhatwilltheFCAconsidertobeasuitablelevelofcompetenceandabilityofmanagement?

iv) WhatwilltheFCAconsidertobeanacceptable‘businessmodel’and‘strategyfordoingbusiness’?

WhilstitisacceptedthattheFCAatwo-tieredrisk-basedapproachtoauthorisation,andguidanceonwhetherfirmsneedtoapplyforlimitedorfullpermission,itissimplyimpracticalandoneroustoexpectsolepractitionerstohavethetimetoinvestinstudyingtheguidanceandcompletingtheapplication,giventhealreadyenormousamountsoftimethathavetobespentincompletingPCrenewalforms,authorisationrenewalform,PIIformsandthelistgoeson.



GiventhenaturalsynergybetweentheprincipleswithintheSolicitor’sCodeofConductandtheFCArules,itmustsurelybepossiblefortheFCAandSRAtocontinuetoworktogetherinmanagingandmonitoringtheperformanceandintegrityofthosefirmsinvolvedinconsumercreditactivitiesinthewayithasdonetodate.

ItissubmittedthattheSRAmustinsistthattheFCAprovideadditionalguidance,ashasalreadybeenrequested,onthePart20exemptionasitrelatestoconsumercreditactivityarisingoutof,orbeingcomplementarytootherprofessionalservicesprovidedtotheclient,sincethisisthedifficultythatmaymeanthatfirmswhoconductdebtrecoveryordebtadviceworkinisolationtoaclientmayneedtobeseparatelyandindependentlyauthorisedbytheFCA.Thereis,however,avastdistinctionbetweenfirmsthatmayneedtobeauthorisedforthispurpose(whomitisassumedreceiveaconsiderableportionoftheirfeeincomefromthissource)asopposedtoafirmwhomerelyoffersa‘payyourbillbyinstalments’optiontoaclient.

ItwouldbeanonsensetoforceallfirmstoapplyforFCAauthorisationduetolackofclarityonthepartoftheFCA,wheninfactonlyamuchsmallerandnarrowernumberoffirmsmayneedtodoso.ItisnotsatisfactorythatfirmsmayhavetodecidedtoapplyforFCAauthorisationonaprecautionarybasis,atgreatcostoftimeandmoney,purelytoavoidtheriskofpotentiallycommittingacriminaloffence.

Question 2: If you do not agree with the proposal, please offer any alternative suggestions for ensuring that the SRA’s regulatory arrangements in relation to consumer credit activities are targeted, proportionate and do not result in the incorporation of the FCA’s CONC and do not impose unnecessary costs and regulatory burdens on firms.

Asensiblealternativewouldsurelybeforthefirms(nodoubttheCOLPandCOFA)tocertify,aspartofthePCrenewalprocess,thattheirfirmiscompliantwiththeFCAconductofbusinessstandardsandtheFCAHandbookinordertoqualifyforongoingexemptionunderPart20.IthassurelyalwaysbeenforfirmstoensurethattheywerecompliantwiththeprovisionsoftheCCA1974andguidancepublishedbytheOFTinanyevent,inordertobenefitfromtheOFTgroupconsumercreditlicence,onthreatofbeingremovedfromit,ashasbeenthecaseforsomefirmsinthepast.

ItalsoseemstobeanonsensethatthepreviousapproachoftheSRAinreferringproblematicissuesthataroseconcerningindividualfirmstotheOFTforassessmentcouldnotcontinuewiththeFCA,allowingtheSRAtoexcludeamemberfromthePart20arrangementsifnecessaryandrelyingupontheconsumercreditcapabilityandexpertiseoftheFCA.

Itisdifficulttoseewhytheapproachshouldnowchangeandtheonusshouldnowshifttosuchanextentthatfirmsmustmaketheirownentirelyseparateapplicationforauthorisation?

SSPGwouldalsoechothepointsmadebyBirminghamLawSocietyinitsresponsetothisquestioncontainedinitsreplytothisconsultationdated12December2014.

Question 3: Do you have any views about our assessment of the impact of these changes and, are there any impacts, available data or evidence that we should consider in finalising our impact assessment?

Thefollowingscenariosmayverywellresultifthesechangesproceed:-

1. Ifthisproposalgoesahead,duetotheburdenandcostofadditionalanddual-regulation,manyfirms,includingmanysolepractitionerfirmswhocurrentlyofferdebtrecoveryordebtadviceworkmaynotchoosetobecomeFCAregulatedandsobedisinclinedtoofferthoseservicesinthefuture,whichwilllimittheirrangeoflegalservicesofferedtothepublic.ThoseClientswhowishtorestructure/refinancetheirdebtswouldhavetobeturnedawayandhavenooptionbuttogotononsolicitordebtmanagementfirms/loansharksetc.ortothenotforprofitsectorwhichisalreadyoverburdened.Regardingtheexemptionforcontentiousbusinesstheproposedchangeswouldresultinproceedingsbeingissuedafterlittleornoattempttoreachagreementwithdebtorswhichwouldnotbeinthepublicinterest.Inadditionthiswouldbreachthecivilprocedurerules,practicedirectiononpreactionconductindicatingtheproceedingsshouldbealastresortandalternativedisputeresolutionshouldbeconsideredfirst.

2. Giventoothatsolepractitionersareoftenthosewhoservicethemostvulnerableinsocietybothfinanciallyandgeographically,theproposalislikelytoadverselyimpactuponaccesstojusticeforthoseonthehighstreetandinsmallertownsandvillages,makingyetfurtheradverseinroadsintoacountryabouttocelebratethe800thanniversaryoftheMagnaCarta.ThatriskisfurtherheightenedbythelikelihoodthattheCitizensAdviceBureauwillalsoberequiredtoapplyforFCAauthorisation.SPGwouldquestiontowhatextenttheGovernmentarebeingmadeawareofthesewideraccesstojusticeconcernsthatarisefromtheFCA’sunreasonableanddisproportionaterequirements.



3. Furthermoresolicitorsareoftenwillingtoacceptpaymentoftheircostsbyinstalmentsinordertoassistclients.As“financialaccommodation“mustcontainthe3restrictiveelements(nomorethan4instalments,paymenttermofnomorethan12monthsandnointerestorcharges)thencurrentflexibilityinthisrespectwouldnolongerbeavailabletoclientsandwouldthereforerestrictaccesstojusticegiventhereductioninpublicfundingatthepresenttime.Monthlyinstalmentscouldnotbeofferedandfirmswouldhavetoissueproceedingswhichagainisnotinthepublicinterest.

4. FirmsthatspecialiseinConsumerCreditActivitywouldhavetoobtainFCAauthorisationtocontinueinbusiness.Thismayresultinfinancialdifficultyandhavingtoclosedown.Iftheapplicationisunsuccessfulfirmsmayhavetocompletelychangetheirmodusoperandiorclosedown

Question 4: To what extent are firms providing consumer credit services to clients which would mean that they would need to seek authorisation from the FCA? Are consumer credit arrangements more likely to be offered for particular types of work?

Mostfirms,includingsolepractitionersallowclientstopaybyinstalmentswhichdonotfallwithinthefinancialaccommodationexemption.Debtadjustment/counselling/collectingisundertakenbyfirmsofallsizesinEnglandandWales.Creditinformationisofferedbysomeformstodebtorsetc.inrelationtodebtcounselling/adjustingarisingfromlitigation/matrimonialworketc.

Consumercreditworkmaybeasmallelementofafirm’sworkcomplementingotherservicesprovidedincontrasttothosefirmswhoconcentrateonthisworktotheexclusionofmostothertypes.

Question 5: To what extent are firms providing other FSMA regulated activities which would mean that they would need to seek authorisation from the FCA?

Underthecurrentarrangementsinadditiontodebtmattersfirmsundertakegeneralinsurancemediation,transferofsharesandotherinvestmentsinthecourseofpropertytransactions,matrimonial,probate/trustandcorporateworketc.

Iftheproposalsgothroughthentherewouldbeanimpactovernearlyallareasofworkespeciallyoverinsurancemediationandfinancialservices.Examplesinrelationtosolepractitionersincludevariouspropertyinsurancesinconveyancing,missingbeneficiaryinprobate,ATEinsuranceinPIclaimsetc.

OnlyaveryfewfirmsneedFCAauthorisationatpresentduetothePart20exemptionandtransitionalprovisions.

Question 6: If the proposal is implemented, will firms continue to provide consumer credit services, regulated by the FCA?

SSPGconsidersthatfewsolepractitionerswillwishtoincurtheadditionalexpenseandregulatoryburdenofapplyingforFCAauthorisationandwillthereforestopofferingtheseservicestoclients.

Inadditiontheywillbepreventedfromagreeingwithclientsforclients’billstobepaidbyinstalmentsforlongerperiodsthantheproposedexemptionallowswhichinturnwillcausedifficultytoclientsandrestrictaccesstojustice.

SSPGalsoquestionswhetherSRAcanallowanyotherbodytoregulateitexceptinthemostclearcases.Thesechangesshouldnotproceed.

Hilary Underwood December 2014OnbehalfoftheSolePractitionersGroup



RESPONSE OF THE SOLE PRACTITIONERS GROUP (SPG) TO THE SRA CONSULTATION ‘TRAINING FOR TOMORROW: A COMPETENCE

STATEMENT FOR SOLICITORSPart 1: Developing the competence statement

Question 1: Does the competence statement reflect what you would expect a competent solicitor to be able to do?

Yes,thecompetencestatementdoesreflectwhatwewouldexpectacompetentsolicitortobeabletodo.Itisencouragingthatthecompetencestatementdealswithacomprehensiverangeofskillsandabilitiessinceitisimportantthatacompetencestatementshouldnotbeameansofwateringdownstandardsofcompetencewithintheprofession.Theintegrityandqualityoftheprofessionalqualificationassolicitormustbemaintained,evenifthetraditionalpathwaytoqualification,educationandtrainingischangingandbecomingbroader.ItisalsoimportantthatthosestandardsremainhigherforsolicitorsthanotherbranchesoftheprofessionsuchasLegalExecutivesandParalegals,sothatthesolicitorqualificationremainsaneasilyrecognisable,trustworthydistinctandrecognisedtitleofqualityandexpertiseforconsumers.Wearepleasedtoreadthatflexibilityofpathwaysmustnotbeallowedtoleadtoflexibilityofstandards.

WhilstweappreciatethattheSRAhasconsultedwithconsumerswithrespecttothedraftcompetencestatement,itisimportantthatthecompetencestatementisnotreportedtothepublicasadocumentwhichthepublichaveessentiallydevisedandwhichsetsout‘whattheycanexpectfromtheirsolicitor’,ashasbeenreportedonsomewebsites(eg.www.legalchoices.org.uk/category/news).Otherwise,ithasthepotentialtobeabusedbythe‘complainingconsumer’,whomaynothavethecapacitytounderstandthecompetencestatementotherthanatthemostbasicoflevels.Thisshouldbeacompetencestatementconcernedwithstandardsofcompetenceatthepointofadmissionasasolicitorandbeyond,todealprimarilywiththeneedtoensureconsistentend-pointstandardsfortheemergingflexiblepathwaystoqualification–notasaconsumertoolforraisingcomplaintsbyconsumerswhoperceivethattheirsolicitorhasnotmetthestandards.

Question 2: Are there any additional competencies which should be included?

Wecannotidentifyanyadditionalcompetencieswhichshouldbeincludedatthepresenttime.

Question 3: Have we struck the right balance in the Statement of Legal Knowledge between the broad qualification consumers tell us they understand by the title solicitor and the degree of focus which comes in time with practice in a particular area?

TheStatementofLegalKnowledgedoesstrikethecorrectbalance,inourview,betweenthebroadqualificationconsumerstellustheyunderstandbythetitlesolicitorandthedegreeoffocuswhichcomesintimewithpracticeinaparticulararea.Itisextremelyimportantthatallsolicitorshavethisbasicunderpinningoflegalknowledgeatthepointofqualification,inordertoensurethattheycangoontomeetthecompetencystandards,particularlythosesetoutatA3andA4ofthedraftcompetencestatement.

Part Two: using the Competence Statement to assure competence at admission

Question 4: Do you think that the Threshold Standard articulates the standard at which you would expect a newly qualified solicitor to work?

Onthewhole,yes.Wewould,however,suggestthat‘StandardofWork’alsoincludereferencetoappropriatesupervisionwithreferencetocomplextasks.GiventhatitisintendedthattheThresholdStandardistobereadalongsidethecompetencestatement,itshouldbeexplicitthatnewly-qualifiedsolicitorswillstillrequiresupervision(givenatanappropriatelevel,commensuratewiththeindividualsolicitorsownskillsandabilitiesandthecomplexityoftheparticulartaskinhand).Thiswillbenefitbothnewly-qualifiedsolicitorsandtheiremployingfirms,toensurethatnewly-qualifiedsolicitorsarenotexpectedtoworkwithoutsupervision,simplybecausetheyhavenowqualified.Thisshouldalsobereflectedin‘Autonomy’and‘Complexity’.



Question 5: Do you think that the Statement of Legal Knowledge reflects in broad terms the legal knowledge that all solicitors should be required to demonstrate they have prior to qualification?

Yes,weagreethattheStatementofLegalKnowledgereflectsthis.Itappearstoreflectthosecoreelementsoflegalknowledgethatare‘timeless’,whichindividualsmaythenchoosetospecialiseinastheircareerprogresses.Theyalsocovertheareasinwhichsolicitorsmayneedtoidentifyadditionalissuesforaclient,oftenadifferentissuetothematteraboutwhichtheclienthasmadetheappointment.Itisnotclear,however,howindividualswillberequiredtodemonstratetheirlegalknowledgeaspertheStatement,andhowthiswillbeassessed.

Part Three: using the Competence Statement to define continuing competence

Question 6: Do you think that the Competence Statement will be a useful tool to help entities and individuals comply with Principle 5 in the Handbook and ensure their continuing competence?

Yes,wedothinkthattheCompetenceStatementcouldbeapotentiallyusefultooltoassistentitiesandindividualsolicitorsincomplyingwithPrinciple5and,inparticular,tohelptheminunderstandingandimplementingthenewrulesforcontinuingcompetenceinawaythatismoremeaningfulandbeneficialtothem.TheclarityoftheCompetenceStatementanditswide-coverageareverywelcomeandshouldbothassistandpromptsolicitorstothinkabouteducationandtraininggapsthattheymaynothaveotherwiseidentified,simplybecausethoseissuesdidnotspringtomind.

Asweindicatedinourearlierresponsetotheconsultationonthenewrulesforcontinuingcompetence,oneofourconcernswasthelackofclaritysurroundingthenon-mandatoryguidanceandtheoutcomes-focusedapproach,andthepotentialforuncertaintythatthiscreated.ThisconcernisconsiderablytemperedbytheCompetenceStatementwhichshouldassisteventhemost‘non-reflective’ofsolicitors,toconsiderexactlywhatareasofeducationandtrainingheorsherequiresinordertomaintaincompetence(andimproveuponittoexcellency)withtheCompetenceStatement.

Further,theCompetenceStatementalsoalleviatessomeofourconcernsurroundingthepotentialfortrainingbudgetstobecutandtheresultingpotentialdifficultyfortraineesolicitors/newly-qualifiedandjuniorsolicitorswithinafirmtopersuadeapartnerthattheyshouldhavepermissiontoattendtrainingcourses(thoughitisyettobeseenhowtheSRAproposestomonitorcompliancewithoutcomes–andthecosttotheprofessionofthispotentiallevelofengagement).Therewillbeanobligationnotonlytoensurethattraineesolicitorsarereadyforqualification,butalsoanobligationtomeasureongoingcompetencyagainsttheCompetenceStatement(thoughifthisisaninternalprocessonly,thisisnotwithoutitsrisks,giventheremovalofthemandatory16hours).Itisstillnotclearhowentitiesandindividualswillbeheldtoaccountforensuringtheongoingcompetencyofsolicitorsandtheservicestheyprovide.

WearestillconcernedastowhethertheSRAisequippedintermsoftimeandresourcestodealwithanewrisk-basedapproachtocompetencyandwhetherithasthenecessarysupervisoryandenforcementcapacitytodealwiththewide-rangingapproachesthatvaryingentitiesandorganisationsmaychoosetotaketoeducationandtraining.

Question 7: Are you aware of any impacts, either positive or negative, which might flow from using the competence statement as a tool to assist entities and individuals with complying with Principle 5 in the Handbook and ensuring their continuing competence?

Thereisthepotentialforthecompetencestatementtobeinterpretednarrowly,withentitiesandindividualsoverlookingotherareasofeducationandtrainingthatcouldbebeneficialsimplybecausethesearenotexplicitlyreferredtowithinthecompetencestatement.Thatis,ofcourse,alwaysthedangerandapartofthedelicatebalancetobestruckassoonasonestartstoputpentopapertodefineanythingaswide-reachingandvariedasthecompetencystandardsofsolicitors!Theymustbedraftedcomprehensivelyenoughtobemeaningfulandapplicableinensuringaconsistencyofapproachtotheawardofthetitleofsolicitor,whilstatthesametime,itisalsoimpossibletoincludereferencetoeverysingleskillorpieceofknowledgethatitmightbeusefulforasolicitortohaveinhisorherowncapacityandrole–suchnuancesmustinevitablybeleftfortheentitiesandindividualsolicitorswithinthemtoidentifythemselves.

Hilary Underwood January 2015OnbehalfoftheSolePractitionersGroup



RESPONSE OF THE SOLE PRACTITIONERS GROUP (SPG) TO THE SRA CONSULTATION REGULATION OF INSOLVENCY PRACTICE

Question 1: Do you agree with the proposal that the SRA should take appropriate steps to stop authorising solicitors to act as insolvency practitioners?

Wedonotagreeonprinciplewiththisproposal,uponthebasisthatthisproposalisanotherstepfurtherinthediversificationofregulation,whichtheLegalServicesAct2007wassurelyintendedtoprevent?

Thisproposalwillmeanthatsolicitorinsolvencypractitioners(IPs)willneedtobedual-regulatedbyboththeSRAandbyanalternativeRecognisedProfessionalBody(RPB)undertheInsolvencyAct1986.Fromtheperspectiveoftheindividualsolicitor,thisdual-regulationwillbepotentiallyburdensome,timeconsumingandcostly,bothintermsofactualregulatoryfeesbutalsotimespentindealingwithtworegulators.Itisanunenviablepositionforanyprofessionaltofindthemselvesinadual-regulatedpositionandthatiswhywesuspectthatsolicitorsIP’shavemaintainedalloftheirregulatoryrequirements‘underoneroof’eventhoughtheycouldhaveappliedtoanyofthesevenRPB’sortheSecretaryofStateforauthorisationsince2007.

Further,itisclearthattheregulatoryfeesthatwouldbepayabletoanalternativeRPBarelikelytobesignificantlyhigherthanthecurrentfeechargedbytheSRAof£520perannum–possiblyasmuchas£3,000ormore.Havingsaidthat,ofcourse,itwouldseemthateveniftheSRAcontinuedtoauthorisesolicitorstoactasIP’s,theregulatoryfeeschargedbytheSRAwouldincreaseasaresultoftheneedfortheSRAtoinvesttime,moneyandresourcesintoupskillinginordertofulfilitstighteningobligations.Whethertheywouldincreasetosuchasignificantextent,however,isnotclear(andwesuspectnotevenyetcleartotheSRAitself).

However,fromapracticalperspective,wecanseethatthestatisticsareincrediblylow,therebeingonly124solicitorIP’scurrentlyauthorisedbytheSRAtoundertakeregulatedIPactivity(wedonotknowwhetheranyofthese124solicitorIP’saresolepractitionersbutwouldsuspectthatasmallnumberare).WealsorecognisethatitwouldseemthattheSRAhave,forsometime,inanyeventbeencontractingouttheirregulatoryrequirementstootherRPB’s.Itisnotclearwhetherthecostofsuchcontracting-outhasbeenfullymetbythelevieschargedtothesolicitorIPsorwhethertheprofessioningeneralhasbeensubsidisingthisprocess.Ifthecostofcontracting-outcan,however,bemetinfullbylevieschargedsolelytothesolicitorIPs,isthisnotanalternativewayforwardthatcouldcontinue,enablingtheSRAtomeetitsregulatoryrequirementswithouttheburdensomeimplicationsofdual-regulation?

WewouldcertainlybeloathtoseetheSRAspendingsignificantsumsoftheprofessionsmoneyonbuildingupitscapabilityandexpertisethroughtherecruitmentandtrainingofstaff,particularlyinlightofthepotentialincreasedobligationstoinvestigatecomplaintsthatwillbeimposedbytheSmallBusiness,EnterpriseandEmploymentBill2014-2015shouldthisreceiveRoyalAssent,simplyinordertoregulatejust124solicitorIP’s.

IftheSRAcanproperlyregulatesolicitorIP’s(eitherwithorwithoutcontracting-outsomeorallofitsregulatoryobligations)atacostthatcanreasonablybemetinfullbysolicitorIP’s,thenitshoulddoallitcantocontinuetodoso,evenifthecosttoeachindividualsolicitorIPincreasessignificantly.GiventhatsolicitorIP’scanexpecttopayhigherregulatoryfeesinanyevent,wearesurethatmostwouldratherretainauthorisationthroughtheirownprofessionalbody,evenatanincreasedfee,ratherthanfacethetaskofdual-regulation.

If,however,theSRAcanonlyproperlyregulatesolicitorIP’sbyincurringacosttotheprofessionasawhole,giventheeconomiesofscale,thenitwouldsadlyseemthatthosefewsolicitorIP’swillneedtolookatotherRPB’sfortheirauthorisationandregulation.

BetterandclearerinformationonthepotentialtransitionalarrangementsshouldsolicitorIP’sneedtotransferregulatorswouldbeextremelywelcome,particularlysurroundingtheproposedcostsofthisandwenotethattheSRAisindiscussionswithotherRPB’sconcerningthis.AutomaticlicensingofsolicitorIP’swhoarecurrentlyauthorisedbytheSRAandasmooth,seamlessandfee-lesstransitiontoanotherregulatorforremainderofthelegalyearwouldbesensible,giventhatsolicitorIP’swillhaverecentlypaidtheirfeesinOctober2014.CantheSRAprovideclarityonthisissue,please?

Thereis,ofcourse,ariskthatsomesolicitorIP’swillnotwishtobere-authorisedbyanalternativeregulator,particularlyifthefeeincreaseissignificant,particularlygiventhatsomesolicitorIP’smaybeapproachingthelatterendoftheircareer,fromthestatisticsgiven.



ItshouldnotbeforgottenthattherewillalsosomecosttotheSRAofworkingtogetherandsharinginformationwithotherregulators,evenifthisproposalgoesahead,toensurethatthereisnoduplicationofregulatoryrolesandtoensureclarityofdisciplinaryjurisdictionetc.giventhattheSRAwillretaintheregulatoryfunctionspertainingtothePrinciples.SolicitorIP’smustbeassuredthattheywillnotfaceduplicationofdisciplinaryfunctions.

FurtherclarificationisalsorequiredwithrespecttoPIIarrangementsandwhethertheviewoftheinsuranceindustryhasbeensoughtupontheimplicationsofdual-regulationforsolicitorIP’sandwhetherthiswillhaveanimpactuponpremiums.

Similarly,furtherclarityisclearlyalsoneededinrelationtotheCompensationFundandwhetheritisrightthattheCompensationFundstillprovideasafetynet,if,infactsolicitorSP’sarenolongerregulatedforinsolvencypracticebytheprofession?

Question 2: If you do not agree with the proposal, please explain why?

PleaseseeouranswertoQuestion1.

Question 3: Do you have any views about our assessment of the impact of these changes and are there any impacts we have not considered?

Weagreewithyourassessmentoftheimpactofthesechangesupontheinsolvencymarketandupontheconsumer.TheimpactonindividualsolicitorIP’s,albeitfew,whomayfindthesechangestipthefinebalanceofviable/non-viablepracticeagainstthem,will,ofcoursebegreatandsadforthatindividualbutadmittedlyunlikelytoimpactthemarket.

Hilary Underwood January 2015OnbehalfoftheSolePractitionersGroup



RESPONSE OF THE SOLICITOR SOLE PRACTITIONERS GROUP TO THE SRA SMALL FIRMS DISCUSSION PAPER

Question 1: Do you have any comments on our definition of a small firm?

Weappreciatethatanydefinitionissomewhatarbitraryandthatboundariesandparametershavetobedrawnsomewhere.

Wewouldconsideryourdefinitiontoberathergenerous,however,intermsofthenumberofpartners,membersordirectors.Wewouldgenerallyconsiderasmallfirmtobeasolepractitioner,orafirmwithnomorethanthreepartners,membersordirectorsratherthanfour.

Wearealsoconsciousthatyourdefinitionrequiresfulfilmentofallthreeelements,whereasweareawarethattherearesome,albeitfew,solepractitionerswhodohaveanannualturnoverthatexceeds£200,000,dependentuponthetypeofworktheyundertake,yettheirfirmwouldstillbenefitfromtheSRA’sapproachtotheproportionateregulationofsmallfirms.

Wewouldagreewiththeparametersbeingsetat10PCholders,forthepurposesoftheSRA’sengagementwithsmallfirms.Althoughasolepractitioneremployingmorethan10PCholderswouldtechnicallystillbeamemberofSPG,thestructureofsuchafirmislikelytohavefarmoresimilarityandalignmentwiththerunningofamedium-sizedfirmthanitwouldwithasolepractitionerfirmandislesslikelytoengagewiththetypeofsupportandguidancethatSPGoffers.WewouldenvisagethesametobetrueofthewayinwhichtheSRAisseekingtoofferbettersupportandguidancetosmallfirmsie.thatthereisagreateralignmentwithmedium-sizedfirmsthansmallfirmsinthosecircumstances.

Question 2: Is the new small firms section of the website helpful? How can it be further improved?

Thenewsmallfirmssectionofthewebsiteisenormouslyhelpful.Anyguidanceforsolepractitionersincomplyingwithregulatoryrequirementsisverymuchwelcomed.Itiscorrectthattherehaslongbeenaperception(andindeedsadlytheexperienceofmanysolepractitioners)that,atbest,theSRAisindifferenttothemand,atworst,thattheSRAwouldprefertodoawaywithsmallfirmsaltogether.Itisincrediblyrefreshingandreassuringforourmemberstonowseethatthisisnotthecase.

WeareverypleasedthatthereisalinktotheSPGwebsiteandreceiveasignificantnumberoftelephonecallsfrompotentialnewsolepractitioners.SPGverymuchvaluesitsexcellentworkingrelationshipwiththeSRAandispleasedthattogether,solepractitionersarereceivingconsistentandvaluableguidanceincomplyingwithregulatoryrequirements,whichcanonlybetothegoodoftheprofessionandthepublic.Wewouldwelcometheopportunitytoconsideravenuesforofferingjointguidanceonthekeyissuesaffectingsolepractitioners.

Oneofourconcernswasthedangerof‘lumpingtogether’solepractitionerswithsmallfirms,wheninfactthereareneedsuniquetosolepractitionersthatmustbeaddressed.WeraisedthisconcernpreviouslywiththeSRAandarepleasedtoseethatthereisaverygoodbalancebetweenguidanceforsmallfirmsandguidancespecificallyforsolepractitioners.

Theguidancesurroundingauthorisationapplicationsandthenewfirmstarterpackareparticularlyhelpful,astherehaslongbeenambiguityforpotentialnewsolepractitionerswhohavefelttheyhavebeenapplyingforauthorisation‘inthedark’.

Theguidanceonsuccessionplanningandclosingdownofthepracticeisalsoverywelcome.

OneimprovementwouldbespecificguidanceupontheissueofPowersofAttorney.Wereceiveregularrequestsforassistanceinthisareaandguidance,asfaraspossible,withrespecttostandardclauseswouldalsobeuseful.

Specificguidanceonacquisitionofapracticecouldalsobeofbenefit,sincesomenewsolepractitionersmaybecomesolepractitionersbytakingoveranexistingpractice.Guidanceuponthestepstotake,riskstoidentifyetc.wouldbepracticalanduseful.

Likewise,guidanceuponmergerorsaleofafirm,aspartoftheoverallguidanceinconnectionwithsuccessionplanning–again,thestepstotake,riskstoconsideretc.

Inaddition,thiscouldincludemergerwith/orformationofanABSwithinthecontextofanexitstrategy.



Question 3: What topics would you particularly like covered by webinars?

Potentiallyusefulwebinartopicscouldinclude:

– DataProtectionandSecurity

– Bogusfirms–protectingyouridentityandbrand

– Protectingclientmoney

– Successionplanning

– Closingdownapractice

– Acquisitionofapractice

– PowersofAttorney

– Mergingandsellingapractice(includingmergerorformationofanABSwithinthecontextofanexitstrategy)

– FulfillingtheroleofCOLPandCOFA

Question 4: Do you anticipate using or have you used the new small firms service on the helpline?

Wehavenot,asyet,spokentoanyofourmemberswhohaveusedthenewsmallfirmsserviceonthehelplinebutwouldenvisagethiswillbeusedsignificantlybysolepractitioners.MomentumwillincreaseasindividualsexperiencetheknowledgeandinputofSRAstaffwhodohaveknowledgeoftheuniqueneedsofsolepractitionersandhowtheregulationsapplytothem–inthisway,wordwillspreadandtherewillhopefullybeanincreaseofconfidenceinthisservice.

ItwillbeofkeyimportancetoensurethatthosemembersofSRAstaffwhoareservicingthehelplineofferconsistentadvicetomembers.Wehaveheardpreviousinstancesofdifferentmessagesbeingconveyedbydifferentmembersofstaff.

OnecomplaintwehavereceivedonnumerousoccasionsfrommembershasbeenthelackofunderstandingbySRAstaffofthenuancesofrunningasolepractice.

Therefore,consistencyandexpertisewillbevitaltothesuccessofthehelpline.

Question 5 : Are there any other ways that supervision can better engage with small firms?

Again,wewouldsaythatconsistencyandexpertisearevitalonthepartofthoseengagedinsupervisionofsmallfirms.Difficultieshaveoccurredinthepastwheninconsistentadviceandguidancehasbeenissuedtodifferentsolepractitionersonthesameissues.Thesolepractitionercommunityissuchthatinformationisoftenrapidlysharedandinconsistencyinguidanceasgeneratedconfusion,atbestandpanic,atworst,dependentupontheissueconcerned.

Aquickerandmoreefficientresolutionofsupervisoryissueswouldalsobewelcomed.Muchworryandstresshasbeencausedinthepastbylong-outstandingregulatoryissuesawaitingresolutionandfurtherguidance,whichhasleftsolepractitionersin‘limbo’,unabletofocusproperlyupontheirfee-earningworkwhilstregulatorymattersarehangingoverthem.

Question 6: Do you agree that deemed approval of COLP/COFAS would assist small firms?

Wedoagreethatthiswouldundoubtedlyassistsolepractitionersandnodoubtmostsmallfirms.Wenotethataformalconsultationonthisproposalislikelytotakeplaceandshallrespondfurtheratthatstage.Wewouldsay,however,thatdeemedapprovalshouldbesubjecttoparametersintermsofthenumberoffeeearnersandthesizeofturnover,particularlyinlightoftheratherextendeddefinitionofasmallfirmthattheSRAisusing,asperQuestion1above.TheroleofCOLP/COFAlooksverydifferentinasolepractitionerfirm(initsstrictestsense–1solicitor/feeearner)toafirmwith10PCholdersandtheriskswithrespecttothelatterareobviouslygreater.Likewise,withrespecttoturnover(eveninasolepractitionerfirm),thelargertheturnover,thegreaterthepotentialrisk.

Deemedapprovalwould,wepresume,assistinspeedinguptheauthorisationprocess.Thiswouldbeverymuchwelcomed,particularlygiventhatmanysolepractitionerapplicantsawaitingauthorisationmaybeinapositionwherebytheyareunabletoearnanincomewhilstawaitingtheoutcomeoftheirapplication–if,forexample,theyhavebeenmaderedundantbyaformeremployer,orhavelefttheirpreviousemploymentinordertodevotethemselvestotheapplication/newfirmset-upprocess.



Question 7: Are there any other ways in which we can improve our authorisation process for small firms?

Pleaseseeourresponsetoquestion6abovewithrespecttothespeedwithwhichapplicationsaredealtwith.

Weappreciate,however,thatthereisabalancetobestruckbetweentheneedfortheSRAtoproperlydealwithapplicationsandensurethatfirmsarebeingauthorisedonlywhentheyareabletosatisfytheregulatoryrequirements,andthewaitingtimefortheapplicant.ThisbalancecouldbebettermanagedbyagoodlevelofregularcommunicationbetweentheSRAandtheapplicant,preferablybyonespecificallyallocatedmemberofstaff,andalsotoensurethatapplicantsdealwithonepointofcontactthroughouttheprocess.

ThiswillassistininstillingconfidenceintheSRA’ssystemsandprocessesandengenderabetterunderstandingabouttimedelays,ifany,andthereasonsforthem.Solicitorsare,inthatsense,nodifferenttotheclientstheyserve.Theyallunderstandthattheirmatterwilltaketimebutsimplywishtobekeptregularlyinformedofprogressandthereasonsforanydelay.

Question 8: What other suggestions do you have for ways in which we can improve our communications with small firms and assist them to comply with regulation?

Thesmallfirmssectiononthewebsite,emailnewslettersspecificallyforsmallfirms,smallfirmshelplineandvirtualreferencegroupareexcellentfoundationsforbuildingupongoodcommunicationwithsmallfirms.

Itwillbeimportanttoensurethatthewebsiteandemailscontinuetoreflectthediversitythatexistsevenasbetweensmallfirmsandasbetweensmallfirmsandsolepractitioners,sinceevenwithinthe‘smallfirms/solepractitioner’armoftheprofession,therearemultiplebusinessmodelsandstructures.Ifthatdistinctionislost,solepractitionerswillbelesslikelytoturntothesetoolsforsupport.

WewouldwelcometheopportunitytoexplorewaysinwhichwecanjoinwiththeSRAinprovidingjointguidancetoourmembers,perhapsthroughsomejointlyhostedregionalseminars/localgroupswork(theSRAwillbeawarethatSPGhasavastnetworkoflocalgroupswhichisgrowingallthetime).

Weshallcertainlybeencouragingourmembershiptoparticipateinthevirtualreferencegroup,toensurethatthinkingabouthowregulationaffectssolepractitionersisembeddedintoallofyouroperationsandyourregulatoryreformprogramme.

Hilary Underwood February 2015OnbehalfoftheSolePractitionersGroup



RESPONSE OF THE SOLICITOR SOLE PRACTITIONERS GROUP TO THE SRA CONSULTATION ON THE SEPARATE BUSINESS RULE

Question 1: Do you have any comments on our conclusions from the market analysis, and any additional information or data to supply to assist that analysis?

Wehavenoadditionaltodatatosupply.Weare,however,concernedatthehighnumberofwaiverstotheSBRthathavebeengrantedtoABSsasopposedtorecognisedbodiesandrecognisedsolepractitioners(betweenMarch2013and1October2014,theSRAgranted60waiversoftheSBRtoABSapplicants).Thismaybebecauseapplicationshavenotbeenmadebythelatter,butmayalsobeindicativeofthefactthatsmallerfirmsandsolepractitioners(SPs)arelesslikelytobenefitfromanychangestotheSBRthanthelargerfirmsandABSs.

NoristhereanypublishedpolicyabouthowtheSRAdetermineswhetherawaiverisappropriateandhowanyconditionsimposedaredetermined/therationalebehindthem.

Question 2: Do you agree that we should replace the ban on links with separate businesses that provide non-reserved legal services with a rule containing outcomes that protect clients?

WewouldreferalsotoourresponsetotheSRAConsultationonMDPs(dated14thJune2014)which,toalargedegree,capturesourviewstooontheseproposals.

ThesechangestotheSBRarebeingconsideredinlightoftheLSB’sviewoftheruleasunnecessarilyrestrictivefromamarketperspectiveandlimitinginnovation.Ontheonehand,wecanseetheSBRisarbitraryandhasallowedsomelegalserviceproviderstooperatewithinprohibitedseparatebusinesses,whilstothers,includingSPshavenot.Thereforeinonesensea‘levellingoftheplayingfield’betweentraditionalsolicitors,ABSsandunregulatedserviceproviderssoundsbeneficialandfairerintheory.

However,therealityisthatthosewhostandtogainthemostfromanychangesarethelargerfirms,ABSsandtheunregulatedserviceproviders.WorkingastheydoonalargerscalewithinthelegallandscapethanthesmallfirmsandSPs,theyhavetheresourcesandflexibilitytodiversify,investinseparatebusinessesandworkacrossregulatoryboundaries,todevelopinnovative,butuntested,newmodelsoflegalservicedelivery.

TheincreasedcompetitionthatthischangeisalsointendedtocreatewillalsobeofsomethreattosmallfirmsandSPswhoarenotpositionedfinanciallytotakeadvantageofthesenewopportunities,butwhowillfindthemselveshavingtocompetewiththosewhodo.

Itissaidthatthiswillultimatelybenefitconsumersby(accordingtotheSRABoard)“providinggreatercompetitionintheprovisionoflegalservices,greateropportunitiestoaccessholisticservicesandpotentialreductionsincost”.Itisnoticeablethattheword“quality”doesnotfeatureinthisstatement.

Ifthesechangeslead,conversely,eventoawateringdownofthebrandandreputationofthetraditionalsolicitorqualification,letaloneapossibledeclineinthenumberofsmallregulated,highlyqualifiedandexpertserviceproviders,theconsumermayultimatelysufferfrombothreducedchoice,reducedqualityoflegalservicesandreducedassurancethathavingworkundertakenbyaqualifiedpersonprovides.Farfromcreatingmoresustainableregulatedservices,theveryoppositecouldbetrueforsmallerfirmsandSPsaspricesaredrivendownfurtherbyincreasedcompetitionfromthede-regulatedsector.

Whethertheplayingfieldis,indeed,levelledisopentoquestion.Thereareotherregulatoryaspectsofconsiderationfortraditionallawfirms,notleastofwhichistheissueofPII.ForSPs,thePIIpremiumcanbethedecidingfactorinthefinancialviabilityofafirm.WithAccountantsabletoofferlegalservicesregulatedbytheICAEWandtheirminimumlevelofPIIcoverat£500,000,wearestillfarfromalevelplayingfield.WehavemadeourviewswithrespecttotheminimumlevelofPIIcoververyclearinourconsultationresponsesonthoseissuesandwedonotseekorsupportareductioninminimumlevelsforsolicitors,toachieveamorelevelplayingfield.Therisksofreducingminimumlevelsofcoverareprohibitivetothis.Nevertheless,itisunrealistictopresenttheseproposedchangesasalevellingoftheplayingfield,whenthereareothersignificantdynamicswithinthetraditionallawfirmthathinderthis.

Withthatinmind,theremayundoubtedlybesomeSPs,whoareentrepreneurialandinnovativebynaturewhomaywishtoinvestinseparatebusinesseswithinthescopeoftheproposednewrules.Itwouldbewrongofustosaythattherewon’t.However,weexpectthemtoberelativelyfew.



Theremustbeappropriatechecksandbalancesinplacetoprotectconsumersoflegalservicesfromtherisksthatsuchachangewillalsocreate–ariskthat,onthebasisofsizealoneandthenumbersofconsumersbeingserviced,islargelyposedbythelargerprovidersandABSs.

Thereisarealriskofconsumerconfusionandperceptionaboutwhatisandisn’tsubjecttolegalserviceregulation.Itiscrucialforconsumerstoknowthedistinctionbetweenwhethertheworkisbeingundertakenbyafeeearnerinanon-authorisedpartofthebusinessandnotbemisledintothinkingthattheyhavetheprotectionofanauthorisedpractisinglawyer(andtheconsequentregulatoryprotectionofindemnityinsurance,thecompensationfund,theOmbudsman,legalprofessionalprivilege,qualification,trainingandstaffskillsthatthisbrings)whentheydon’t.Thisisarealriskwhereprofessionalservicesaresplitintoseparateentities,wherebusinessesmayseektobeauthorisedbytheSRAinordertogainthecachetofaprofessionaltitlewhereasinreality,littleornoneofitsactivitieswillberegulated.Clientsmustbeclearlyawareofwhatservicestheyarebuyingandwhoregulatesthem.Thereisnodoubt,inourmind,thatunreservedlegalworkundertakenoutsideoftheregulatoryframeworkislikelytoultimatelydamageconsumers.Forexample,firmsthatcurrentlyundertakewillwritingunderregulationwillbeabletotransfersuchworkintotheunregulatedenvironmentandbeyondthereachofindemnityinsuranceandOmbudsmanprotection.Somemayevenhavenoassetswhatsoeverwithinthejurisdiction.

Theremustbesignificantclarityastoredressandotherremediesavailabletoconsumers.

However,suchaflexibleapproachtoseparatebusinessprovisionsthatisfocusedontheconsumerratherthanonbusinessstructureoronalistofactivities,whilstsoundingpositiveintheoryismessyinpracticeandonlynecessarytodealwiththeunfoldingregulatorylandscaperesultingfromtheLegalServicesAct2007reforms–reformsthatweopposedandwhichhaveledtoasignificantgrowthinthecommercialprovisionofnon-reservedlegalactivitiesbyunregulatedproviders.

NordowewishtoseethecostofregulationandenforcementincreasedfortheprofessionasawholethroughachangethatprimarilybenefitsonlythelargerandABSfirms.EvenwiththeSBRinplace,therehavebeenanumberofseriouscasesbeforetheSDTinvolvingbreaches.Manyofthesehaveinvolvedvulnerableclientssuchasthefrail,elderlyandmentallyimpairedbeingledtomakeimportantdecisionssuchasentrustingorinvestingmoney.Howmuchmoreisthereariskwhentheruleisliberalised?

ItisthereforeimportantthatanyrevisedSBRenablestheSRAtoproperlytakeappropriateprotective,interventionistanddeterrentactionintotheunregulatedentity,byensuringitisclearthatthesolicitorsinvolvementintheotherbusinessisstilloflegitimateconcernfortheregulator.

WhilstthevoluntaryextensionofthejurisdictionoftheLegalOmbudsmanbeyondauthorisedpersonsiscurrentlyunderconsiderationandconsultation,itwouldseemthatthisshouldbeextendedtoalllegalservices.However,thiswouldrequireprimarylegislationandproperresourcing,allofwhichcouldtakeyears–itwouldseemthatneithertheSRAnortheLSBarekeentoholdbackanychangestotheSBRtoawaitsuchadevelopment.

Thisfurtherdemonstratesthehaphazardand‘patchworkquilt’approachtothede-regulationoflegalservicestakenbythisGovernmentwhichratherironicallyfliesinthefaceofthe‘holistic’approachtolegalserviceswhichitclaimstopromote.

TherearealsocostsconsequencestoanyextensiontotheroleoftheLegalOmbudsmanandthebegsthequestion,whowillfootthebill?Ultimately,itwill,ofcourse,betheconsumer.

Inthemeantime,whatwilltheLegalOmbudsman’sviewofwhatconstitutesalegalservice?Thismaydiffersignificantlytotheviewsofregulators,licensingauthoritiesandtheLegalServicesBoard.

Whilstweappreciatethattheproposednewrulewouldforbidreferralsincertaincircumstances,thecostofpolicingthisruletoensurethatauthorisedpersonsarenotsplittingmattersinvolvingreservedlegalactivitieswithanunregulatedbusinesstothedetrimentofclients,couldbesignificant–andagain,largelyonlyofbenefittothelargerfirms.

Ultimately,theseproposalsarisefromtheregulatorymessthathasbeencreatedbytheimplementationoftheLegalServicesAct.Ithascreatedacomplexoverallregulatoryposition,intermsofthenumberofdifferentregulatorsandthelackofaproperreviewofwhetherthelistofreservedlegalactivitiesistheappropriateone.Thedifficultissueofregulationbytitleandactivityisbeingignoredie.whatactivitiesshouldberegulatedbytheSRAandwhichshouldnotwhenthatissurelykeytoensuringthatconsumersareproperlyprotectediftheSBRischanged.

However,weacceptwithmuchdisappointmentandconcernthatsignificantchangetotheoverallregulatoryarchitectureortothelistofreservedlegalactivitiesnowseemsunlikelyeitherintheshortormediumterm.



Theregulatoryfalloutfromthisisofnosurprisetous–weweresoundingthesewarningbellsloudandclearpriortothelegislationreceivingRoyalAssent.

Toalargedegree,theseproposedchangestotheSBR,whichcanbesaidtohaveheldtraditionalsolicitorsback,aftertheracehasbeenrunningforsometimeonlyservestodemonstratethattheSRAwaswrongtohaveignoredtheconcernsexpressedbyhighstreetpractitionersinthefirstplace.

Question 3: Do you agree that solicitors should not be allowed to describe themselves as non-practising solicitors when providing services to clients or potential clients in a separate business?

Yes,weagree.

Question 4: Do you agree with our proposals to prohibit some specific referrals that split matters involving or related to reserved activity?

Yes,weagree.

Question 5: Should further specific bans on referrals be included or would a general outcome such as that described in paragraph 113 be more appropriate?

Thespecificreferralsproposeddealwiththemostobviousriskstoconsumers.

Wewouldhavethoughtthataspecificbaninrespectofreferralsforallpre-litigationservices,notmerelythoseinrespectoffamilydisputes,sincethesameconcernsastoaconsumerschoicetoinstructabusinessthatisregulated(andthenfindingthatpartoftheserviceisdeliveredbyanunregulatedbusinesswillapply.

Thereshouldalsobeageneraloutcomethatforbidsanauthorisedpersonfromdividingorallowingtobedividedaclientsmatterbetweenthemandaseparatebusinessinawaythatresultsintheclientnothavingtheregulatoryprotectionsavailabletoanauthorisedperson.

Weareconcernedthatthisraisesyetfurthercomplicatedissuessurroundingreferrals,theneedforguidance,theuncertaintytotheprofessionandfearsof‘gettingitwrong’.ThisthenraisesquestionsastohowthiswillbemanagedbytheSRAandtheconsequentialcosts,allagain,ill-thoughtoutbythepassingoftheLegalServicesAct2007.

Oneoftherisksiscasesmovingbackandforthbetweenregulatedandunregulatedservicesinawaythatprejudicestheclient.Thedutyofanauthorisedpersontoactintheclient’sbestinterestsmaycarrylessweightwithsolicitorswhowillnowhavefurtherprofitwithlessregulatoryriskinmind.Itisdifficulttoseehowalesssophisticatedconsumer(theaveragemanorwomanonthestreet,whomtheLSAisintendedtobenefit)willunderstandwhatmaybecomplicateddivisionsofworkbetweenaseparatebusinessandanauthorisedperson.

Question 6: Do you have any other comments on draft Chapter 12 of the SRA Code of Conduct?

Furthertoourconcernsabove,wealsohaveinmindtheSRA’ssupervisoryroleandrisk-profilingofregulatedfirms.TheliberalisationoftheSBRwillsurelyincreasetheSRA’sworkloadintermsofprofilingriskinfirmswhochoosetotakeadvantageofthesechanges.Whatwillbetheindicatorsofa“causeforconcern”?TheabilitytoimposeconditionsandtotakeenforcementactionwhentheoutcomesarebreachedisallwellandgoodbutinthecontextoftheSRA’smovestoreduceitsregulatoryburdenandworkload,theseproposalswouldappeartobeinconsistent.

Question 7: Do you have any comments on the case studies or any suggestions for further examples for inclusion?

Wehavenoadditionalcommentstomakeotherthanthoseabove.



Question 8: Do you have any comments on our draft Impact Statement or any data or information to add?

TheimpactoftheseproposalsuponSPsisthreefold:

a)theyarelesslikelytofindthemselvesinapositiontotakeadvantageoftheliberalisationoftheSBR;

b)anyincreaseinthecostsoftheregulatoryburdenimposedbythesechangesislikelytobefeltmorekeenlywithinanSPfirm;

c)intheeventofthesechangesleadingtosignificantgrowthinthemarketoftheunregulatedsector,SPfirmsaremostatriskfromlossofworkandpotentialclosure.

Question 9: Do you agree that recognised bodies and RSPs should be allowed to provide the additional services proposed?

Again,inprinciple,wewelcomeanymovetowardsamorelevelplayingfieldbetweentraditionalfirms,ABSsandtheunregulatedsector.

However,again,wefearthattherealitymaywellbequitetheopposite.

WerecognisethattheSRAareproposingthesechangesinresponsetothedamagecausedbytheLegalServicesAct,inordertoenabletraditionalsolicitorsto‘compete’.Therealityisthat,purelyonthebasisofeconomiesofscale,RSPsarelesslikelytobeabletooffertheadditionalservicesproposed.

Further,theincreasedlevelofservicesthatABSsandlargerunregulatedprovidersmaywellbegintoprovideislikelytoleadtothemcapturingalargermarket-shareforbothregulatedandunregulatedworkasconsumersareencouragedtobringalloftheirneeds“underoneroof”.SmallfirmsandSPsarelikelytosufferasaresult.Thatwillnotcontributetoencouragingan‘independent,stronganddiverselegalprofession‘–indeed,quitetheopposite.

WeratherfearthattheimplicationsoftheLegalServicesAct2007arefarwider-reachingthanthoseconcernedmayhaveoriginallythought,andtheregulatoryreformsneededtodealwiththefall-outarebecomingsomethingofarunawaytrain.

Question 10: Are there any other services that should be allowed, bearing in mind the restrictions in s9 (1A) AJA and the regulatory objectives?

Wehavenofurthersuggestedservicestoaddatthepresenttime.

Question 11: Do you consider that some activity carried out by recognised bodies and RSPs should be exempted from SRA regulated activity? If so, please specify the activity or activities and provide the reasons for your views.

WewouldsaythatitisunfairthatallworkcarriedoutwithinarecognisedbodyoranRSPisSRAregulated,whereastheMDPpolicynowallowsnon-reservedlegalactivitytobeexcludedfromSRAregulatedactivityforanMDP.ThisisfarfromalevelplayingfieldandputsMDPsatasignificantcommercialadvantagecomparedtosolicitors‟firms.However,thealternative,ofdualorevenmultipleregulationisbynomeansattractiveandfraughtwithdifficultiesandagain,thepotentialforconfusionamongstclients,whowillexpecttheirworktoberegulatedtothesamehighstandardoftheprofession,regardlessoftheindividualwithinthefirmwhoundertakesit,

WewouldbeinterestedtoknowwhethertheviewofthePIinsurersbeensoughtinrelationtotheissuesraisedbythisconsultation.




RESPONSE OF THE SOLICITOR SOLE PRACTITIONERS GROUP TO THE LSB CONSULTATION ON THE DRAFT STRATEGIC PLAN 2015-2018

AND BUSINESS PLAN 2015/2016WerecognisethattheLegalServicesBoard(LSB)hasanenormoustasktofulfilinmeetingthe8regulatoryobjectivessetbySection1oftheLegalServicesAct2007(LSA),whichareeachinthemselveshugelydistinctandchallengingtasks.Wesettheseoutbelowsincewerefertothemthroughouttheremainderofourresponse:

• protectandpromotethepublicinterest

• supporttheconstitutionalprincipleoftheruleoflaw

• improveaccesstojustice

• protectandpromotetheinterestsofconsumers

• promotecompetitionintheprovisionoflegalservices

• encourageanindependent,strong,diverseandeffectivelegalprofession

• increasepublicunderstandingofthecitizen’slegalrightsandduties

• promoteandmaintainadherencetotheprofessionalprinciples.

Thelatter,ofcourse,isthenfurtherdefinedas:

• actingwithindependenceandintegrity

• maintainingproperstandardsofwork

• actinginthebestinterestsofclients

• complyingwithpractitioners’dutytotheCourttoactwithindependenceintheinterestsofjusticeand

• keepingclients’affairsconfidential.

WhenoneconsidersthattheLSBisresponsibleforalloftheaboveacrosselevenapprovedregulators(threeofwhicharealsolicensingauthorities),andwhichbetweenthemregulatedirectlyapproximately166,800lawyersand398alternativebusinessstructuresoperatingthroughoutthejurisdiction,theregulatoryminefieldandsheerscaleofthecomplexityofthistaskisstaggering.

Allmembersoftheprofessionwouldagreethatavibrantandhealthylegalprofession,properaccesstojusticeandawell-functioningjusticesystemareindeedcornerstonesofourcivilsocietyandmustbepreserved.

TheLSBsummarisesitsgoalas“toreformandmodernisethelegalservicesmarketplaceacrossEnglandandWales,creatingtheconditionsforcompetitive,innovativeandaccessibleservicesthatworkbetterforallusersandconsumersofthoseservices,whileprotectingbroaderconsumerandpublicinterests.”

Weare,however,extremelyconcernedthattheincreasinglyrapidpaceofchangeinthelegalmarketplace,whichseekstoopenthegatewaytonewbusinessmodels,growthandinnovationinthewayinwhichlegalservicesaredelivered,iscreatingregulatorychallengesatsuchafastpaceandtosuchalargeextentthattheveryregulatoryobjectivestheLSA2007hassetareinlonger-termjeopardy.

Changesfacingthelegalsectorwhicharedescribedasa“springboard”toabettermarketforlegalservicesmaywellbetheveryobstaclewhichcausesittotripandfalltoitsknees.

WeratherfearthattheimplicationsoftheLegalServicesAct2007arefarwider-reachingthanthoseconcernedmayhaveoriginallythought,andtheregulatoryreformsneededtodealwiththefall-outarebecomingsomethingofarunawaytrain.

‘Access’tolegalservicesisbynomeansaccesstogoodqualitylegalservicesandfollowingthemodelofothersectorssuchasfinancialservicesisnotnecessarilyagoodthing,giventherecentpitfallsevidentinthatsector.

Thereisamarkedcoredifferencebetweena‘consumer’anda‘client’anditissignificantintermsofthechanginglegallandscape.Theformersuggestsasomewhatcursoryexchangeofgoodsorservices(evenifthisisrepeatedovermanyyears–itisadiscreteexchange)andthelattersuggestingcare,considerationandprotectiveness(indeedaqualitativerelationship)inwhichprofessionalskillsareoffered(evenifonlyononeoccasion)thatismissingfromtheformer.Itmayseemaverysubtledifferencemerelyofterminologybutthisisdeceptive.Theemphasisofthedraftstrategicandbusinessplansuponthe



‘consumer’isindicativeoftheslowbutsurewayinwhichthecultureofconsumerism(asales-basedculture)asopposedtoclient-carehasbeenallowedtoseepintoaprofessionpreviouslyuniqueinitsstandardsofintegrity,qualityandprofessionalism.Thischangeinterminologyofitselfde-valuestheprofessionalservicesthatweprovide.

Draft Strategic Plan 2015 – 2018

TheLSA2007appearstoustohaveacomplexoverallregulatoryposition,intermsofthevastnumberofdifferentregulatorsandthelackofaproperreviewofwhetherthelistofreservedlegalactivitiesistheappropriateone.Thedifficultissueofregulationbytitleandactivityhasbeenignoredwithinthisoverallregulatoryarchitecturewhenthatissurelykeytoensuringthatconsumersareproperlyprotected?WewouldwelcometheLSB’sconsiderationofthereservationofadditionallegalactivities,bringingthemwithintheprotectionoftheregulatedenvironment.

ItisalsoahugeconcernthatthechangestothelegalmarketplaceopenedupbytheLSA2007havegonefullsteam-aheaddespitethepaucityofdataandresearchinmanykeyareasofthelegalservicessector.ItisabsolutelyvitalthattheLSBdevelopasoundevidencebaseforbetter-informedfuturedecisionandpolicy-making,notonlyonitsownbutincollaborationwithotherorganisations.

Thestrategydocumentstates,insettingoutthestrategicthemesforthenextthreeyearsthat“whilstwehaveidentifiedsomekeyworkpackagestosupportthem,werecognisetheneedtobeflexibleandtobepreparedtore-prioritiseandre-scope,shouldweneedtorespondtochangesincircumstancesoverthenextthreeyears”.Byimplication,thisneedforflexibilityisindicativeofthefactthatabsolutelynobodyhasanyideawhatthelegallandscapemightlooklikeoverthenextthreeyearsand,toourminds,theLSBiseffectively“holdingatigerbythetail”.

BothThemeA(breakingdownregulatorybarrierstocompetition,growthandinnovation)andThemeB(enablingneedforlegalservicestobemetmoreeffectively)dealextensivelywiththeaffordabilityand‘accessgap’betweentheneedforlegalservicesandwhatiscurrentlysupplied.Researchhasshownthatoverathreeyearperiod,halfofallUKcitizensexperiencedatleastonelegalproblem,butoneinthreedidnotgetthehelpthattheyneeded.Thisissaidtobeanopportunityforinnovativefirmsandprofessionals.IsitthereforebeingsuggestedthattheinnovationsandgrowthinnewbusinessmodelsmadepossiblebytheLSA2007maysomehowplugtheimmenseaccessgapleftbytheextensivereformstolegalaid?

Itisabsolutelycertainthateventhemostinnovativeoflegalproviderswillnotprovidelegalservicesfreeofcharge.Itisacknowledgedwithinthestrategydocumentthat“Someprovidersthatarereliantonadecliningflowoflegalaidworkmayfinditchallengingtofindalternativeincomestreams”.Thisis,ofcourse,truebutthestrategicplanthenfailstoaddressthemostglaring‘accessgap’ofall.

WefeelthatitisabsolutelyincumbentupontheLSB,aspartofitsremitundertheActtoprotectandpromotethepublicinterest,supporttheconstitutionalprincipleoftheruleoflaw,improveaccesstojusticeandprotectandpromotetheinterestsofconsumers,toimpressupontheGovernmentinthestrongestoftermsthatallothereffortstoachievetheseobjectivesareincompletewithoutaneffectivesystemoflegalaidthatensuresthese‘objectives’arenotmerelyrhetoricbutrealityforthemorevulnerableinsociety.WeareoftheviewthattheLSBiswronginconsideringthisfallsoutsideofitsremit.TheLSBstandsinauniqueposition.IthastheearoftheGovernment,itisentirelyneutralinasmuchasitisnotarepresentativebody,itdoesnotstandinthecorneroftheprofessionbutrathertheconsumerandithastheevidentialresearchtobackthisup.

Inthemeantime,familylawistheoneofthemostsignificantareasoflawwhichshouldbeapriorityfortheLSBinenablingdemandforlegalservicestobemet.

ThemeBreferstoenablingneedforlegalservicestobemetmoreeffectively.Wequestionwhatismeantby‘moreeffectively’?Doesthismeanmorequickly?Morecheaply?Moreaccurately?Withabetterstandardofclientcare?Amorepositive‘experience’or‘journey’throughthelegalprocess?Aneffectivelegalservicecanmeetamultitudeofdifferentthingstodifferentpeopleandtosaythatthetraditionalmodelsoflegalserviceprovisionarelesseffectivethanthenew,innovativebusinessmodelsisunhelpfulwithoutfurtherexpansionofwhatismeantbythis.

Thereisarealriskofconsumerconfusionandperceptionaboutwhatisandisn’tsubjecttolegalserviceregulationandissuesofprotection,qualityandprice.Itiscrucialforconsumerstoknowthedistinctionbetweenregulatedworkandunregulatedworkandnotbemisledintothinkingthattheyhavetheprotectionofanauthorisedpractisinglawyer(andtheconsequentregulatoryprotectionofindemnityinsurance,thecompensationfund,theOmbudsman,legalprofessionalprivilege,qualification,trainingandstaffskillsthatthisbrings)whentheydon’t.Thisisarealriskwhereprofessionalservicesaresplitintoseparateentities,wherebusinessesmayseektobeauthorisedbyoneoftheregulators,inordertogainthecachetofaprofessionaltitlewhereas



inreality,littleornoneofitsactivitieswillberegulated.Clientsmustbeclearlyawareofwhatservicestheyarebuyingandwhoregulatesthem.WeagreethatoneoftheLSB’sprioritiesshouldindeedbeensuringthatthereisclearinformationavailabletothepublictoenablethemtomakeinformedchoiceswhensourcinglegalservices.

Thereisnodoubt,inourmind,thatunreservedlegalworkundertakenoutsideoftheregulatoryframeworkislikelytoultimatelydamageconsumers,puttingitoutsidethereachofindemnityinsuranceandOmbudsmanprotection.

Theremustalsobesignificantclarityastoredressandotherremediesavailabletoconsumers.

Wearekeentoseealevelplayingfieldbetweentheregulatedandunregulatedsectorsothattheregulatedfirmscancompetefairly.Ofcourse,theSRA’scurrentconsiderationofreformstotheSeparateBusinessRuleareintendedtohavesuchaneffect.However,thefactisthatsmallerfirmsandsolepractitioners(SPs)arelesslikelytobenefitfromthechanginglegallandscapethanthelargerfirmsandABSs.Thosewhostandtogainthemostarethelargerfirms,ABSsandtheunregulatedserviceproviders.WorkingastheydoonalargerscalethanthesmallfirmsandSPs,theycannotonlyreducecosts,butalsohavetheresourcesandflexibilitytodiversify,investinseparatebusinessesandtechnologyandworkacrossregulatoryboundaries,todevelopinnovative,butuntested,newmodelsoflegalservicedelivery,whichperhapsincorporateanumberofrelatedservices.

TheincreasedcompetitionthatthischangeisalsointendedtocreatewillalsobeofsomethreattosmallfirmsandSPswhoarenotpositionedfinanciallytotakeadvantageofthesenewopportunities,butwhowillfindthemselveshavingtocompetewiththosewhodo.TheincreasedlevelofservicesthatABSsandlargerunregulatedprovidersmaywellbegintoprovideislikelytoleadtothemcapturingalargermarket-shareforbothregulatedandunregulatedworkasconsumersareencouragedtobringalloftheirneeds“underoneroof”.SmallfirmsandSPsarelikelytosufferasaresult.Thatwillnotcontributetoencouragingan‘independent,stronganddiverselegalprofession‘–indeed,quitetheopposite.Itisalsoratherironic,giventhedesireoftheLSBtoseethegrowthofsmallbusinesses–thoughperhapsnotsmalllegalbusinesses.

ThisthreatshouldnotbeignoredbytheLSBanddiscountedblandlyasanaturalconsequenceofinnovation,termedinthestrategydocumentas“theexitofthosewhocannotadapt”andthe“inevitableproductofanincreasinglycompetitivemarketplace.”TheLSBstatesthatitwillcontinuetotakeintoaccountthegeographicdiversityoflegalneedsacrossEnglandandWalesandthatitseekstocreate“diverseandethicallegalserviceproviders…..thatcollectivelysupportwiderpublicinterestobjectivesincludingtheruleoflawandaccesstojusticeforall.”ItcannotbeignoredthatSPsplayahugeroleindiverselegalservicedeliveryinthehighstreetsoftownsandvillagesallovertheUK,servinglocalcommunitiesandthevulnerablewhomayotherwisestruggletoaccesslegaladvicefromlargerfirmsinbiggercitiesoronline.ItalsocannotbeignoredthatahighproportionofBMEsolicitorsarerepresentedwithintheSPsectoroftheprofession,whichinturnmeansthatthereisarealthreattotheethnicdiversityoflegalservicedeliveryinBMEcommunities.

Itissaidthatthiswillultimatelybenefitconsumersbyprovidinggreatercompetitionintheprovisionoflegalservices,greateropportunitiestoaccessholisticservicesandpotentialreductionsincost.Itisnoticeablethattheword“quality”rarelyfeatures.

Ifthesechangesleadtoawateringdownofthebrandandreputationofthetraditionalsolicitorqualification,letaloneapossibledeclineinthenumberofsmallregulated,highlyqualifiedandexpertserviceproviders,theconsumermayultimatelysufferfrombothreducedchoice,reducedqualityoflegalservicesandreducedassurancethathavingworkundertakenbyaqualifiedpersonprovides.Farfromcreatingmoresustainableregulatedservices,theveryoppositecouldbetrueforsmallerfirmsandSPsaspricesaredrivendownfurtherbyincreasedcompetitionfromthede-regulatedsector.

Whethertheplayingfieldis,indeed,levelledisopentoquestion.

ItisunfairthatallworkcarriedoutwithinarecognisedbodyoranRSPisSRAregulated,whereastheMDPpolicynowallowsnon-reservedlegalactivitytobeexcludedfromSRAregulatedactivityforanMDP.ThisisfarfromalevelplayingfieldandputsMDPsatasignificantcommercialadvantagecomparedtosolicitors‟firms.However,thealternative,ofdualorevenmultipleregulationisbynomeansattractiveandfraughtwithdifficultiesandagain,thepotentialforconfusionamongstclients,whowillexpecttheirworktoberegulatedtothesamehighstandardoftheprofession,regardlessoftheindividualwithinthefirmwhoundertakesit,

Thereareotherregulatoryaspectsofconsiderationfortraditionallawfirms,notleastofwhichistheissueofPII.ForSPs,thePIIpremiumcanbethedecidingfactorinthefinancialviabilityofafirm.WithAccountantsabletoofferlegalservicesregulatedbytheICAEWandtheirminimumlevelofPIIcoverat£500,000,wearestillfarfromalevelplayingfield.WehavemadeourviewswithrespecttotheminimumlevelofPIIcoververyclearinourconsultationresponsesonthoseissuesandwedonotseekorsupportareductioninminimumlevelsforsolicitors,toachieveamorelevelplayingfield.Therisksofreducingminimumlevelsofcoverareprohibitivetothis.Nevertheless,itisunrealistictosuggestthattheLSA2007createsalevelplayingfield,whenthereareothersignificantdynamicswithinthetraditionallawfirmthathinderthis.



WhatistheviewofthePIinsurerswithrespecttounbundling,mingledwithself-helpprovisions?Similarly,thebanks?Thosearetheinstitutionswhoultimatelydecidewhetherafirmcanoperateornot.WewouldbeinterestedtoknowwhetheranyresearchhasbeenundertakenofthisnatureininformingtheLSB’sdraftstrategicplanandbusinessplan?

Further,manyoftheregulatorychangesforthetraditionallawfirmarebeingaddressedaftertheracehasbeenrunningforsometime,andtheSRAhavebeenbehindthecurve.Thishassetthesectorback,particularlysmallfirmsandSPs,considerably.SPs,areoften,bytheirverynatureentrepreneurialandinnovativeandmanyofthese,whoprovideverynicheandspecialistserviceswillcompetewithoutdifficultyinthechangedlegalmarket.However,therearemanySPswho,forthereasonssetoutabove,simplywon’t.

TheneedfortheregulatorstoconsideritsregulatoryfunctioninlinewiththeobjectivesoftheLSA2007iscreatingcomplexityandconfusion.WeattachourresponsestotherecentSRAconsultationsdealingwiththeSeparateBusinessRule,ConsumerCreditRegulationandInsolvencyPracticebywayofexample.Thesedealwiththedetailedimplicationsofproposedde-regulation,forexamplethecomplexitysurroundingreferrals,iftheproposedreformstotheSBRgoaheadandtheriskofcasesmovingbackandforthbetweenregulatedandunregulatedservices,throughunbundledservices,anddifferentprovidersdealingwithdifferentpartsofthesamecase,inawaythatprejudicestheclient.Itisdifficulttoseehowalesssophisticatedconsumer(theaveragemanorwomanonthestreet,whomtheLSAisintendedtobenefit)willunderstandwhatmaybecomplicateddivisionsofworkbetweenaseparatebusinessandanauthorisedperson.Thelinesarefurtherblurredwhenweintroducedtheconceptof‘self-service’viaonlinetechnologytothealready-complexequation.

WeareawarethatboththeLSBandtheregulatorsarepowerlesstoimposerulesupontheunregulatedproviderswhoundertakeoneofthesixreservedactivitiesandarepowerlesstotakeprotectiveinterventionistanddeterrentactioninrespectofthem(unlesstheyarealsoauthorisedpersons).Whenoneconsidersthatin2013,theunregulatedsectoraccountedforaturnoverofbetween£5.84billion-£8.76billion,thisisahugeconcern.AllthoseconsumerswhocreatedthisturnoverwillhavehadnorecoursetotheLegalOmbudsmanandtheexposureofconsumersintheareaofwill-writerstounfairsaletacticsiswelldocumented.Despitethatbeingaclearlessonfromwhichweshouldlearn,wearewideningthegatewayevenfurther.

Thisconcernisheightenedbythefactthattheexpansionoftheunregulatedsectorispredictedtomatch,ifnotexceed,theexpansionoftheregulatedsector,giventhattherearenobarrierstoentryandanon-existentregulatorycostbase.Onesuchexampleistheprovisionofon-lineservices.Theunregulatedsectorhavebeenabletoofferthisserviceforyears.Theregulatedsectorhavenot.Again,hardlyalevelplayingfield.

Oneconsequenceofthedeclineinlegalaidisthecontinuedriseinthenumberoflitigantsinperson,vulnerabletorookieMcKenzieFriends,whoareneitherqualified,regulated,norinsuredandinrespectofwhomtheconsumerhasnoredresswhatsoever,despitethefactthatmanyMcKenzieFriendsareillegallychargingfortheirservices.FarmoreneedstobedoneinrespectofthisissueifthepublicistobeproperlyprotectedinaccordancewiththeSection1objectives.

Wenotethatthestrategicplanwillinvolveconsiderationofhowsection163oftheAct(voluntaryarrangements)mightbeusedtoensurenecessarysafeguardsareinplaceforconsumers,forexample,accreditingcodesofpractice/kitemarkingforunregulatedprovidersetc.inasimilarmannertohealthcarepractitioners(eg.physiotherapists)Thedifficultyisthatthepoorprovidersarethosewouldnotinvestinsuchvoluntaryarrangementsandsignuptothecodesofpracticeinanyevent.Afurtherconcernisthecost–inourview,sucharrangementsandcodesofpracticewouldhavetobefundedbytheunregulatedsectoritself.

WearealsoconcernedbythesuggestionthattheLSBmay,induecourse,encourageandfacilitatetheextensionofqualityassuranceschemesandthedevelopmentofnewschemesforbothregulatedandunregulatedproviders.Thisislikelytobedeeplyunpopularwiththeregulatedsector,giventhenumberofsuchschemestowhichtheyarealreadysubjectandthelikelyincreasedcostoftheseschemes.Weacceptthesearelikelytobenecessaryfortheunregulatedsectorandshouldbemodelledonthosealreadyinexistenceintheregulatedsector.Theseshouldbefundedbytheunregulatedsector.

WhilstweagreethatitisnecessaryfortheLSB,aspartofitsworkoverthenextthreeyears,totakeintoaccountbothregulatedandunregulatedprovidersandtoconductresearch,engagementandintelligencegatheringcoveringbothregulatedandunregulatedservices,wearefrustratedandconcernedthatitwillbeonlytheregulatedsectorwhofootthebillforthiswork,whilsttheunregulatedsectorcontinuetoearntheir£8.76billion.Again,thisisawiderconsequenceoftheLSA2007thatisofmuchconcernnotmerelytoSPsbuttothesolicitor’sprofessionasawhole.

TheextensionofthejurisdictionoftheLegalOmbudsmantoalllegalservices,includingunregulatedlegalservices,willrequireprimarylegislationandproperresourcing,allofwhichcouldtakeyearsandthechangesinthelegalmarketplacearenotbeingheldbackuntilthisinplace,leavingclientsvulnerableinthemeantime.Thisdemonstratesthehaphazardand‘patchworkquilt’



approachtothede-regulationoflegalservicestakenbythisGovernmentwhichfliesinthefaceoftheregulatoryobjectivessetoutatSection1.Howwillsuchanexpansionbefunded?Woulditnotbesimplertoexpandthescopeofregulationbysimplyaddingtothelistofreservedactivities,placingsuchworkonlyinthehandsoftheregulatedsector.

WearecurioustoknowtheLegalOmbudsman’sviewofwhatconstitutesalegalservice?Thismaydiffersignificantlytotheviewsofregulators,licensingauthoritiesandtheLegalServicesBoard.

ThecostofanyextensionoftheroleoftheLegalOmbudsmanisafurthercauseforconcern.

Afurtherconcernisthelikelyincreasedfocusontheinternationalcontext,includingforeignprovidersandinvestorsincreasingtheiractivitiesintheUK,otherjurisdictionsdevelopingtheirownliberalisationagendas,informedbytheprecedentsetbytheAct,moreprovidersoperatingacrossjurisdictionsorprovidingdifferentservicesfromdifferentjurisdictionsandcontinuingflowsofstudentsandlawyers,especiallyintheearlyyearsoftheircareers,intotheUK.Therisks,includingfundingofterroristactivities,maintainingconsistentstandardsofcompetencyandregulatorycomplexitiesofthesetrendsmustsurelybeobvious.HowcantheGovernmentpossiblythinkthattheLSB,staffedby30people,willbecapableofensuringthattheelevenregulatoryandlicensingbodiescanconsistentlyandproperlyregulate,interveneandprotectconsumers,whilstavoidingduplicationwithinsuchavastlegallandscapeandcomplexregulatoryarchitecture?

Thestrategydocumentreferstothedevelopmentofprocessesthatmake“doingityourself”easier,alongwithunbundlinganddigitalservicedeliverywhich,itissaid,will“helpmanyconsumersresolvelegalissuescheaplyandconveniently.”Whethertheydosocorrectly,obtainingthecorrectoutcome,doesnotappeartobeaconsiderationandwefailtoseehowthe“success”ofthesenewmodelscanbeproperlyresearchedandmeasuredbytheLSBoranyorganisation.WeagreewiththeLegalServicesConsumerPanelinasmuchasthesedevelopmentshavethepotentialforcreatingdangersforconsumerssuchaswebmonopolies,‘behaviouralpricing’(ieonlinepricesthatvarydependingondataaboutwhichotherwebsiteshavebeenvisitedandwhen)andgreaterscopeformisuseofpersonaldata.Again,thesedevelopmentshavebeenpermittedbytheActwithoutanydataorresearchintothepotentialimpactuponconsumers.Manyvulnerableconsumerscannotaccesstheinternetandlackthecapabilitytocompletelegalandadministrativeprocesseswithoutsignificantlevelsofsupport,ironicallythosesameconsumerswhocannolongeraccesslegalaid–hencetheneedfortheLSBtofeedsuchmessagesbacktotheGovernment.

WeagreethattheLSBshouldundertakesomeinitialworkinthefirstyearofthisstrategicplanperiodtobuildonitsexistingknowledgeandevidencebaseandtofillthegapsinunderstandingofhowlegalneedsaremetinthelegalservicesmarket,andhowconsumersnavigatethroughthemarket.Itisimportantfortheprofessiontogainanunderstandingofhowconsumerssolvetheirlegalproblems,thechoicesandinformationavailabletothem,recenttrendsinpricingandaffordabilityandwhatthekeybarrierstomeetinglegalneedsare.However,althoughitisrelativelyeasytogatherstatisticson‘whowentwhere’forlegaladvice,itisfarhardertomeasurethesuccessofthatlegaladviceintermsofthelongertermoutcomefortheclient,whetherthatoutcomewouldhavebeenbetterorworseifthelegalworkhadbeenundertakenbyadifferentprovider,theclient’sexperienceofthatlegalprovider(intheabsenceofhavingacomparative).

Thestrategicplanfocusesonexploringwaysinwhichlegalservicescanbedeliveredmoreefficiently,atlowerpricewhileretainingappropriatequalitysafeguards.Thisisapotentiallydangerousapproach.Legalaidfixedfeesandsubsequentcutshavesurelyshownthatitisimpossibletosafeguardqualitythroughloweringthepriceofaservice–theconsumerinevitablysuffersasdemonstratedbythenumerousmiscarriagesofjusticealreadyprevalentthroughoutthecriminaljusticesystemasaresultofridiculouslylowfixedfeesandtheconsequenttwo-tiersystemofpublicly-funded–v–privatefundingdefencethathasdeveloped.

Further,thereisahugeriskthattheLSAisencouragingalegalmarketofsuchcompetitivenessthatprovidersarepricingundercost.Thisisadangerouslong-termstrategyforproducingastableandsustainablelegalmarketplace.TheimpactofalargeABSprovidersuddenlygoingbustcouldhaveahugelydetrimentaleffectuponitsclientsandcouldleavehugegapsinsupplythatcannotbefilledbecausesmallerfirmsandSPshavebeenforcedoutofthemarketplacebyunrealisticpricecompetition.

Weagreethatthestrategicplanshouldexplorebetteravailabilityofinformationforconsumers(rangingfromguidanceforconsumerstothetransparencyofspecificparameterssuchaspriceandqualitytoinformparticularpurchasingdecisions)sothatconsumerscanmoreeasilynavigateandmakedecisionsaboutlegalservices,aswellascarryingoutbroaderworkonpubliclegaleducation.TheLSBmustensurethattheinformationprovidedtothepublicisaccurate(wehaveparticularconcernsaboutcomparisonwebsites).

Wewouldquestionwhethertherehasbeenanyresearchconductedamongstconsumersthemselvesastowhattheyunderstandtobeanadequatestandardofprotection?Thereisalsoasignificantdifferencebetweenan‘adequate’standard,whichsuggestsabareminimum/justgoodenough,asopposedtoan‘appropriate’standard.



Itshouldalsoberememberedthattherisktotheconsumerwillvarydependentuponthenatureoftheconsumereg.alargeorganisationasopposedtoavulnerableoldlady,andthetypeoflegalworkbeingundertaken.

WeagreethattheLSB’sperformance,evaluationandoversightactivitieswillcontinuetobevitalinhelpittounderstandthereal-worldchallengesfacedbytheregulatorsandmarketrealities.Inparticular,wewouldstronglyurgetheLSBtolistentotheregulatedsectorasmuchasitseemstolistenandbedrivenbytheunregulatedsector.

Business Plan 2015/2016

Wewouldwelcometheproposedreviewofbarrierstofirmsmovingbetweenlegalregulators,inparticularfocusinguponthePIIpositionandcompensationrequirementsthatexistbetweendifferentregulators.Attentionshouldalsobegiventorun-offcoverrequirementsandsuccessorpracticerulesacrossdifferentregulators.Informationaboutthebenefitsandrisksoffirmsmovingbetweenlegalregulatorswouldbehelpfultotheprofession.

Wewouldalsowelcomeareviewofregulatoryrestrictionsonchoiceofinsurerfordifferententitiesandthepotentialpositiveornegativecostofsuchrestrictionsandtheimpactofremovingthem.

Researchshouldbeundertakenintothedifferentlegalneedsofdifferenttypesofconsumersincludingvulnerableconsumers,howtheychoosetodealwiththeirproblemsandthereasonswhy.Thisshouldbecarriedoutinconjunctionwithstakeholderstocarryoutsurveysofindividualconsumersandsmallbusinessestoascertainhowtheyrespondtolegalproblemsincludingwhetherornottheychoosetoseekadviceandtheirchoiceofprovider.

Researchshouldalsobeundertakenintotheimpactofunbundledservicesonconsumers,withananalysisofthefindings.

WeremainconcernedthattheLSB’scross-cuttingresearch(andwenotetheproposedon-lineindependentlegalservicesresearchhubwithindependenteditorialcontrol)currentlybeingexploredwiththeSRA,thecostsofwhichweagainwillfalltotheregulatedsector.




RESPONSE OF THE SOLICITOR SOLE PRACTITIONERS GROUP TO THE LEGAL OMBUDSMAN CONSULTATION ON THE DRAFT

STRATEGY AND BUDGET 2015-2017 Question 1: Do you agree with our overall analysis of the broader context for our strategy? Are there other issues that you think we should take into account?

WeagreethatthestrategymustbelookedatwithinthewidercontextoftherapidlychanginglegallandscapeintroducedbytheLegalServicesAct2007.

Itis,infact,somewhatfrustratingandrathershort-sightedonthepartoftheGovernmentthattheLegalOmbudsmanservicewascreatedbyParliamentastheindependent,impartial‘singlepointofentry’Ombudsmanschemeforcomplaintsfromconsumersofregulatedservices,whenthewritingwasclearlyonthewall(andParliament’sintentionwas)thatasignificantproportionoflegalserviceswouldinthefuturefalltobeprovidedtoconsumersbyunregulatedproviders.

WeagreethattheOmbudsmanschemedoes,therefore,needtoadaptinresponsetothedynamicsofinnovationandchange.However,iftheschemeistoremainasthe‘singlepointofentry’schemeforcomplaintsfromconsumersoflegalservicesperse,andiftheregulatoryobjectivesoftheLSA2007aretocreatealevelplaying-field,theschememustbeproperlyequippedtodealwithcomplaintsagainstboththeregulatedandtheunregulatedsector.

Thoughthevoluntaryextensionofitsremitisastartingpoint,andtheonlyoptionfortheOmbudsmanschemegivenitscurrentlegislativestatus,itisapoorsecondtoacompulsoryextension.Itisthepoorqualityunregulatedproviderswhoposethegreatestrisktotheconsumer.Itispreciselytheseproviderswhowillnotsignupvoluntarilytotheschemeandmustbebroughtwithinitsjurisdictiononacompulsorybasis.

Toachievethisnow,however,willrequirescumbersomeandtime-consuminglegislativeandregulatorychange–changethatisnowfarbehindthecurveofdevelopmentscurrentlytakingplaceinthelegalmarket.

EvenshouldtheGovernmentnowrecognisetheerrorandseektoputthisrightthroughfurtherlegislation,thegrowthoftheOmbudsmanschemeanditsdevelopmentofamodelwithamoreflexiblerangeofsolutionswillbecostly–andnodoubtmorecostlythanithaditbeencorrectlysetupinthefirstinstance.

Weareconcernedthatcostsofthisextensionofremit(bothvoluntaryandcompulsory)shouldnotfalltotheregulatedsector,whocurrentlyfundthescheme.Theunregulatedsectormustberequiredtofundthatpartofthescheme’soperationwhichservicesthemandthosecostsmustbeproportionate.Therefore,shouldtheOmbudsmanfinditisdealingwith,forexample,morecomplaintsagainsttheunregulatedsectorthantheregulatedsector,costsshouldbemetbythosesectorsproportionately.ParticularlysincewenotethatpartofthestrategywillinvolveworkingwiththeproviderswithinthenewjurisdictionstoassisttheminunderstandingtheroleoftheScheme,andassistingthemwithfirsttiercomplaintshandling.Thisworkshouldnotbefundedbytheregulatedsectorwho,asaresultoftheirregulatorystatushavealreadyfamiliarisedthemselveswiththeseaspects.

TherearefurtherdifficultiesintheextensionoftheremitoftheLegalOmbudsman.WehaverespondedtotheLSBConsultationonitsDraftStrategicPlanandBusinessPlan2015-2018andmadeourviewswithrespecttotheemergingcomplexregulatoryarchitectureveryclear.

Oneofthedifficultiesisthelikelihoodoflegalservicesofferedtoconsumersthatcutacrossregulatoryboundaries,withsomeworkbeingundertakenbyalawyer,somebyanaccountant,somebyanunregulatedbody-whereshouldthelinesthenfallastothemostappropriatebodytodealwithcomplaintsinrelationtothatservice?WhereshouldthelinesfallastoconsumerredressandPIIclaims?Ifthereistobealevelplayingfieldfortheregulatedlegalsector,theremustsurelybeanalignmentofthewiderenvironmentofprofessionalliabilityforpoorservice.

Forexample,whilsttheLegalOmbudsmanwillnowbegintoacceptcomplaintsaboutaccountantsregisteredwiththeICAEWrelatingtoprobate,thereisavastdifferencebetweentheminimumlevelofPIIcoverfortheregulatedlegalsectorandtheminimumcoverforaccountantsof£500,000.WehavemadeourviewswithrespecttotheminimumlevelofPIIcoververyclearinourconsultationresponsesonthoseissuesandwedonotseekorsupportareductioninminimumlevelsforsolicitors,toachieveamorelevelplayingfield.Therisksofreducingminimumlevelsofcoverareprohibitivetothis.However,theLegalOmbudsmanasameansfortheredressofconsumercomplaintsshouldnotbelookedatinisolationfromthewiderredresslandscapewhichmustincludePII.



ItwouldseemcleartousthattheLegalOmbudsmanwillalsoneedtobeextremelyclearinitsdefinitionof‘whatisalegalservice?’inordertoaddresssomeofthepossibleconfusionthatmayotherwisearise.WhattheOmbudsmanmayconsideralegalservicemaydifferfromtheviewoftheLSB.

Afurtherquestionthatarisesfromthebroaderstrategyistheextenttowhichinformationaboutcomplaintsagainstindividualproviderswillbedisseminatedinthepublicarena.Weareconcernedthattheincreaseduseof‘comparisontools’forprovidersoflegalservices,suggestedbytheLSB,andtheincreased‘consumerist’approachtosuchservicesratherthanthetraditional‘client’relationship(theformersuggestingasomewhatcursoryexchangeofgoodsorservicesevenifthisisrepeatedovermanyyears–itisadiscreteexchange,andthelattersuggestingcare,considerationandtheprotectivenessofaqualitativerelationshipevenifonlygivenononeoccasion)hasthepotentialforthepublicationonlineofinaccurateorincompleteinformation(possiblyeveninformationaboutthewrongprovider)whichcouldbepotentiallydevastatingtothereputationofafirm.

Onasimilarnote,itwouldseemtousthatitwillbeimportantfortheLegalOmbudsmantoworkcloselyalongsidetheLSBineducatingandinformingthepublicaboutthedistinctionsbetweenregulatedandunregulatedprovidersinrespectofconsumerredress(ie.thedistinctioninPIIcover)anddisseminatinganyinformationgatheredfromthedevelopmentofavoluntaryschemeforunregulatedproviders,sincethiswillinformtheLSBinitsroleinprovidingguidanceandinformationtomembersofthepublic.

Question 2: Do you agree that we have identified the right priorities to focus on over the coming year? Are there other priorities that we should consider?

Weagreethatyouhaveidentifiedtherightprioritiestofocusonoverthecomingyear.

Wewillbeinterestedtoreceivestatisticsandanalysisrelatingtothefirstfullyearofthenewremittoresolvecomplaintsaboutclaimsmanagementcompaniesandaccountantsandtheoutcomeofanyattempttointroduceavoluntaryschemefortheunregulatedsector.

Attheveryleast,itwillbeinterestingtoascertainatleastsomedataonthetypeandnumberofcomplaintsreceivedaboutunregulatedproviders.Giventhecurrentpositionoftheunregulatedsector,wewouldimaginethatdataaboutthelikelyscaleofcomplaintsis,atpresent,quitescarceunlessithasbeencollatedbyconsumerbodies?

WewouldhopetoseetheLegalOmbudsmancontinuingtofeedbacktothesectorasawholewithaviewtoimprovingbestpracticestandardsacrossboththeregulatedandunregulatedsectors.

Question 3: Do you agree that we should retain our four goals?

Yes,weagreethatyoushouldretainthefourgoalssetout.

Question 4: Have we clearly identified what each of our goals mean?

Goal1:Tocontinuetoimproveyourefficiency

Yes–wearefullysupportiveofamoreefficientLegalOmbudsmanscheme,efficiencynotonlybeingaboutcost,butalsothespeedwithwhichcomplaintsaredealtwithandresolved,withoutcompromisingonthequalityoftheservicegiventobothconsumersandproviders.

Weareparticularlyconcernedaboutcost-efficienciesgiventheincreasedjurisdictionforCMC’sandaccountants,theonlinecomplaintsportalandthemoveoftheLegalOmbudsmantonewpremises.

Goal2:Toimplementchangestoyourjurisdiction

Yes–wearepleasedtoseeyourintentionforcoststobeapportionedandaccountedforappropriately.Doesthismeansasbetweeni)thecorejurisdictionoftheregulatedsectorii)thenewjurisdictionforCMC’sandaccountantsandiii)anypotentialvoluntaryschemefortheunregulatedsector?

Goal3:Tohelptocreateanimprovedlegalcomplaintshandlingsystem

Yes–thekeyaspecthereisthecreationofacoherentandlevelplayingfield.Itisnotedthatthisgoalincludesdevelopingarangeofrelevant,tailoredandappropriateserviceswithinthescopeofthecurrentombudsmanschemeandidentifyingopportunitiestobuildonthistoreflectthechangingnatureofthemarketplace.Wewouldnotwishtoseeasystemdeveloped



wherebytheresolutionsandpenaltiesimposedontheunregulatedsectordonotmirrorthoseapplicabletotheregulatedsector.Ifconsumersaretobefullyprotected,theymustbeassuredthattheywillbeofferedthesamemannerofredress.

Goal4:Todisseminatewhatyouhavelearnedmorewidely

Yes–thisisimperativeandaveryusefulwayforthesectorasawholetolearnlessonsanddevelopbestpractice.

Youranalysisandinsightgenerated,inparticular,fromcaseswithinyournewjurisdictionwillbeinvaluableinhelpingtheGovernment,LSBandthesectoraswholebetterunderstandanyrisksimposedbytheunregulatedsector,thelikelyscaleofpotentialcomplaintsagainsttheunregulatedsectorifthisweretobebroughtwithinthecompulsoryjurisdiction.

Thiswillinturnassistinensuringthatconsumersareabletomakebetterinformedchoicesabouttheirlegalserviceprovider,baseduponevidenceanddataofwhichthereisapaucityatthepresenttime.

Question 5: Do you agree that the assumptions and risks we have taken into account in setting our proposed budget are sensible and appropriate?

Yes–weagree,asfarasthesego.WearepleasedtoseethatthebudgetsforthecorejurisdictionoflegalcomplaintsandtheCMCcomplaintsarefinanciallyring-fenced,saveforthe‘sharedcosts’oftheinfrastructure,whichmayinfactmeanthatbaseduponeconomiesofscale,therecouldbecostssavings.

Weagreethatsomeoftherisksidentified,particularlythedemandforCMCcomplaintsisunquantifiableandcouldexceedthepredictedlevelsaccountedforwithinthebudget.

Presumably,ICAEWworkwillfallwithinthecorejurisdictionoflegalcomplaints?Howwilltheaccountancyprofession,savefortheindividualcase-handlingfees,berequiredtocontributetothesharedinfrastructurecosts?

Wecannotseeanyreferencetotheproposedvoluntaryschemefortheunregulatedsectorwithinthebudgetandappreciatethismaybeduetoitsuncertainstatus.However,ifthatschemeisdeveloped,andifthosecasesfallintothecorejurisdictionoflegalcomplaints,howisitproposed(savefortheindividualcase-handlingfees)thattheunregulatedsectorcontributetothesharedinfrastructurecosts,andthecostsdirectlyattributabletothesettingupandrunningofthescheme?

Question 6: Do you agree that the KPI’s we are proposing for 2015-2016 are the right ones?

Yes,weagree.WeassumethattheseapplyequallytoboththecoreandCMCjurisdictions?

ThoseKPI’smay,however,bedifficulttoachieveifthereisasignificanttake-upoftheproposedvoluntaryschemeforunregulatedproviders.Bothcaseresolutiontargetsandunitcosttargetsmayprovetobeunrealisticinrelationtotheunregulatedsector,wherewewouldexpectcomplaintsresolutiontobepotentiallylessstraightforward.

Inlightofthepossiblefurtherextensionofthejurisdiction(whichoughttoincludethecompulsoryjurisdictionoftheunregulatedsector)wecanseehowtheKPI’sarepotentiallyunrealistic–suchtargetsmaynotbeachievablewhendealingwithcomplaintsagainstunregulatedlegalproviders,particularlygiventhecomplexdeliverystructuresthatthesemayinvolve,includinginternet-basedservices.

Whilstwecansee,therefore,thatanoutcomes-focusedapproachandframeworkfitsbetterwiththewiderjurisdiction,thespiritoftheKPI’sshouldnotbelost,particularlywithrespecttoqualityandtimeliness.Thewayinwhichimpactismeasuredshouldinclude:

• %ofstakeholderswhohaveconfidenceinourdeliveryagainstourmission

• %ofusersoflegalservicesinthelasttwoyearswhohadheardoftheLegalOmbudsman

Itshouldalsobemeasured,inthelongertermagainsttheimpactoftheserviceuponbestpracticeandstandardsacrossboththeregulatedandunregulatedsector,demonstratedoveraperiodoftimeultimatelybyareductionindemand.




RESPONSE OF THE SOLICITOR SOLE PRACTITIONERS GROUP TO THE SRA CONSULTATION REGULATION OF CONSUMER CREDIT –

THE SRA’S REGULATORY ARRANGEMENTSQuestion 1: Do you agree that it is appropriate for the consumer credit activities set out above to be ‘prohibited’ from regulation by the SRA under Part 20 FSMA

SPGrespondedtothefirstconsultationdealingwiththeregulationofconsumercreditactivitiesinOctober2014.Wewerepleasedthat,asaresultoflisteningtotheviewsoftheprofession,theSRAaltereditsproposaltowithdrawfromthePart20regimeanddecidedthattherewasbenefitinremainingwithinthis,sothattheSRAwouldcontinueasa“DesignatedProfessionalBody”toofferexemptiontofirmsfromtherequirementtobeseparatelyauthorisedbytheFCAinordertocarryoutFSMAregulatedactivities.

Ourconcernsatthattimewerecentredaroundtheunnecessarycost(between£100-£15,000)andextraregulationonfirmsrequiredtobedual-regulatedbyboththeSRAandtheFCA.Thepresentregimehasenabledlawfirmstoengageinregulatedconsumercreditactivitieswithouttheadditionalburdenandcostofanadditionallayerofregulationbyasecondregulator,whichwouldbeengenderedbytheneedtoapplytotheFCAforauthorisation.AnyadditionalregulatoryfeestobeaddedtothecostofPCrenewals,PIIandtheoverallcostofregulatorycomplianceforone’sfirmwouldbe,atbest,deeplyunwelcomeandatworst,prohibitivetopractice.

WealsohighlightedatthattimetheareasofsolepracticemostlikelytobeaffectedbytheSRA’sproposaltowithdrawfromtheregime:

iv) firmsundertakingdebtrecoveryworkaspartoftheirday-to-day-work;

v) firmsundertakingdebtadviceaspartoftheirday-to-daywork;

vi) Theofferingofafacilitytoclientstomeettheirlegalcostsbywayofinstalments–suchproposalspotentiallyexceedingaperiodof12monthsandexceedingatotaloffourrepayments,butevenifwithinthoselimitations,suchagreementsmayincludeprovisionforinterest,thereforefallingoutsideoftheexemption.

ItisappreciatedthattheFCA’sregulatoryframeworkassetoutintheConsumerCreditSourcebook(CONC),isdesignedprimarilyforfinancialinstitutionsandimposingdetailedobligations,isvastlydifferenttotheSRA’sapproach,whichfocusesondevelopinganddeliveringregulationproportionatetothenatureofanentityinanoutcomes-focussedmannerandwiththeremovalofprescriptiverules.

However,wedidnotviewthosetwoapproachesasirreconcilable.TheFCA’sregulatoryframeworkfocusesonincreasingprotectionformembersofthepublicwhoobtaincredit.Assolicitorssubjecttoastrictcodeofconductwhoarealreadysubjecttoconsiderableregulatoryscrutiny,theFCAshouldsurelyrecognisethattherisksposedbytheregulatedlegalsectorareconsiderablylessthanthoseposedbythefinancialinstitutions.Therefore,whilsttheFCA’srulebooksetsoutdetailedobligationsonfirms,andtheSRA’shandbookisbasedonanoutcomefocussedsystemwhichisincompatiblewiththis,theunderlyingprinciplessetoutintheFCA’shandbookareparalleltothecorevaluesoftheprofessionunderwhichsolicitorsarejudgedundertheexistingSRAregulatoryregimeie.integrity,honesty,opennessandfairness.

WewerealsoconcernedabouttheFCA’sthresholdcriteriaforqualification,inparticular:

v) WhatwouldtheFCAconsidertobeaneffectiveleveloffirmsupervision?

vi) WhatwouldtheFCAconsidertobe‘appropriatefinancialresources’,‘skillsandexperienceofthosemanagingthefirm’saffairs’?

vii)WhatwouldtheFCAconsidertobeasuitablelevelofcompetenceandabilityofmanagement?

viii)WhatwouldtheFCAconsidertobeanacceptable‘businessmodel’and‘strategyfordoingbusiness’?

WhilstweacceptedthattheFCAhaveatwo-tieredrisk-basedapproachtoauthorisation,andwouldofferguidanceonwhetherfirmsneededtoapplyforlimitedorfullpermission,wewereconcernedthatitwouldbesimplyimpracticalandoneroustoexpectsolepractitionerstohavethetimetoinvestinstudyingtheguidanceandcompletingtheapplication,giventhealreadyenormousamountsoftimethathavetobespentincompletingPCrenewalforms,authorisationrenewalform,PIIformsandthelistgoeson.



WearethereforepleasedthatthereisanacceptanceonthepartoftheSRAandtheFCAthatgiventhenaturalsynergybetweentheprincipleswithintheSolicitor’sCodeofConductandtheFCArules,itispossiblefortheFCAandSRAtocontinuetoworktogetherinmanagingandmonitoringtheperformanceandintegrityofthosefirmsinvolvedinconsumercreditactivitieslargelyinthewayithasdonetodate.

Inparticular,wearenowsatisfiedthattheproposalsdonotposeanyrisktosolepractitionersofbeingforcedoutofthemarketduetothecostofdual-regulation.

Wealsopreviouslyhighlightedthedistinctionbetweenconsumercreditactivityarisingoutof,orbeingcomplementarytootherprofessionallegalservicesprovidedtotheclient,asopposedtoconsumercreditactivity,suchasdebtrecoveryordebtadvicework,giveninisolationtoaclient,outsideofandnotincidentalto/complementarytoalegalservicesuchasadvocacyorlitigationservices.

Wethereforewelcometheextensiontothe“contentiousbusiness”exclusion,whichwillcoverworkpriortoissueof,and/orincontemplationofproceedings.Thisisanexclusionwhichwillbenefitmanysolepractitionerswhoprovidedebtrecovery/collectionanddebtadviceworkaspartoftheirday-to-dayadvocacy/litigationcaseload.

Wearealsoparticularlydelightedbytheamendmenttotheexemptioninarticle60FoftheFinancialServicesandMarketsAct2000(RegulatedActivities)Order2001,toincreasethenumberofinstalmentsoverwhichlegalservices/transactionscanbefinanced,fromjustfourinstalmentstotwelveinstalments,allowinggreaterflexibilityintheabilityoffirmstomakedeferredpaymentarrangementswithclients.Ashighlightedinourpreviousresponse,thiswasofhugeconcerntous,sincemanysolepractitionersofferclientsanoptiontomakepaymentsfortheirservicesbymonthlyrepayments,inanagewheremanyclientswouldotherwisestruggletopayfortheirlegaladvice.Thisis,inourview,ahugebenefittoconsumersaswellastofirms.

Weare,though,mindfulthatagreementswillonlybeexemptwherethetotalnumberofrepaymentsislessthantwelve,madeoveraperiodoftwelvemonthsorlessandwithoutinterestorothercharges.AnyagreementoutsideofthosetermswouldnotbeexemptandwouldstillrequirethefirmtocomplywiththeamendedConductofBusinessRules,whichdoimposeapotentiallycumbersomerequirementtoassesstheclient’screditworthiness,discussedfurtherbelow.Itdoes,however,representasignificantimprovement.Eveninthosecircumstances,firmscouldnotapplyavariablerateofinterest,unlessFCAauthorised.

Itseemstousentirelyappropriatethatfirmswhoprovidedistinctandspecialistconsumercreditservicestoclientsonalargerscaleinproportiontootherprofessionalservicesprovided,asastand-aloneservice,(suchascreditbrokering,debtcollecting)andnotincidentaltotheprovisionoflegalservicesnorarisingoutof,orcomplementarytothatservice,shouldexpecttobeseparatelyandindependentlyauthorisedbytheFCAandexposedtoitsspecialistfinancialservicesregulatoryframework,ratherthanSRAregulation.Oneassumesthatalargerproportionofitsfeeincomearisesdirectlyfromthissourceandassuch,thisisvastlydifferenttoafirmwhomerelyoffersa‘payyourbillbyinstalments’optiontoaclient.Thosefirms,wereitnotforthefactthattheymayalsoofferlegalservicestootherclients,essentialmirrorafinancialinstitutionandshould,therefore,notexpecttobeexemptfromtheregulationthatappliesotherfinancialinstitutions.Itiswithinthosefirmsofferingdistinctandspecialistconsumercreditservicesthatthemorecomplexregulatoryissuesarelikelytoarise,requiringtheexperienceandexpertiseofaspecialistfinancialservicesregulator,ratherthanalegalservicesregulator.Inrelationtothesefirms,weagreethatthetworegulatoryframeworksoftheFCAandtheSRAarenotnecessarilyreconcilable.

SinceitwouldbeanonsensetoforceallfirmstoapplyforFCAauthorisationtoaccommodatethesefirms,wheninfactonlyamuchsmallerandnarrowernumberoffirmsneedthespecialismofafinancialservicesregulator,weagreethattheappropriateandproportionatesolutionistheprohibitionoftheconsumercreditactivities,assetoutintheconsultationdocumentation,fromregulationbytheSRAunderthePart20regimeandtherestrictionstopermittedconsumercreditactivities.

ThisapproachalsoallowstheSRAtofocusuponaproportionateapproachtotheregulationofthoseactivitiesthatDOfallwithinthePart20regime,fortheprotectionofconsumers.

Inourexperience,itwouldbeunusualforanyfirmundertakinganyoftheprohibitedorrestrictedactivities,withoutalreadyconductingbusiness,inanyevent,whichrequiresFCAauthorisationandsowedonotexpecttheretobeanysignificantregulatoryimpactoftheprohibitionsandrestrictions,savewithonepossibleexception.

ItwouldseemthattheenteringintoofaSearsToothAgreement(verycommoninfamilylawcases)betweenthefirmandtheclientwouldnotbeconsideredtofallwithinthecurrentrestrictions,unlessthecreditissecuredonlandbywayofalegalorequitablecharge.Whilstthenumberofsuchagreementsislikelytobelow,therequirementtobeauthorisedbytheFCAcouldadverselyimpactuponbothfirmsandtheirclients.Sincethelossoflegalaidinfamilycases,suchagreementshavebecomeacommonwayforaclienttoprocurelegalservices.



Question 2: What is the likely impact of these prohibitions and restrictions for firms and consumers

Wehave,inpart,dealtwiththisabove.Savefortheconcernsurroundingcreditagreementsinfamilycases,wedonotanticipateanysignificantimpactuponfirms.Wewouldenvisagetheregulatoryframeworkformostfirmswillnotchangefromthecurrentposition.Thosefirmsalreadyprovidingconsumercreditservicestoclientsancillaryandcomplementarytolegalserviceswillcontinuetodoso,undertheauspicesofSRAregulationthroughthePart20regime.Thosefirmsalreadyundertakingthespecialistanddistinctconsumercreditactivitiesnowhelpfullyandclearlylisted,shouldalreadybeFCAauthorisedand,iftheyarenot,theclarificationnowproposedbythecurrentproposalsshouldensurethattheynowattendtothisimmediately.

Consequently,andagainsaveforthesignificantconcerninfamilycases,wedonotenvisageanyotherdetrimenttoconsumersintermsofaccesstoeitherlegalservicesorconsumercreditservices.

Clientswhobenefitfromconsumercreditservicesancillarytotheirlegalproblemwill,nodoubt,becompletelyunaware(andrightlyso)ofanydistinctionbetweenalegalserviceandconsumercreditservice,andwillsimplyexperienceaseamlessend-to-endservicefromtheirsolicitor.ThoseclientswillthereforecontinuetohavetheprotectionaffordedthroughtheappropriateandproportionateregulationinvokedbythePart20regimeandthewiderregulatoryframeworktowhichtheirsolicitorissubject.

Clientswhoseekaspecialistconsumercreditservicefromtheirsolicitormay,likewise,beunawareofwhichregulatoryframeworkisgoverningthedeliveryoftheservicebyhissolicitor.Whatiscrucial,ofcourse,isthattheclientisgivenproperinformationattheoutsetaboutthisanddetailsoftowhomheorsheshouldcomplainintheeventofpoorservice.

Question 3: Should any of the prohibited activities be allowed, or the prohibitions/restrictions be modified?

No,saveforclarificationsurroundingcreditagreementsinfamilycases,asdiscussedabove.

Question 4: If so, do you believe that any additional consumer protections should be put in place to address any specific risks that these activities present?

GiventhataclientmusttakeindependentlegaladvicebeforesigningaSearsToothAgreement,wedonotbelievethatthesepresentanyspecificrisk(evenwherecreditissecuredonlandbylegalorequitablemortgage)thatarenotadequatelydealtwithwithintheoverallregulatoryframework,highstandardsofprofessionalism,thedutytoactintheclient’sbestinterestsandotherdutiesassetoutintheCodeofConduct.However,iftheSRAwishedtoprovideadditionalconsumerprotectioninthosecaseswheresecurityagainstlandisinvolvedinthecreditarrangement,itcouldbearequirementforthesolicitortoregisterallsuchagreementswiththeSRAimmediatelytheyareenteredinto,andnotificationtobegiventotheSRAoncethesecurityissatisfied.

Question 5: Do you have any comments on the requirements set out in our proposed amendments to the SRA Conduct of Business Rules?

Itisnotclearexactlywhatismeantby“appropriatelyassessclients’creditworthiness”andwhenitmaybenecessarytoapproachcreditreferenceagencies.Greaterclarityandguidancewillbeneededsothatfirmsknowpreciselywhatisexpectedofthem,withillustrativeexamplesofpractices/behavioursthattheSRAwouldconsiderabreachofthePrinciplesorOutcomes,astheyrelatetoconsumercreditactivities.Weareconcernedthatthishasthepotentialtobecomeburdensometosolepractitioners,particularlywhereintheeventofthepartiessubsequentlyagreeingtoincreasetheamountofcredit,theexerciseandcheckswouldneedtoberepeated.

Itremainstobeseenwhetherthisrequirementessentiallystillimpingessignificantlyupontheabilityoffirmstoallowtheirclientstomakedeferredpaymentarrangements.Wearemindfulthatagreementswillonlybeexemptwherethetotalnumberofrepaymentsislessthantwelve,madeoveraperiodoftwelvemonthsorlessandwithoutinterestorothercharges.AnyagreementoutsideofthosetermswouldstillrequirethefirmtocomplywiththeamendedConductofBusinessRulesandthereforestillundertakeassessmentsofcreditworthiness.

Otherthanthis,theproposedamendmentsappeartobecommensuratewiththeterminologyandobligationsotherwiseimposedonfinancialinstitutionsbytheFCAandseemtobeaproportionateapproachtoprotectingconsumers,withinthewidersettingofaprofessionregulatedtohighstandards.



Question 6: Do you have any views about our assessment of the impact of these changes and, are there any impacts, available data or evidence that we should consider in developing our impact assessment?

Wearesatisfiedthattheproposalsnolongerposeanyrisktosolepractitionersofbeingforcedoutofthemarketduetothecostofdualregulation,whichisalsopositivefromthewideraccesstojusticeconcerns.

Question 7: Can you provide any specific examples of benefits or risks linked to our proposed approach and/or particular aspects of our proposed arrangements?

Wehavenothingadditionaltoaddhere.

Hilary Underwood August 2015OnbehalfoftheSolePractitionersGroup

WWHAT ON EARTH IS AN HONORARY SECRETARY ANYWAY?!

JanisPurdy,whohadbeenpreviousHonorarySecretaryformanyyears,suddenlysteppedintothebreachasChairwomanandgaveme24hoursnoticeattheannualSPGConferenceinBuxtonthatIwasgoingtoreplaceherastheSPGHonorarySecretary.

Firstly,thepostappearstohavenotermdate,unliketheChairmanshipwhichonlylastsforoneyear.Itdoesnotevenhavealimitationperiodlikeaperpetuityperiod.Doesitevenextendtoalifeinbeingand21yearsandifsowhoselife?!

Thankfully,giventhelengthofoffice,thedutiesarenottooonerousespeciallynowthatHilaryisouremployedfull-timeCo-ordinatorandpreparestheagendaandminutesofmeetingsaspartofherrole.

WhatonearthisanHonorarySecretaryanyway?!Ididnotknow

myselfuntilabout10yearsagowhen

IthinkonecansaythatthemainbenefitsthatanHonorarySecretarycanprovidetotheGrouparetobeasupporttotheindividualchairmenandwomenwhocomefreshandenthusiastictotheirworkoneachannualappointment,butareworriedastohowtheirideasfittheoverallstrategicpositionoftheGroupandhowtheirideasareaffectedbytheconstitution.Asortofchairman’schurchwarden;acontinuityman;acrisismanager;aconstitutionaladviser;aonemanHouseofLords;evenanumpire.

There.Ajobdescriptionforanyaspiringcandidates!

Clive Sutton

Clive Sutton is Honorary Secretary of SPG, a post he has held for 10 years



RESPONSE OF THE SOLICITOR SOLE PRACTITIONERS GROUP TO THE LEGAL OMBUDSMAN CONSULTATION ON

THE PROPOSED ADR SCHEME RULESQuestion 1: Is the description of our approach, in section 1, to the application of the rule clear?

Yes,thedescriptionofyourapproachtotheapplicationoftheruleisclear,inthat:

a) theamendmenttoRule4.4isverystraightforward;

b)caseswheresufficientevidenceisavailableareverystraightforward;

c) incaseswhensufficientevidencewasnotavailable,wecanseehowyouwouldneedtoconsider“refusaltodeal”eitherduetothepassageoftime,orunderthenewrule5.7(d)becausedoingsowould“seriouslyimpairtheeffectiveoperationoftheLegalOmbudsmanscheme.”

Whatisnotsoclearishowthatrulemightbeappliedonanindividualcasebycasebasis,specifictothefactsofeachcase.

Fromapractitioner’sperspective,thetimelimitsasperthecurrentSchemeRulesprovidedagreatdealofcertaintyandclarityastowhenacomplaintwouldorwouldnotbeacceptedbytheLegalOmbudsman.Apractitioner’sviewofwhetherornotdealingwithadisputeoutsideofthosetimelimitswouldbefair,practicalandproportionatemaywellbeverydifferenttotheLegalOmbudsman.

Weaccept,however,thattheLegalOmbudsmandoeshaveconsiderableexperienceunderthecurrentSchemeRulesastowhetherornottoacceptcomplaintsaboutactsoromissionsthatfalloutsideofthecurrenttimelimits,dependingonthedateofawareness,andacceptsthatithasbeendoingsoeffectively.ThecasestudiesreferredtowithintheconsultationdocumentillustratethisandthisshouldprovidepractitionerswithsomecomfortthataproportionateandsensibleapproachhasbeentakenbytheLegalOmbudsmantodate.

Therewill,inevitably,besomefearamongstpractitionersthatthenewruleswillopenthefloodgatestohistoriccomplaintsthatwouldnototherwisehavebeenacceptedbytheLegalOmbudsman.Thatis,ofcourse,notthepurposeofthenewSchemeRulesanditisclearfromyourillustrativecasesthattheycouldnotbeusedbyacomplainantasameansofraisinganout-of-timecomplaintviathebackdoor,noranout-of-timenegligenceclaimworthmillionsofpounds,whichisstatute-barred,sinceweunderstandthatthereistobenochangetothemaximumawardof£50,000(pluscosts).

TherealityisthattheADRDirectiveandRegulations(whichdonotpermitADRentitiestooperateruleswhichallowthemtorefusetodealwithcasesbasedonthetimingoftheactoromission)havenowtakeneffectandprovidersoflegalservicesarestuckwiththem,regardlessofwhetherortheLegalOmbudsmanbecomescertifiedastheADRentityforcomplaintsaboutlegalservicesornot.

Webelievethatourmembers,whonowmustcomplywiththeADRDirectiveandRegulations,wouldprefertodealwithjustonebody,ratherthanhavingtocontinuetosignpostclientsnotonlytotheLegalOmbudsmanscheme(asrequiredbytheLegalServicesAct2007)butalsotoaseparatecertifiedADRentity.Tohavetodosowouldbeanadditionalburdenuponsolepractitioners.

Torespectfullycointhephrase“Betterthedevilyouknow”webelievethatourmemberswouldprefertodealwiththefamiliarbodyoftheLegalOmbudsmanratherthanaseparatecertifiedADRentity,whoseprocesses,resolutionsandcostingstructuresareanunknownquantitytotheprofession.Indeed,thoseseparateentitiesarelikelytobeconsiderablylessexperiencedindealingwiththeoftencomplexnatureofdisputesconcerningthedeliveryoflegalservicesandmaybelesscapableofproperlydiscerningwhenacomplaintshouldberefused

WewouldsaythatoneofthekeychallengesfortheLegalOmbudsmanwillbecommunicatingthisapproachtothelegalprofessioninordertoallaymisconceivedfearsandwehaveaddressedthisfurtherbelow.



Question 2: Do you foresee any difficulties in applying the approach in section 1?

WewonderwhetheritmaybedifficultfortheLegalOmbudsmantomaintainconsistencyamongstcaseworkersandinvestigatorsinapplyingtheapproachinsection1,giventhebreadthofinterpretationopentothewords“seriouslyimpairtheeffectiveoperationoftheLegalOmbudsmanscheme”inRule5.7(d).WewouldhopethatappropriatetrainingwillbeprovidedtoLegalOmbudsmanstaffbuttherewillalwaysbethepossibility,withinanon-prescriptivesystem,foroneindividualcaseworkertointerprettheruledifferentlytothenext.

Question 3: Should we explore specifying a period of time within b) i) beyond which the presumption should be that the investigation of the case would seriously impair the effective operation of the Scheme?

Asindicatedabove,practitionerswouldnodoubtprefersuchapresumptiontobeputintoplace.Thiswouldprovidepractitionerswithagreaterdegreeofcertainty,suchastheyhaveunderthecurrentscheme.

However,giventhattheADRRegulationsdonotpermitADRentitiestooperateruleswhichallowthemtorefusetodealwithcasesbasedonthetimingoftheactoromission,wequerywhethersuchapresumptionwouldbepermitted?

a) Ifsowhatshouldthatperiodoftimebe?

Ifsuchapresumptionwerepermitted,practitionerswouldnaturallywishthistomirrorthecurrentSchemeRules:

– Sixyearsfromtheact/omission;or

– Threeyearsfromwhenthecomplainantshouldreasonablyhaveknowntherewascauseforcomplaint.

However,giventhemuchwiderapproachoftheADRRegulationstocases,aperiodof:

– Eightyearsfromtheact/omission;or – Fouryearsfromwhenthecomplainantshouldreasonablyhaveknowntherewascauseforcomplaintmaybeconsidered

moreappropriate.

Question 4: Or do you consider that no time period should be set because the issues would be case specific?

Practitionerswouldpreferthecertaintyofasettimeperiodratherthanacasespecificapproach.Itisextremelyunsettlingforpractitionerstoknowthatacomplaintcouldariseatanytime,fromanycasetheyhavedealtwithatanytimeduringthelifeoftheirfirm.

Otherwise,itisfeasiblethattheLegalOmbudsmanmayconsiderthatsufficientevidenceisavailable(fromdocumentsproducedbythecomplainant)andproceedtoacceptthecomplaint,despiteitshistoricnature.Theensuinginvestigationofthatcomplaintmaythenprovetobeextremelycostlytothepractitionerwhere,duetothepassageoftime,memoryofthecasehasfaded,feeearnersmayhaveleftthepractice,filesmayhavebeendestroyedetc.Acasespecificapproachisthereforefarmoreriskyanddisadvantageousforapractitionerthanasettimeperiodbeyondwhichthepresumptionwouldapply.Thisis,however,wherethenewrule5.7(d)couldpotentiallyassist.

Question 5: Do you consider it would be reasonable to use the new rule 5.7(d) to refuse to deal with complaints about acts or omissions that took place so long ago that a fair practical and proportionate investigation can no longer be conducted and safe conclusions cannot be reached at all, or without unreasonable or disproportionate commitment of time or resources?

Yes,weconsiderthatthenewrule5.7(d)shouldbeusedinthisway.

a) Ifnothowdoyouthinkweshoulddealwiththesecomplaints?

Question 6: Is the description of our proposed approach, in section 2, clear?

Yes.




ThemaindifficultythatwecanforeseeisthattheLegalOmbudsmanwillonlyhavethreeweeks,fromreceiptofthecompletecomplaintfile,todecidewhethertoacceptorrefusethecomplaintandnotifythepartiesaccordingly.ThiscouldbearealchallengefortheLegalOmbudsman,particularlyifthecaseiscomplex/historic.

Whilstwecanseethat,onthewhole,theADRRegulationsfitintotheexistingLegalOmbudsmanSchemeRules,thereductionofthefourteengroundsfordismissalordiscontinuancecurrentlysetoutintheSchemeRulesdowntojustfourgrounds,containedinRule5.7(a)–(d)doescreateonesignificantpotentialinjusticeforpractitioners.

ThisisillustratedbestbyyourCaseExample3intheConsultationDocument.ThisrelatestotheremovalofRule5.7(c)FairandReasonableRedress,whichisratherbizarrelynotincludedinanyshapeorformintheADRRegulationsandsowouldnotbepermittedunderthenewSchemeRules.ItisbizarrethattheADRRegulationsmakeprovisionforrefusaltodealwithadisputeifthecomplainantdidnotattempttocontactthetraderconcernedinordertodiscussthecomplaintandseektoresolvethisdirectlywiththetraderbutDONOTmakeprovisionforrefusaltodealifthetraderhasalreadyofferedfairandreasonableredressinrelationtothecomplaintandtheofferisstillopenforacceptance.

WerealisethatthisashortfallintheADRRegulations(whichoddlyappearstorequireconsumerstoapproachthetraderfirst,butnotnecessarilygiveseriousconsiderationtoanyofferofredressandmovefullsteamaheadtotheADRentity)andnotashortfallintheLegalOmbudsmanSchemeRules.

However,therealitywillbethattheLegalOmbudsmanwillnolongerbeabledismissordiscontinueacomplaintwhereapractitionerhas,infact,alreadyofferedfairandreasonableredresstotheclientatfirsttier.Instead,alltheLegalOmbudsmancandointhosecircumstancesisacceptthecomplaintandseektoencourageaninformalresolutionbyexplainingtotheclientthattheremedyisfairandreasonable.Ultimately,iftheclientstilldoesnotaccepttheinformalresolution,theLegalOmbudsmanwouldhavetoinvestigateandmakeaformalombudsmandecisionconfirmingthesameoffer.

Whilsttheoutcomefortheclientisthesameandtheendresult(intermsoftheredress)isthesame,theprocesswillhavehadasignificantimpactuponthepractitionerwhichisgrosslyunfair.Thepractitionerwillnowhavetodeclarethistohis/herinsurersanduponhis/herPIIapplicationformsformanyyearstocome.NotonlythisheorshewillalsohavetodeclarethistotheSRAonFormRF1PCRenewalstageformanyyearstocome,whichcouldinturnimpactupontheSRA’srisk/supervisionassessmentofthefirm.Thisisaparticularconcernforsolepractitionerandsmallfirms.

ItiscruciallyimportantthatboththeSRAandthePIIindustryunderstandthissignificantdevelopment,iftheLegalOmbudsmandoesgoontobecomeacertifiedADRentity.Itisvitalthatthesetypesofcasesbedistinguishedontheforms(whicharecurrentlysimplistictick-boxformatsandwouldnotaccommodatesuchadistinctionintheircurrentformat)fromthosecaseswheretheLegalOmbudsmanhasmadeaformalombudsmandecisionbecausethefirmdidnotofferappropriateredressatfirsttier.

Question 8: As set out above, the ADR Regulations allow ADR entities to refuse to deal with disputes that do not meet a pre-determined minimum and maximum monetary threshold. Should we explore having prescribed monetary thresholds for the value of claims?

Apre-determinedminimumandmaximummonetarythresholdwouldfurtherassistinbringingsomeclarityandcertaintyintothisarena,whichpractitionerswouldappreciate.Thismayalsoassistinensuringtheefficientuseoffundsforinvestigationonlyofthosecomplaintswherethepotentiallossisofsuchsignificanceastojustifythecostsoftheprocess.

Itmaybedifficult,however,fortheLegalOmbudsmantoquicklyassimilatethosethresholdsagainstacasewhichhasnoobviousmonetaryelementtoitandinvolvesonlyacomplaint,forexample,ofdelay,poorservice,poorcommunication–bearinginmindthattheLegalOmbudsmanwillhaveonlythreeweeksfromreceiptofthefullcomplaintfiletomakethedecisionastowhethertorefusetodealwiththecaseornot.

a) Ifso,whatshouldthethresholdsbe?

SincewedonotbelievethereisanyproposaltoincreasethelimitationsontheLegalOmbudsman’scurrentmaximumaward,wewouldsaythatthemaximummonetarythresholdshouldbe£100,000(£50,000beingthemaximumthatcanbeawardedbutbearinginmindthatthedetrimentcanbesplitbetweenthesolicitorandthebarrister,witha£50,000awardmadeagainsteachone).

Theminimummonetarythresholdshouldbe£50.



b) Howshouldweidentifyandverifytheamount?

Thisisfraughtwithpotentialdifficulties,asindicatedabove,particularlyinathreeweektimescale.Wewouldhavethoughtthatamatrix,basedupontheLegalOmbudsman’sextensiveexperienceofpreviousawardswouldbehelpful,akintoamatrixofthequantumofpersonalinjurydamagessimilartoKemp.LegalOmbudsmanstaffwillneedtobeabletoidentifytheamountsconcernedquickly.

Earlyconversationswithbothcomplainantandpractitionerwillbeessentialinordertograspandnarrowdowntheissuesbuttherewillbenosubstituteforexpertiseandexperiencegainedinthefieldofcomplaintshandlingtodate.

Question 9: Do you have any other views on our proposed new sub section of chapter 4?

No–thiswouldappeartobeasensiblewayofdealingwithexistingrules5.7(g,h,I,landm)

Question 10: Are there any other grounds which you feel should be in the new subsection “complaints not covered”?

No,saveforouranswertoQuestion7above–isitnotpossibleforrule5.7(c)tobecomepartofthenewsubsection?

Question 11: Are the consequential amendments clear?

Yes

Question 12: Are there any further amendments you think we require?

No

Question 13: Do you have any comments or observations related to this consultation which you would like the OLC to consider?

WehaveassumedthatthecasefeespayablebypractitionerswouldnotchangeunderthenewSchemeRulesbutwouldbegratefulforclarificationofthis.

Weareextremelyconcernedabouttherather‘messy’interimperiodbetween1stOctober2015–1stApril2016duringwhichpractitionerswillberequiredtosignpostclientswhomakeacomplaintagainstthefirmtoboththeLegalOmbudsmanaswellastoaseparatecertifiedADRentity.WewouldbeconcernedaboutanydelaysintheapplicationprocesstotheLSBandwouldhopethat1stApril2016wouldbethelatestdatebywhichtheLegalOmbudsmanschemewillbecertifiedastheADRentityforcomplaintsaboutlegalservices.

ItiscruciallyimportantthattheviewsofthePIIindustryaresought,sincethepotentialimpactoftheADRRegulationscouldfeasiblybeariseincomplaints,someofwhichcouldbehistoric.ThismayinturnimpactupontheriskprocessesandproceduresthatPIinsurerswouldwishtoseefirmsundertaking,particularlywithrespecttoarchivedfilesetc.

SPGwasalsopleasedtobeabletocontributetotheroundtablediscussionheldon23rdSeptember2015,alongsideotherregulators,professionalsandconsumergroups.OneofthepointsweraisedatthatdiscussionwastheneedfortheLegalOmbudsmantocommunicatethesechangesmoreeffectively,inordertodilutesomeoftheinaccuraciesinthelegalpresssurroundingtheseRegulations,whichhasledtomisguidedfearsamongsttheprofession.Forexample,themessagethatthelimitationonawardshasnotbeenclear,northemessagethattheprocessesoftheLegalOmbudsmanwillnotchange.Similarly,thatthereisnochangeintheapproachwithrespecttonegligenceclaims.WesuggestedlunchtimewebinarswithQ&Asessionstobeveryeffective(suchasthosehostedbytheSRA),andofferedthesupportofSPGincommunicatingyourmessagetoourmembershipthroughourSOLOJournal,emailcommunicationsandlocal/regionalevents.Wereiteratethatofferagainhere.



RESPONSE OF THE SOLICITOR SOLE PRACTITIONERS GROUP TO THE LEGAL OMBUDSMAN CONSULTATION ON THE

PROPOSED ADR SCHEME RULESQuestion 1: Is the description of our approach, in section 1, to the application of the rule clear?

Yes,thedescriptionofyourapproachtotheapplicationoftheruleisclear,inthat:

a) theamendmenttoRule4.4isverystraightforward;

b) caseswheresufficientevidenceisavailableareverystraightforward;

c) incaseswhensufficientevidencewasnotavailable,wecanseehowyouwouldneedtoconsider“refusaltodeal”eitherduetothepassageoftime,orunderthenewrule5.7(d)becausedoingsowould“seriouslyimpairtheeffectiveoperationoftheLegalOmbudsmanscheme.”

Whatisnotsoclearishowthatrulemightbeappliedonanindividualcasebycasebasis,specifictothefactsofeachcase.

Fromapractitioner’sperspective,thetimelimitsasperthecurrentSchemeRulesprovidedagreatdealofcertaintyandclarityastowhenacomplaintwouldorwouldnotbeacceptedbytheLegalOmbudsman.Apractitioner’sviewofwhetherornotdealingwithadisputeoutsideofthosetimelimitswouldbefair,practicalandproportionatemaywellbeverydifferenttotheLegalOmbudsman.

Weaccept,however,thattheLegalOmbudsmandoeshaveconsiderableexperienceunderthecurrentSchemeRulesastowhetherornottoacceptcomplaintsaboutactsoromissionsthatfalloutsideofthecurrenttimelimits,dependingonthedateofawareness,andacceptsthatithasbeendoingsoeffectively.ThecasestudiesreferredtowithintheconsultationdocumentillustratethisandthisshouldprovidepractitionerswithsomecomfortthataproportionateandsensibleapproachhasbeentakenbytheLegalOmbudsmantodate.

Therewill,inevitably,besomefearamongstpractitionersthatthenewruleswillopenthefloodgatestohistoriccomplaintsthatwouldnototherwisehavebeenacceptedbytheLegalOmbudsman.Thatis,ofcourse,notthepurposeofthenewSchemeRulesanditisclearfromyourillustrativecasesthattheycouldnotbeusedbyacomplainantasameansofraisinganout-of-timecomplaintviathebackdoor,noranout-of-timenegligenceclaimworthmillionsofpounds,whichisstatute-barred,sinceweunderstandthatthereistobenochangetothemaximumawardof£50,000(pluscosts).

TherealityisthattheADRDirectiveandRegulations(whichdonotpermitADRentitiestooperateruleswhichallowthemtorefusetodealwithcasesbasedonthetimingoftheactoromission)havenowtakeneffectandprovidersoflegalservicesarestuckwiththem,regardlessofwhetherortheLegalOmbudsmanbecomescertifiedastheADRentityforcomplaintsaboutlegalservicesornot.

Webelievethatourmembers,whonowmustcomplywiththeADRDirectiveandRegulations,wouldprefertodealwithjustonebody,ratherthanhavingtocontinuetosignpostclientsnotonlytotheLegalOmbudsmanscheme(asrequiredbytheLegalServicesAct2007)butalsotoaseparatecertifiedADRentity.Tohavetodosowouldbeanadditionalburdenuponsolepractitioners.

Torespectfullycointhephrase“Betterthedevilyouknow”webelievethatourmemberswouldprefertodealwiththefamiliarbodyoftheLegalOmbudsmanratherthanaseparatecertifiedADRentity,whoseprocesses,resolutionsandcostingstructuresareanunknownquantitytotheprofession.Indeed,thoseseparateentitiesarelikelytobeconsiderablylessexperiencedindealingwiththeoftencomplexnatureofdisputesconcerningthedeliveryoflegalservicesandmaybelesscapableofproperlydiscerningwhenacomplaintshouldberefused

WewouldsaythatoneofthekeychallengesfortheLegalOmbudsmanwillbecommunicatingthisapproachtothelegalprofessioninordertoallaymisconceivedfearsandwehaveaddressedthisfurtherbelow.




WewonderwhetheritmaybedifficultfortheLegalOmbudsmantomaintainconsistencyamongstcaseworkersandinvestigatorsinapplyingtheapproachinsection1,giventhebreadthofinterpretationopentothewords“seriouslyimpairtheeffectiveoperationoftheLegalOmbudsmanscheme”inRule5.7(d).WewouldhopethatappropriatetrainingwillbeprovidedtoLegalOmbudsmanstaffbuttherewillalwaysbethepossibility,withinanon-prescriptivesystem,foroneindividualcaseworkertointerprettheruledifferentlytothenext.

Question 3: Should we explore specifying a period of time within b) i) beyond which the presumption should be that the investigation of the case would seriously impair the effective operation of the Scheme?

Asindicatedabove,practitionerswouldnodoubtprefersuchapresumptiontobeputintoplace.Thiswouldprovidepractitionerswithagreaterdegreeofcertainty,suchastheyhaveunderthecurrentscheme.

However,giventhattheADRRegulationsdonotpermitADRentitiestooperateruleswhichallowthemtorefusetodealwithcasesbasedonthetimingoftheactoromission,wequerywhethersuchapresumptionwouldbepermitted?

a)Ifsowhatshouldthatperiodoftimebe?

Ifsuchapresumptionwerepermitted,practitionerswouldnaturallywishthistomirrorthecurrentSchemeRules:

– Sixyearsfromtheact/omission;or

– Threeyearsfromwhenthecomplainantshouldreasonablyhaveknowntherewascauseforcomplaint.

However,giventhemuchwiderapproachoftheADRRegulationstocases,aperiodof:

– Eightyearsfromtheact/omission;or

– Fouryearsfromwhenthecomplainantshouldreasonablyhaveknowntherewascauseforcomplaintmaybeconsideredmoreappropriate.

Question 4: Or do you consider that no time period should be set because the issues would be case specific?

Practitionerswouldpreferthecertaintyofasettimeperiodratherthanacasespecificapproach.Itisextremelyunsettlingforpractitionerstoknowthatacomplaintcouldariseatanytime,fromanycasetheyhavedealtwithatanytimeduringthelifeoftheirfirm.

Otherwise,itisfeasiblethattheLegalOmbudsmanmayconsiderthatsufficientevidenceisavailable(fromdocumentsproducedbythecomplainant)andproceedtoacceptthecomplaint,despiteitshistoricnature.Theensuinginvestigationofthatcomplaintmaythenprovetobeextremelycostlytothepractitionerwhere,duetothepassageoftime,memoryofthecasehasfaded,feeearnersmayhaveleftthepractice,filesmayhavebeendestroyedetc.Acasespecificapproachisthereforefarmoreriskyanddisadvantageousforapractitionerthanasettimeperiodbeyondwhichthepresumptionwouldapply.Thisis,however,wherethenewrule5.7(d)couldpotentiallyassist.

Question 5: Do you consider it would be reasonable to use the new rule 5.7(d) to refuse to deal with complaints about acts or omissions that took place so long ago that a fair practical and proportionate investigation can no longer be conducted and safe conclusions cannot be reached at all, or without unreasonable or disproportionate commitment of time or resources?

Yes,weconsiderthatthenewrule5.7(d)shouldbeusedinthisway.

a) Ifnothowdoyouthinkweshoulddealwiththesecomplaints?

Question 6: Is the description of our proposed approach, in section 2, clear?

Yes.




ThemaindifficultythatwecanforeseeisthattheLegalOmbudsmanwillonlyhavethreeweeks,fromreceiptofthecompletecomplaintfile,todecidewhethertoacceptorrefusethecomplaintandnotifythepartiesaccordingly.ThiscouldbearealchallengefortheLegalOmbudsman,particularlyifthecaseiscomplex/historic.

Whilstwecanseethat,onthewhole,theADRRegulationsfitintotheexistingLegalOmbudsmanSchemeRules,thereductionofthefourteengroundsfordismissalordiscontinuancecurrentlysetoutintheSchemeRulesdowntojustfourgrounds,containedinRule5.7(a)–(d)doescreateonesignificantpotentialinjusticeforpractitioners.

ThisisillustratedbestbyyourCaseExample3intheConsultationDocument.ThisrelatestotheremovalofRule5.7(c)FairandReasonableRedress,whichisratherbizarrelynotincludedinanyshapeorformintheADRRegulationsandsowouldnotbepermittedunderthenewSchemeRules.ItisbizarrethattheADRRegulationsmakeprovisionforrefusaltodealwithadisputeifthecomplainantdidnotattempttocontactthetraderconcernedinordertodiscussthecomplaintandseektoresolvethisdirectlywiththetraderbutDONOTmakeprovisionforrefusaltodealifthetraderhasalreadyofferedfairandreasonableredressinrelationtothecomplaintandtheofferisstillopenforacceptance.

WerealisethatthisashortfallintheADRRegulations(whichoddlyappearstorequireconsumerstoapproachthetraderfirst,butnotnecessarilygiveseriousconsiderationtoanyofferofredressandmovefullsteamaheadtotheADRentity)andnotashortfallintheLegalOmbudsmanSchemeRules.

However,therealitywillbethattheLegalOmbudsmanwillnolongerbeabledismissordiscontinueacomplaintwhereapractitionerhas,infact,alreadyofferedfairandreasonableredresstotheclientatfirsttier.Instead,alltheLegalOmbudsmancandointhosecircumstancesisacceptthecomplaintandseektoencourageaninformalresolutionbyexplainingtotheclientthattheremedyisfairandreasonable.Ultimately,iftheclientstilldoesnotaccepttheinformalresolution,theLegalOmbudsmanwouldhavetoinvestigateandmakeaformalombudsmandecisionconfirmingthesameoffer.

Whilsttheoutcomefortheclientisthesameandtheendresult(intermsoftheredress)isthesame,theprocesswillhavehadasignificantimpactuponthepractitionerwhichisgrosslyunfair.Thepractitionerwillnowhavetodeclarethistohis/herinsurersanduponhis/herPIIapplicationformsformanyyearstocome.NotonlythisheorshewillalsohavetodeclarethistotheSRAonFormRF1PCRenewalstageformanyyearstocome,whichcouldinturnimpactupontheSRA’srisk/supervisionassessmentofthefirm.Thisisaparticularconcernforsolepractitionerandsmallfirms.

ItiscruciallyimportantthatboththeSRAandthePIIindustryunderstandthissignificantdevelopment,iftheLegalOmbudsmandoesgoontobecomeacertifiedADRentity.Itisvitalthatthesetypesofcasesbedistinguishedontheforms(whicharecurrentlysimplistictick-boxformatsandwouldnotaccommodatesuchadistinctionintheircurrentformat)fromthosecaseswheretheLegalOmbudsmanhasmadeaformalombudsmandecisionbecausethefirmdidnotofferappropriateredressatfirsttier.

Question8:Assetoutabove,theADRRegulationsallowADRentitiestorefusetodealwithdisputesthatdonotmeetapre-determinedminimumandmaximummonetarythreshold.Shouldweexplorehavingprescribedmonetarythresholdsforthevalueofclaims?

Apre-determinedminimumandmaximummonetarythresholdwouldfurtherassistinbringingsomeclarityandcertaintyintothisarena,whichpractitionerswouldappreciate.Thismayalsoassistinensuringtheefficientuseoffundsforinvestigationonlyofthosecomplaintswherethepotentiallossisofsuchsignificanceastojustifythecostsoftheprocess.

Itmaybedifficult,however,fortheLegalOmbudsmantoquicklyassimilatethosethresholdsagainstacasewhichhasnoobviousmonetaryelementtoitandinvolvesonlyacomplaint,forexample,ofdelay,poorservice,poorcommunication–bearinginmindthattheLegalOmbudsmanwillhaveonlythreeweeksfromreceiptofthefullcomplaintfiletomakethedecisionastowhethertorefusetodealwiththecaseornot.

a) Ifso,whatshouldthethresholdsbe?

SincewedonotbelievethereisanyproposaltoincreasethelimitationsontheLegalOmbudsman’scurrentmaximumaward,wewouldsaythatthemaximummonetarythresholdshouldbe£100,000(£50,000beingthemaximumthatcanbeawardedbutbearinginmindthatthedetrimentcanbesplitbetweenthesolicitorandthebarrister,witha£50,000awardmadeagainsteachone).

Theminimummonetarythresholdshouldbe£50.



b) Howshouldweidentifyandverifytheamount?

Thisisfraughtwithpotentialdifficulties,asindicatedabove,particularlyinathreeweektimescale.Wewouldhavethoughtthatamatrix,basedupontheLegalOmbudsman’sextensiveexperienceofpreviousawardswouldbehelpful,akintoamatrixofthequantumofpersonalinjurydamagessimilartoKemp.LegalOmbudsmanstaffwillneedtobeabletoidentifytheamountsconcernedquickly.

Earlyconversationswithbothcomplainantandpractitionerwillbeessentialinordertograspandnarrowdowntheissuesbuttherewillbenosubstituteforexpertiseandexperiencegainedinthefieldofcomplaintshandlingtodate.

Question 9: Do you have any other views on our proposed new sub section of chapter 4?

No–thiswouldappeartobeasensiblewayofdealingwithexistingrules5.7(g,h,I,landm)

Question 10: Are there any other grounds which you feel should be in the new subsection “complaints not covered”?

No,saveforouranswertoQuestion7above–isitnotpossibleforrule5.7(c)tobecomepartofthenewsubsection?

Question 11: Are the consequential amendments clear?

Yes

Question 12: Are there any further amendments you think we require?

No

Question 13: Do you have any comments or observations related to this consultation which you would like the OLC to consider?

WehaveassumedthatthecasefeespayablebypractitionerswouldnotchangeunderthenewSchemeRulesbutwouldbegratefulforclarificationofthis.

Weareextremelyconcernedabouttherather‘messy’interimperiodbetween1stOctober2015–1stApril2016duringwhichpractitionerswillberequiredtosignpostclientswhomakeacomplaintagainstthefirmtoboththeLegalOmbudsmanaswellastoaseparatecertifiedADRentity.WewouldbeconcernedaboutanydelaysintheapplicationprocesstotheLSBandwouldhopethat1stApril2016wouldbethelatestdatebywhichtheLegalOmbudsmanschemewillbecertifiedastheADRentityforcomplaintsaboutlegalservices.

ItiscruciallyimportantthattheviewsofthePIIindustryaresought,sincethepotentialimpactoftheADRRegulationscouldfeasiblybeariseincomplaints,someofwhichcouldbehistoric.ThismayinturnimpactupontheriskprocessesandproceduresthatPIinsurerswouldwishtoseefirmsundertaking,particularlywithrespecttoarchivedfilesetc.

SPGwasalsopleasedtobeabletocontributetotheroundtablediscussionheldon23rdSeptember2015,alongsideotherregulators,professionalsandconsumergroups.OneofthepointsweraisedatthatdiscussionwastheneedfortheLegalOmbudsmantocommunicatethesechangesmoreeffectively,inordertodilutesomeoftheinaccuraciesinthelegalpresssurroundingtheseRegulations,whichhasledtomisguidedfearsamongsttheprofession.Forexample,themessagethatthelimitationonawardshasnotbeenclear,northemessagethattheprocessesoftheLegalOmbudsmanwillnotchange.Similarly,thatthereisnochangeintheapproachwithrespecttonegligenceclaims.WesuggestedlunchtimewebinarswithQ&Asessionstobeveryeffective(suchasthosehostedbytheSRA),andofferedthesupportofSPGincommunicatingyourmessagetoourmembershipthroughourSOLOJournal,emailcommunicationsandlocal/regionalevents.Wereiteratethatofferagainhere.

Hilary Underwood SPG Co-ordinatorOnbehalfoftheSolePractitionersGroup30thOctober2015




14606/02/14

GROWING FROM STRENGTH TO STRENGTH...

Prime Professions are now a fully integrated part of the Willis Group, one of the largest insurance and reinsurance brokers in the world.

Committed to client service and cost e�ective solutions the team now have the added benefits of Willis’ global resources and market influence.

PROFESSIONALINDEMNITY

To find out more contact :

Richard Brown [email protected] 020 3193 9442

Helen [email protected] 3193 9408

Scott Thorne [email protected] 020 3193 9407

Kate [email protected] 282 2971

www.willisfinexglobal.com/sole.html

14606_A4 SOLO Advert.indd 1 28/02/2014 17:15:53013-Solo - Autumn 2015 NEW.indd 88 19/01/2016 16:32

solo the journal winter 2015/2016 - spg – the sole...

Documents