Society and Bar clash over new standard contract terms
Solicitors have been warned to protect themselves against new terms governing their relationship with barristers which come into effect next week. In a practice note, the Law Society said the Bar Council’s new standard contractual terms of business, which for the first time enable barristers to sue for their fees, put solicitors at a disadvantage.
The Bar Council said it was ‘surprised and disappointed’ by the warning, which is the latest move in a decade-long debate between the two professions about putting relationships on a more formal footing. Rather than operate on the traditional default of non-contractual arrangements, barristers have increasingly sought to agree contractual terms with solicitors to mitigate the risk of non-payment.
Negotiations broke down in 2008, but last year the Legal Services Board approved an amendment to the bar’s code of conduct that the cab rank rule would apply only where work was offered on the Bar Council’s new contractual terms, which take effect from 31 January.
The contract requires payment within 30 days of receipt of an invoice regardless of whether a solicitor has been put in funds by the client. Where solicitors fail to pay, the terms replace the Withdrawal of Credit List with an advisory List of Defaulting Solicitors, from whom barristers will not be obliged to accept work.
The Law Society said that as the contract was adopted unilaterally by the bar, the balance of obligations is ‘weighted strongly in favour of barristers’. Of particular concern are clauses that tighten barristers’ intellectual property rights, exclude liability for the barrister and permit higher hourly rates.
The practice note alerts solicitors to the contract provisions and suggests a model letter to seek changes to its terms.
Law Society president Lucy Scott-Moncrieff said there should be a contract to bring the commercial relationship in line with standard practice, but ‘there must be a balance between the two interests and most importantly, that of the client.’
She said: ‘The bar’s proposal favours the barrister and gives the solicitor, and therefore the client, insufficient control or effective remedy in the event of inadequate performance by the barrister.’
In the absence of an agreement between the two professions, she said the Society had ‘no alternative’ but to issue guidance to solicitors, warning them of provisions which could be contrary to their interests and suggesting alternatives.
Visit the Law Society website to read the practice note.
Comments
New Standard Contract Terms
Are there any other industries in which someone providing work or services cannot sue for their fee if it is not paid? Surely when a solicitor engages an expert, for example, that expert can sue for their fee if it is not paid?
That is correct. The only
That is correct. The only means of recourse for unpaid fees a barrister currently has it to report the matter to the Bar Council. It takes about 12 months for them to investigate because of the enormous backlog. When it has been investigated the Bar Council can blacklist the firm so that they then have to pay all counsel's fees up front from then on. The barrister who reported them is no closer to getting paid though!
Of course, the Law Society
Of course, the Law Society issued similar warnings and fought the professions corner against the CML.
Oh no, it didn't did it?
"Discuss with your insurers"
In respect of several of the clauses, the Practice Note advises soliciors to "discuss this with your insurers". That is pretty lazy advice. The clauses in question have nothing to do with insurers. In any event, all solicitors' policies are written on the basis of the minimum terms, so why hasn't the Society (on behalf of the profession) already discussed the relevant clauses with Qualifying Insurers?
Barristers unilaterally
Barristers unilaterally imposing a contract but removing liability. When they are struggling to get work in. The bar is full of academic people but not many strategists. The phrase 'turkeys voting for christmas' comes to mind.
Why not a "battle of the forms"
Why doesn't the Law Society introduce its own standard terms of engagement and solicitors be encouraged to use those? Do most barristers have enough work/money to refuse? I don't know but for those of us who don't instruct much it could be informative to watch.
The alternative of agreeing a set of terms might be a better idea though, has the Law Society tried that?
The easiest way to avoid the
The easiest way to avoid the issue is for the solicitor to get funds on account from the client, before confirming instructions. The only real burden is then on the clerk to provide a proper estimate.
Put it in your client terms
When I opened my own practice I put it in the client care letetr that I would not instruct counsel without cleared funds on account. I explained that my professional rules required it.
The old rules made it clear it was a professional offence not to pay counsels fees and that we were liable. So I put the onus clearly on the client.
Perhaps that is why I never had problems getting good counsel.
I see no reason why there should not be a contractual basis as long as it is fair.
Sorry to see the Bar are trying to exclude liablity. That has to be a non-starter.
However, as more solicitors carry out their own advocacy all the time the turkeys really should wise up before they get a stuffing!
Time for the BAr and LS to get their heads and their act TOGETHER!
Excluding liability
Contrary to what is said in the article, the terms do not "exclude liability for the barrister". Clause 10 excludes liability for loss/damage caused to anyone other than the lay client. It also excludes liability for "any loss or damage, however suffered, which is caused by inaccurate, incomplete or late Instructions" and for "any indirect or consequential loss however suffered".
Whither maum pactum dictum. A
Whither maum pactum dictum.
A (former) assistant of ours instructed counsel when there was no funding in place and the client was already complaining about the assistant . . .in the end the retainer was terminated by the client who refused to settle the bill. We paid counsel and wrote the costs off as this was as much a management failure as it was the fee earner's negligence.
Perhaps the profession should not be incurring liabilities it has no appetite or means to satisfy?
dictum meum pactum, my word is my bond
Perhaps the profession should refrain from using Latin expressions it doesn't properly remember, in order to sound clever?
Barristers acted unilaterally
Let's give some praise where it is due. The Law Society on this occasion has being prompt
and almost decisive in its response. Kudos.
As suggested by a previous contributor, The Law Society should go as far as providing its own terms of Contract for use with the Bar. The recommendations are a good start.
The Bar cannot operate as if the constraint Solicitors confront don't matter. You cannot demand
or sue for payment if a Solicitor has not being put in funds. The SRA recommended clause is timely here.
If an instructed Barrister cannot accept the simple logic of being paid when the funds are made available take your brief elsewhere. Enough of this lopsided relationship.
Hopefully, someday in the near future the number of Solicitor Advocates who understand this simple concept of payment, will be sufficiently available to nullify this increasingly unilateral moves from the Bar.
or make sizeable donation to tweedle dum and tweedle dee
make a contribution to tory coffers and the Govt will ban barristers from accepting any cases and any fees which are in essence a referral fee in any case
Is this really going to make
Is this really going to make a great deal of difference? Any barrister foolish enough to exercise their contractual right to receive payment from my firm even though the client has not paid us is not going to receive any more instructions from us. Barristers will realise this and will agree to refrain from pursuing payment in return for receiving further instructions. It's one of the few areas left in which we have any degree of power!
Storm in a tea cup
Chambers will only sue a solicitor they are content to receive no more work from in the future. That is a pretty small pool. Most barristers and clerks take the long term view that they would rather receive more work in the future. This just gives Chambers the opportunity to sue, why should they not be able to join the rest of the world in being able to do that?
Bar Contracts
I amazed at some of the comments being made by members of the profession. "if barristers want more work they will refrain from suing us for fees that are due; barristers should take a long term view". Counsel does work on an agreed fee. Counsel then sends a fee note and can be expected to be paid when the instructing solicitor deems it appropriate or not get any more work from that solicitor! If that is the attitude no wonder the bar council is taking the view that it does.
Reality
Paul, I'm not sure why you are amazed. In the majority of cases the solicitor will get payment on account from the client and the barrister will get paid. However, the reality is that there are always one or two cases which slip through the net and in which circumstances dictate that a barrister's fee is incurred before monies can be obtained from the client. If that client then refuses to pay the solicitor (including for the solicitor's own costs!) it is commercial suicide for the barrister to insist that his fee is paid in full. Why shouldn't the barrister share the hit with the solicitor?
Reality
Surely that depends upon whether the barrister was informed of the position in advance, in which case something would be agreed between Counsel/clerk and solicitor over-riding the contractual terms regarding the expected date for payment? If we solicitors just willy-nilly instruct Counsel without money on account and without warning Counsel that there may be a delay, we have to take on the responsibility if the client then lets us down.
Very early in my career I had the task of chasing recalcitrant firms for fees owed to a barrister's estate, and a right dog's breakfast the process was. I can understand the Bar's position on this, albeit that if the entire solicitors' profession behaved professionally in this respect it wouldn't be necessary.
counsels fees
I have always had a policy of getting money up front and paying counsels fees almost by return of post. Isn't that how we would like our clients to treat us ( even though they don't of course).Works 95% of the time. If there are special circumstances eg a property has to be sold to cover fees then discuss with the clerk and if counsel wants a small mark up for uncertainty so be it
Absolutely - as has been
Absolutely - as has been mentioned above, this is not going to have a practical effect in a huge majority of cases, as most counsel are not minded to commit career suicide by alienating local solicitors.
Rather, what this does is remove the ridiculous provision that blocked counsel from suing a rogue solicitor who had no intention of paying up, something which obviously only happens very rarely but which nonetheless happens all the same. Previously, there was practically no way to recover that money, which was a serious imbalance.
I agree with the idea of the SRA having a standard terms of business to govern these relationships, provided both sides have enough room to protect themselves from wrong'uns.