News blogs

It all goes very quiet at the SRA board meetings when the subject of interventions comes up. Director Richard Collins updated the situation yesterday with the solemnity of a radio announcer reading out the names of kittens who have died that day.

In short, this year has been the game-changer the regulators have feared since the economy crashed. Now the banks have woken up to the uncertainty in the legal market, firms are starting to implode – with dire consequences for those firms with their heads still above water.

Law firms are no ordinary businesses. They’re keepers of valuable documents that can’t be thrown into a skip with the fax machine. The SRA has to do something to protect clients. The only question is what?

We all like to bash the SRA, but realistically it’s in a desperate position here.

The figures are stark: the SRA is expected to be saddled with £7m extra costs this year through interventions. This is not even the worst-case scenario – if a firm the size of Cobbetts needs help, we can expect that figure to double.

Clearly, doing nothing is not an option. Someone has to find new homes for live files and securely destroy those that have closed. There is room for reform here, with the regulator currently obliged to keep files for up to seven years even if, as in one recent case, they were already 20 years old.

One possibility is a one-off levy against firms to cover the 2013 deficit. On my rough calculations that would mean each firm paying roughly £700 towards helping the SRA clear up others’ mess. I can just imagine the reaction from practitioners about that.

And anyway, these kind of one-off levies are merely a sticking plaster. Collins himself predicted that 2014 looks like being no better for the legal profession, so would there need to be another cash call next year?

The SRA’s answer is to shift responsibility to the compensation fund, where there is room to manoeuvre and cover the excess costs. The change is subject to a six-week consultation period, but this has ‘done deal’ written all over it.

This may be the best option, but it feels instinctively wrong. The Compensation Fund is designed to protect clients, to pay them back when a dodgy solicitor has run off with their money.

Interventions are similarly intended to protect the consumer, but this will look to the public like law firms being bailed out with money allocated for their clients. Robbing Peter to pay Peter’s financially unstable solicitor, if you like.

As a short-term measure, we can hold our nose and let it through, but there are long-term questions to address. Should firms be compelled to reveal their financial troubles earlier, giving the SRA more scope for non-intervention action?

Will the SRA look again at the costs of intervention agents, which outweigh the costs of file archiving? It should be incumbent on the regulator to explain what value for money this arrangement is providing.

And ultimately, what sanctions are in place to make sure those responsible for a firm’s failure cannot escape with their pockets full? The first cash call in future must be on managing partners, not the compensation fund - and if they will not contribute to the costs of interventions, they should not be allowed to practise.

John Hyde is a Gazette reporter

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On 18 September 2014 two sets of nationalists – Scots and UK respectively – will be hoping their supporters vote in large numbers.

Personally I think they’ll both struggle with turnout – given what’s at stake, these campaigns are oddly technocratic. The ‘yes’ campaign, perhaps intending not to scare off undecided voters by playing a fervent nationalist stereotype, stresses how little would change in an independent Scotland.

The ‘no’ campaign, seemingly wary that in a straight fight it might struggle to match the misty eyed-or-mountain romantic appeal of the ‘to be a nation again’ vibe, isn’t really invoking the idea of a country either. Instead, the campaign prefers to rely on negative scare stories – focusing in particular on ‘national security’-type issues.

As nation-based bust-ups go, this is hardly 1776.

Both sides might get closer to a campaign to be proud of with a focus on legal issues.

Thinking back, devolution was still pretty young at the time of the Lockerbie trial – at the time the legal community in Scotland successfully projected their huge pride that the trial had been held abroad under Scottish law and had stood up well to the international scrutiny that entailed.

The ability to project national prestige is surely a defining feature of a nation.

And I notice first minister Alex Salmond spent some time last year promoting Scotland as an arbitration and dispute resolution centre, though it doesn’t seem to feature in his yes campaign. That’s a shame – Scottish banking has a mixed rep now, but not so its advocates and courts.

For either campaign, surely this far into devolution, the huge body of Scotland-only laws to have come out of Holyrood should be some kind of battle ground?

These laws have affected people’s lives in palpable ways – they are real in a way that ethereal fears around the future of Nato membership are not. So has separate law-making been just great, or a chance for second-rate law makers to ‘go rogue’?

At a formal lawyers’ dinner I attended in Edinburgh a few years back, the after-dinner speaker was not the customary comedian/raconteur, but one of the sheriffs, who launched into a 30-minute tirade against the Scottish executive for passing bad laws.

Why be dull, frankly?

The audience, I sense, would have preferred more jokes – but even less electrifying would have been a speech from the average ‘no’ campaign luminary.

My point is, pick up any newspaper north or south of the border, and it’s clear that the law arouses strong passions in among the media and the general population – in a way that Nato membership, say, no longer does.

So why not focus on it?

The answer that both the ‘yes’ and the ‘no’ campaigns fail to provide, is how they can respectively hope to build or maintain a nation based on the low-risk technocratic glue, and fear-stoking that the campaigns currently rely on.

As it appears at the moment, whether the result is ‘yes’ or ‘no’, it doesn’t feel as if there will be any winners.

Eduardo Reyes is Gazette features editor

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‘Hey-ho the witch is dead.’

This isn’t a piece about Margaret Thatcher’s life or death. But as with a handful of court cases from the past year, I’m struck by the language used – that, and the fact it often passes without comment.

At the start of the book Witchcraft, excellent late-historian Christine Larner recalled a scene from the preparation for a left-leaning demonstration held while Thatcher was PM.

Seeing a placard that read ‘Ditch the Bitch’, a teenage girl pointed out to the grizzled progressives who had made the sign that it sounded a bit sexist. They conceded that on reflection it did, and changed the wording to ‘Ditch the Witch’, whereupon the girl gave up in despair.

Personally I don’t share the instincts of those who would stifle negative comment on the ex-premier’s life and times.

But perhaps our teenage protester should have persevered, as today’s progressives seem to be making pretty much the same signs.

If protest sign-writers have failed to move with the times, then the same can be said of some of our judges. It may well be that former-MP Chris Huhne’s ex-wife Vicky Pryce is right to serve a custodial sentence for perverting the course of justice by taking his speeding points (a lie both maintained for years).

But Mr Justice Sweeney’s sentencing remarks for Pryce struck an odd note: ‘You have demonstrated that there is a controlling, manipulative and devious side to your nature.’ Gosh – was he taming a shrew, or sentencing someone?

Huhne, the judge noted, was the more culpable of the two – but his conduct didn’t attract the same choice words. He wasn’t, apparently, devious, manipulative or controlling.

Would a female judge handle sentencing better?

I accept I’m drawing on a small number of samples here, but I suspect she would. Here’s Mrs Justice Thirlwall sentencing Mairead Philpott – who, after all, went along with a repugnant plan hatched by her husband, that resulted in the death of her children.

‘I accept that you feel their loss profoundly and that your grief is real,’ Thirlwall noted, going on to cover the issues of coercion and dishonesty thus: ‘You had stood up to [Michael Philpott] in the past… It is inescapable therefore that when something was important enough to you, you were capable of exercising a choice which was not his choice.’

Stronger language was reserved for the more culpable defendant, Michael Philpott himself.

By comparison Sweeney’s remarks manage to leave something uncomfortable in the air, and on a far less serious case.

It isn’t just on gender that members of the judiciary can seem to misfire in remarks made in court.

Here is then-lord chief justice Lord Judge dismissing appeals against lengthy sentences for those involved in, or inciting involvement with, the 2011 riots. Judge found the use of social media in assisting rioters to be a ‘sinister’ aspect of the riots, which were typified as a ‘ghastliness’ creating ‘fear to even the most stout-hearted of citizens’.

All of which make his comments the perfect remarks for, say, a spot of bother that had to be put down in, what, 1782?

Why does all this matter?

It matters for a few reasons – none of them trivial.

Judges have some important audiences in these cases. In addition to those being sentenced, the remarks should have an impact on their family and friends, and on those who we want to avoid the same errors.

How many errant youth now fear doing something ‘ghastly’, I wonder? And as for stout citizenry – isn’t that what Jamie Oliver is worried about our children becoming, or something?

I notice that Thirwall shares a sure touch with Lady Hallett – the latter highly praised for her sensitive and clear handling of the ‘7/7’ inquests. So might it not be the case that a more diverse judiciary would more consistently produce their levels of skill in delivering appropriate messages?

When war journalist Martha Gelhorn covered the Nuremberg trials, she noted the importance of judicial tone and language – it stood, she said, for all the decency and fairness that been missed in a world-gone-mad.

That’s what we want our judges to achieve, even in more mundane cases. The judges who can’t meet that standard miss an important opportunity here.

Worse, whether it is for want of skill or self-knowledge, some go so far as to harm the judiciary’s reputation. When that happens, we all lose something.

Eduardo Reyes is Gazette features editor

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The government’s latest consultation paper on legal aid makes grim reading for any solicitor who undertakes criminal defence work and, indeed, for many providers of other legally aided work.

The headlines have majored on the Daily Mail-pleasing stories of taking much prison work out of scope, requiring a ‘meaningful connection’ with the UK before civil legal aid can be obtained and making rich criminals pay for their defence.

For the profession, however, these are of minor significance compared with:

• An overall cut of £220m in the criminal legal aid budget – more than 20% of the current spend; and
• A price-competitive tendering process which:
  1. Is intended to reduce the number of direct providers from 1,600 to around 400 - i.e by 75% - though it envisages that many existing providers would continue to the work through sub-contracting;
  2. Will set a cap on bids of 17.5% below the existing rates;
  3. Will abolish any freedom of choice of solicitor for clients – who you get will be judged either at random, according to your birthday or your surname;
  4. Begin in October with a view to contracts being in place by October 2014.

There are plenty of other proposals, including significant cuts to public law family fees, eligibility for legal aid for judicial reviews and so on, which aren’t good news either. Today, however, let me deal with tendering.

There are three major pieces of thinking behind the government’s proposals on tendering:

• It needs to save significant amounts of money and there is, it says, no point in anyone disputing that;
• The criminal defence industry is fragmented and inefficient – larger organisations, whether they be firms, joint ventures, consortia, or alternative business structures, are likely to be able to find economies of scale and deliver the services more cheaply;
• A tendering process is an inherently good way of obtaining quality services at the best price.

There are some pretty major assumptions here:

• Can the profession actually sustain a cut of at least 17.5% and deliver services at the same standard, whatever business structure it uses?
• Even if it can, will firms be able to make the changes needed within less than 18 months, particularly given that it’s currently taking six months to get an ABS licence, if you want to go down that route?
• As a matter of principle, is it acceptable for the state to dictate who represents a criminal defendant? Yet, if it does not, it is hard to see how the state can guarantee the level of work that firms will need if they are to deliver best value.

It would be open to us simply to say ‘no: we are not engaging with these proposals. They will lead to disaster’. It’s tempting to do so. However, we should not be under any illusions. The government intends to push this through. If we simply failed to engage we would lose opportunities to influence and modify the proposals, nor would we be supporting our members. The Law Society would need to think long and hard before getting itself into that position.

So what happens now?

Government has made it clear that it will listen to our ideas but that it has to make the savings. It’ll think about different ideas but it will have to make the savings anyway and the ideas will need to be good if it’s going to get over the basic assumptions that there are too many small firms and that competitive tendering is the way forward. We issued a consultation ourselves last week asking for the profession’s views. It’s vital that we hear from as many practitioners as possible with their own thoughts and views.

One option for government might be simply to take the saving directly from the existing fee rates – reduce them by 20% or more. The problem with that is that it (and we) doubt that the existing providers could survive a cut like that. Moreover, aren’t there significant problems with the present system (set out in our consultation paper) that ought to be addressed?

One suggestion is that the savings can be found elsewhere in the criminal justice system. We’ve already done a lot of work on this and made our proposals. Government’s view has been that these are useful but they won’t achieve the level of savings that are needed (and, because they involve lots of different agencies, may take time to be delivered). We need to be realistic that it is going to be difficult to find administrative or other savings that will meet this amount, but we’d welcome suggestions from the profession.

One surprising aspect of the consultation is the protection given to the bar. Essentially, Crown court advocacy fees are ring-fenced. This is disappointing. First, it is a disincentive for imaginative joint venture arrangements which ought to be being discussed between solicitors and barristers which might lead to savings. Barristers have a cheaper business model and ought to be able to compete on price with solicitors: it ought to be easier to sub-contract to them or to chambers of solicitor-advocates and the bar might well make it worth solicitors’ while to do so.

Instead the separate rates will perpetuate the incentives for solicitors to do the work in-house. Great for solicitor-advocates, not great for the bar and certainly not good news for achieving savings or a flexible legal services market.

What is essential, however, is that criminal practitioners engage with these proposals. They need to think about a number of things:

• How will they affect the existing business?
• What steps do they need to take to remain in business – should they be talking to other firms, chambers, thinking about joint ventures or forming an ABS?
• What steps would firms like to take to improve their businesses – are there things that can be done through ABSs, outsourcing or joint ventures that might actually improve things and enable solicitors to concentrate on being lawyers rather than administrators?
• What changes are needed to the proposals to enable them to make these improvements?

We need to know your thoughts on this so that we can (a) provide an effective response in the profession’s interest ourselves; and (b) provide the support that firms need.

This can only be an initial reaction to a consultation paper that’s full of difficult and challenging proposals. We’ll be studying it carefully to assess our best strategy in the profession’s interest. However, any criminal defence practitioner needs to read it and our consultation paper as well. Please let us have your ideas.

Mark Stobbs is the Law Society's director of legal policy