“Worldwide Review of the Profession”

Competition & Regulatory Developments

ALAN HUNTER

The Profession in Northern Ireland

2,200 solicitors serving a population of 1.7 million

500 firms 50% of which are sole practitioners

Less than 30% of solicitors practice in firms of five or more partners

Firms have a wide geographical spread based in over 74 locations, including many small towns

The profession reflects the general practice model, solicitors advising and representing clients on family law, conveyancing, insolvency, commercial, probate and criminal law.

Recent years have seen increasing specialisation with some firms specialising in criminal and commercial law.

The Bain Review of Legal Services

The Bain Review was established to bring forward proposals for the regulation of legal services that are consistent with;

– Promoting consumer interests – Promoting competition – Promoting public understanding of citizen’s rights– Encouraging a strong independent legal profession

The Review Group carried out a consultation exercise and held a series of meetings throughout Northern Ireland.

Since the Group published their finding in 2006, the Society has been engaging with the Northern Ireland Assembly in bringing forward legislation to implement the Bain proposals.

Under the Bain Proposals

The Law Society will continue to discharge its regulatory function subject to;

- increased lay involvement; and

- the oversight of a Legal Services Oversight Commissioner

Responsibility for service complaints handling to remain with the Society subject to;

- all complaints committees having a lay majority

- Law Society’s Client Complaints Committee being functionally separate from the Law Society Council

- lay persons to be appointed under open and transparent competition on merit

- eligibility to make a complaint being extended to anyone

Bain Proposals cont’d

The office of the Legal Service Oversight Commissioner (LSOC) is to be established, this will be an individual supported by a small staff and funded by the legal professions.

The powers of the LSOC to include;

- the power to audit individual complaint files

- the power to monitor and set targets on performance standards for the new Client Complaints Department

- the power to establish an action plan for the promotion of the complaints handling system

- the power to offer advice on other regulatory functions and refer a matter to Government for appropriate consideration

The Northern Irish Approach

The Bain recommendations reflect a uniquely Northern Irish approach.

Specific regard has been had to the distinct characteristics of the jurisdiction including;

-the need to ensure transparency in the independence of the profession

- the need to ensure a proportionate approach to regulation in a relatively small jurisdiction

- the lack of the typical regulatory maze as existed in other jurisdictions

- a history of strong professional regulation provided by the Law Society as evidenced through initiatives such as the Home Charter Scheme

- a relatively small number of complaints

- the absence of any real fundamental dissatisfaction with the regulation provided by the Society

The new Client Complaints Department

The Client Complaints Department will be functionally separate from the Law Society Council

The Secretary will act as a filter for vexatious complaints, complaints without merit and complaints from complainants who have not exhausted the internal complaints mechanism within the solicitor’s firm.

Client Complaints Procedures

Complaints may be dealt with either informally or formally.

On receipt of a complaint the case worker will attempt to resolve the complaint informally proposing a resolution for the parties to agree to.

Where the case worker is unable to resolve the case informally it will be referred to the Client Complaints Committee for a determination. The Client Complaints Committee will hold inquisitorial proceedings reviewing the complaint with reference to all materials provided by the parties.

The Client Complaints Committee may award up to £3,500 in compensation for poor service and £3,500 for negligence, in cases involving both negligence and poor service an award of up to £7,000 may be made.

An appeals procedure and procedure to deal with default will be in place.

Professional Ethics and Guidance

The Society will maintain responsibility for the establishment of regulatory standards.

Where conduct issues arise in the deliberation of a service complaint the Client Complaints Committee will be able to seek guidance from the Society’s Regulatory Committee and may refer a solicitor to the Regulatory Committee for it to consider further action.

Reform in other jurisdictions

Reform to the regulation of legal services has occurred throughout other jurisdictions.

The Legal Services Act 2007 introduced wide ranging reforms to the system of regulation in England and Wales.

The Legal Profession and Legal Aid (Scotland) Act 2008 introduces similar wide ranging reforms in Scotland

In the Republic of Ireland the Legal Services Ombudsman Bill 2008 was introduced to the Oireachtas in March 2008 and is currently at Second Stage.

Regulatory Oversight

Reform across the jurisdictions has seen the establishment of more separate and distinct regulatory bodies.

In England and Wales a single regulatory body the Legal Services Board with responsibility for overseeing key regulators such as the Law Society has been established. The Board will approve professional rules and may direct changes to them. The Board may also direct approved regulators to take a particular action, and apply sanctions if they do not do so.

In Scotland the Legal Complaints Commission an independent body with responsibility for handling service complaints and overseeing how the Law Society and other professional bodies handles conduct matters has been established.

In the Republic of Ireland the Legal Services Ombudsman Bill proposes the establishment of the independent office of the Legal Services Ombudsman with responsibility for overseeing complaints handling and regulation provided by the Law Society and Bar Council.

Lay Involvement

In all jurisdictions enhanced lay involvement has been a key feature of reform.

In Scotland the new Complaints Commission will have a lay Chair and lay majority, there will also be enhanced lay representation on the Solicitors Disciplinary Tribunal.

In England and Wales the Legal Services Board is to have a lay chair with a lay majority. The Chief Ombudsman of the Ombudsman for Legal Complaints Office, the office responsible for handling complaints against legal professionals must be lay.

In the Republic of Ireland the Legal Services Ombudsman must also be a lay person.

Issues

Issues which must be given due consideration in reforming the regulatory regime of legal services include;

- Maintaining the independence of the profession

- Alternative Business Structures – regulatory arrangements

- Proportionality

- Costs

- Interface with insurers