Contracts governing the relationship between barristers and solicitors could be in force by the end of the year, with the two professions understood to be close to an agreement after several years of on-off negotiations.

The outstanding sticking points in the talks between the Law Society and the Bar Council are thought to concern the nature and status of any contract, and the terms relating to the solicitor's obligation to pay counsel's fees whether or not they are themselves in receipt of funds from the lay client.


The contract, in its current draft, is intended to apply in all circumstances, unless the parties have agreed alternative terms - they can agree additions or amendments.


The draft proposes terms for the billing and payment of fees, including provisions for a binding arbitration process to deal with disputes and a mechanism for the barrister concerned to obtain summary judgement in default.


The Law Society has previously been unhappy with the current withdrawal-of-credit scheme and solicitors have felt it would be too burdensome to be forced to pay counsel's fees when they were not in funds.


The bar's position is that without a contract and without sanctions that can be taken against a solicitor, barristers - particularly those in the junior ranks - are exposed to financial risk, given their obligation to accept work under the cab rank rule.


Geoffrey Vos QC, who heads the bar's fees collection committee and working party on the draft contract, said: 'We are very close to reaching agreement and we will probably make an announcement in the next couple of months.' A Law Society spokesman said 'very good progress' has been made.


Graham Huntley, president of the London Solicitors Litigation Association and a partner at City firm Lovells, said: 'We are negotiating a contract that will be appropriate for solicitors to use in many situations, but the parties will be free to amend it, add to it, or do something altogether different. There needs to be an appropriate balance of risk.'