Solicitors overcharging clients for barristers’ work, bar claims
The Bar Council has claimed some solicitors are charging clients more for their services than barristers themselves are charging for the work.
In a practice note to barristers on retainers and fee arrangements, the Bar Council said that it is aware that in some cases solicitors are charging clients more than counsel charge them, and keeping the difference.
The body claimed that in general this practice is ‘quite wrong, and could raise serious questions about your solicitors’ own professional conduct’.
The note tells barristers: ‘In most circumstances, this will not be an issue for you. […] Your solicitors’ charges to their client are also primarily a matter between your solicitors and that client, and whether your solicitors’ actions are permissible is a matter of law and conduct for your solicitors as independent professionals.
‘You should ensure, however, that you are not actively and knowingly involved in creating or entering into an arrangement which involves charging the client more for your services than you are charging in circumstances in which this is unlawful or in clear breach of your solicitors’ duties to the client.’
A spokesperson for the Solicitors Regulation Authority said: ‘The Code of Conduct is very clear that all communications between solicitors and clients - either in publicity material or in client care letters - should explain fully the nature of arrangements with third parties, including the way that fees are charged. Solicitors also have an obligation at Outcome 1.1 to treat clients fairly.
‘If we receive any evidence that solicitors are not making these matters clear, as the Bar Council note suggests, then we will look at that evidence and decide on an appropriate course of action.’
The Bar Council does acknowledge that in some circumstances a mark-up is permissible, such as where it is done with the informed agreement of a sophisticated commercial client.
The practice note also warns junior barristers that there is a ‘real risk’ that flat-fee arrangements proposed by solicitors or clients, although not unusual, could be linked with ‘doubtful work practices’.
Such an arrangement may amount to a disguised referral fee, or create a pressure to ‘cut corners’ due to unreasonably low fees.
The guidance also tells barristers that some arrangements could mean practitioners are acting as employed barristers under Bar Standards Board rules.
To be an ‘employed barrister’ under the BSB Handbook ‘your legal status does not need to be that of an employee’, the guidance says. ‘It is possible to be a self-employed, independent contractor in law whilst also an “employed barrister” under the BSB Handbook,’ the practice note said.
The practice note says that this applies to self-employed barristers taking on fixed-period work under a written contract.
It reminds barristers: ‘You will be in breach of the BSB Handbook if you provide legal services in a capacity which your practising certificate does not permit, and this might result in you committing a criminal offence.’