Solicitors overcharging clients for barristers’ work, bar claims

Topics: Advocacy,Regulation and compliance,The Bar

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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.

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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.’

Readers' comments (15)

  • Presumably the only real objection is that they are not getting a piece of the action.

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  • Did I ever mention the time I instructed a Manchester barrister to do a trial for me in Kent on a CFA? The bill rendered included on overnight at a London hotel (fine), the same for counsel's partner (not fine), breakfast in bed for counsel and her paramour (very not fine), plus a 100% success fee on the lot (I never instructed her ever again). Presumably the BSB are happy with this.

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  • This minor article throws up some interesting points.
    The first is the hopeless "advice" that is given by the SRA.
    A young child could formulate a rule that was clear, concise and comprehensible, but the SRA must obfuscate with its Outcome Focussed Regulations that tell you nothing, and are then judged with the benefit of hindsight. To claim that the Code of Conduct is "very clear" could not be further from the truth. What is clear about having to treat clients fairly?. What is fair to one client may be unfair to another. Is it fair to say "I will charge a mark up of 100% on all disbursements"? Is it fair to tell them your charging rate without telling them that it is twice the price that anyone else in the area charges (even though you are no more competent or efficient than the others)?
    The rule could be "Disbursements must only be charged to the client at cost", but it is not, because that is clear, and not Outcome Focussed.
    The second is to note the Bar Council advice is refreshingly clear, unlike that of the the SRA.
    The third is to note the article traduces the report (of which this issue is a small part) by asserting the Bar Council state:
    "in general this practice is ‘quite wrong, and could raise serious questions about your solicitors’ own professional conduct’."
    In fact the note recognises that there are times when a Barristers fee is properly treated an overhead of the solicitors practice and are effective subsumed into the overall fee that the solicitor charges. The Note reads:
    "If the arrangement is one in which your fees are genuinely a cost to the solicitors themselves, and not a disbursement, then this may be permissible on the part of your solicitors, at least if it is in the client’s best interests in all the circumstances"
    It also suggests that a mark up could be permissible if done with the informed agreement of the client, particularly if they are a sophisticated commercial client.
    The note does not include the words "in general this practice".
    The full sentence reads:
    "Where your fees ought to be charged as a disbursement, however, this would be quite wrong, and could raise serious questions about your solicitors’ own professional conduct."
    The fourth point is the Bar Council claims that it is "aware that in some situations, solicitors are charging clients more for the services of barristers .... than the barristers themselves are charging".
    No explanation of which category thais falls into is given. If they are considered breaches of professional conduct have they reported the, and so with what result?

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  • That headline is extremely unfair.
    99.99% of solicitors would never even entertain the thought of doing that.
    ''99.9% OF SOLICITORS ACT FAIRLY AT ALL TIMES RE COUNSEL FEES''.

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  • It would be nice if it was 99.9%. I know of a firm that charged a client £5,000 for a mags trial. Paid the 'referrer' £2,000. Paid Csl £250 for the trial, and kept the rest. It also goes on all the time in RTA cases.

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  • Has Stringer v Copley become bad law?

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  • Is anyone really surprised that this sort of things has started to creep in. Traditionally the solicitor's profession knew a thing or two about ethics and the rules made it clear what was not ethical.

    Turning solicitors into business people was bound to blur those edges.

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  • My reading of the current "outcomes focussed" rules is that so long as your client understands what you are charging and why, that is fine. What you pay third party suppliers, or sub-contractors, is between you and them.

    If Counsel is being briefed as part of the legal team to exercise rights of audience, etc., then I think you would have to charge as professional disbursement Counsel's fees alone. Anything else would be a "secret profit" which you can't do as you are in a fiduciary relationship.

    On the other hand, if Counsel is being instructed to do a Mags / County Court trial as a discrete item of work, which you could and maybe would do yourself, they are surely no different to a solicitors' agent (or even a locum employee - as the BSB points out). They are only being instructed to save yourself the hassle of travelling and being out of the office.

    I am not saying I agree with it, but that is my reading of the rules.

    We're not supposed to be professionals anymore anyway, with fiduciary obligations, etc. We're supposed to be exciting super ABS business offering innovative "solutions" to enhance "customer-seeking desires" and enabling effective "hot-tubbing" in a North-shored Thought Jacuzzi.

    So M'Learned friends had better get with the programme...

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  • Ahem.

    I think its the other way around.

    Basic admin work at £400 per hour?

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  • Does anyone remember the case of that firm in S W England which charged as a disbursement something like £30 for a TT for which their bank only charged £21? The balance was for their time.

    The fine on each partner was something like £20,000! I think the idea was to teach them, and the rest of the profession, a lesson. The trouble really is that we are no longer a profession. It would never even enter the head of a true professional to behave in this way. We are supposed to to serve our clients, not to swindle them!

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