Society defiant as MPs call for faster progress on freeing employed solicitors

EARLY DAY MOTION: 'most unfair representation' of what has been done on a complex issue

The Law Society has hit out at an early day motion in Parliament which criticises it for not moving fast enough in removing restrictions on employed solicitors.

Nineteen MPs have signed the motion put down by Tom Watson, the Labour MP for West Bromwich East, which calls for an end to bans on employed solicitors advising the public, fee-sharing and referral fees.

It 'censures the Law Society for having made no substantial progress to reform these archaic rules while purporting to do so' and 'calls on the Office of Fair Trading to refer the matter to the Competition Commission for urgent review as soon as the Enterprise Bill is enacted'.

In March, the Society's ruling council approved the principle of employed solicitors advising third parties on the explicit condition that it would only go forward if such clients enjoy the same consumer protections as clients of solicitors in private practice.

However, it voted against removing the bans on fee sharing and referral fees.

Ed Nally, chairman of the Society's regulation review working party, which was behind all three proposals, said the motion was a 'most unfair representation of what the Law Society has and has not done' and 'displays an alarming lack of appreciation of the complexity of the subject'.

He said the Society was not acting in a defensive manner, but in the public interest.

The motion was backed by the RAC, which has stated its intention to become the first organisation to use its employed solicitors in this way and been outspoken in its criticism of the Society's progress.

Mr Nally said the Society would not sacrifice consumer protections for commercial reasons, adding that the motoring organisation was 'creating a very narrow picture from one commercial provider with very particular commercial objectives'.

In its report on competition in the professions last year, the Office of Fair Trading named the ban on employed solicitors as one which was potentially restrictive of competition.

In its progress report last month, the office noted the progress the Society was making, concluding: 'So long as self-deregulation is proceeding effectively, public action is not immediately necessary.'

It also emerged this month that there may be problems finding the parliamentary time needed to effect any changes.

l In guidance issued this week following an analysis of the European Court of Justice's ruling concerning bans on multi-disciplinary partnerships (see [2002] Gazette, 21 February, 1), the Council of Bars and Law Societies of Europe said: 'Those rules which are considered necessary to ensure the proper practice of the legal profession escape from the application of competition rules.'

Neil Rose