Posted on Corporate Business 2 August 2006
Approved by the Chair
SC 11 2006 2 Item 6
REPRESENTATION BOARD
Minutes of the meeting on 12 July 2006
at 10:00 at 60 Carey Street, London
Present:
Rodney Warren
Nigel Dodds
Keith Etherington
Ian Lithman
Richard Miller
Christopher Palmer
Fraser Whitehead
Mike Williams
Chair
Council member
Council member
Council member
Council member
Council member
Council member (Item 8, Minute 75)
Council member
In
attendance
Vicki Chapman
Head of Law Reform and Legal Policy
(Item 4, Minute 71)
Head of Regional Development
Director of Representation and Law
Reform (Item 10, Minute 77)
Policy Manager Legal Aid and Costs
(Item 3, Minute 70 & Item 7, Minute 74)
Head of Business Development and
Best Practice
Head of Equality and Diversity
(Item 6, Minute 73)
Director of Strategic Policy
(Item 4, Minute 71)
Ian Croft
Evlynne Gilvarry
Greg Lewis
Maureen Miller
Parveen Sharma
Russell Wallman
Lucy Scott Moncrieff
Simon Young
Council member
Council member
Roger Bowden
David Merkel
David Willis
Co-opted member
Council member
Co-opted member
Guests
Apologies
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MINUTES
The minutes of the Representation Board meeting on
17 May 2006 were agreed subject to the following amendment
of minute 57: delete the sentence ‘Under the current
Recognised Groups Agreement, groups would not be eligible for
grants if they did not implement opt-in by this date’.
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MATTERS ARISING
Mike Williams asked for further information in relation to Litigation
Funding and the continuing threat it posed to the Dispute
Resoluton Section (minute 53). At the suggestion of the Chair it
was proposed that the issue should be taken up outside the
meeting.
Ian LIthman requested further information on representations to
the Council of Mortgage Lenders on its approach to sole
practitioners. Richard Schofield would update him.
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Greg Lewis/
Geaneen Hayes
Richard Schofield
THE CARTER REPORT
The Board noted the report.
A confidential paper was circulated which anticipated the contents
of the report of the Carter Review expected to be published the
following day.
The Chair explained the iterative nature of the Carter Review and
the strict confidentiality that had surrounded the talks. The paper
before the Board was the best estimate of what the final report,
which was being changed right up to publication, would contain.
It was expected that the Carter Review report would be followed
immediately by a consultation paper from the Department of
Constitutional Affairs and the Legal Services Commission
proposing how the Carter reforms should be implemented.
It was stressed that in relation to legal aid, both criminal and civil,
no change was not an option. The Carter Review signalled major
changes for a majority of legal aid firms. The challenge for the
Law Society was to show strong leadership to the profession
whilst vigorously lobbying the DCA and the LSC for changes that
would ensure the viability and sustainability of the system.
While the primary focus of the Carter Review had been on
criminal legal aid, it had latterly examined the civil and family legal
aid system and would be making proposals that built on the
LSC’s five year plan for the CLS. The Society had successfully
argued that that Community Legal Aid Centres (CLACs) should
not be allowed to operate as monopolies. Throughout the Carter
Review the Society had also stressed the particular vulnerability
of the civil legal aid supplier base – a point which the Carter team
appeared to take on board.
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Some positive features expected in the Carter Review report
were a proposal for a package of financial support to help firms
make the transition to the new regime; a recognition that if the
volume of cases goes up, the financial ‘envelope’ must be
increased accordingly and the creation of a review body to
monitor implementation of the changes.
The Board discussed the commitment to implement, given the
Society’s experience with Clementi, and the LSC’s record of
delivery gave rise for doubt. Board members inquired whether
the fees proposed were pitched at a level that pre-supposed that
some of the work would be done by non-lawyers. There was a
growing use of legal aid helplines and there was a question
whether legal aid was being ‘softened up’ for privatisation.
The new Chief Executive at the LSC would be recruited
specifically with a mission to see through the changes proposed
in the Carter Review report.
The expectation was that the consultation would take a three
month period beginning in July, although the Society had already
made a bid for extra time.
The expected proposals on civil legal aid were encouraging
overall although there was scepticism about the LSC’s plans for
implementing CLACS. However, the criminal legal aid proposals
were considered ‘unworkable and dangerous’. Fixed fees were
impractical in a system which had so many variables and would
have the effect of driving down quality.
With a regime of fixed fees there would have to be a pragmatic
approach to quality; it would simply not be possible to deliver a
Rolls Royce service on fixed fees. This argument would have to
be put firmly to the LSC which was pressing ahead with the
Preferred Supplier Scheme which would require ratings of level 1
or 2 in peer reviews.
The Board discussed the cost of transferring quality assurance of
legal aid practitioners to the Law Society (another proposal
expected in the Carter Report). It was confirmed that the cost
(estimated by the LSC as £2000 per peer review) would transfer
to the Law Society although it had not been decided whether this
would ultimately fall on the profession as a whole or just the legal
aid sector.
The Society supported the policy of CLACs being located in areas
with a demonstrable supply deficit. The choice of location for the
first two pilot CLACs – Gateshead and Leicester – ran counter to
this idea. However, the Carter Review was likely to recommend
that no CLAC should be a sole provider.
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The Board thanked Evlynne Gilvarry, Greg Lewis and the legal
aid team for all their hard work on the Review, and also
acknowledged the enormous contribution of the negotiating team:
Rodney Warren, Rob Brown and Lucy Scott Moncrieff.
71
SHAPE OF THE NEW LAW SOCIETY: REPRESENTATIONAL
STRUCTURES
The Board noted the paper. A schematic governance structure,
providing for input to subsidiary Boards from groups, local law
societies and practitioner associations was also circulated. An
email group would be established to enable Board members to
exchange views that would be fed into a paper to be brought
back to the Board at its meeting in September.
Mark Paulson/
Vicki Chapman
The Board agreed that there should be urgent consultation with
the groups on the issue. The issue should be tackled ‘bottom
up’, providing a mechanism through which local law societies
and other local groups could engage. The Vice President
questioned the premise of two separate boards for
Representation and Law Reform – the status quo might not be
valid for the future.
Additional item
Rights of Audience
The Board would be emailed to ask for its approval for an
application to the Regulation Board to seek unrestricted rights of
audience for solicitors on admission. The application would be
made against a backdrop of the Clementi reforms and the Carter
legal aid reforms, which made it highly desirable to remove
existing restrictions on solicitors’ audience rights.
Another paper would be emailed to the Board outlining a
campaign aimed at defeating a move to raise the upper limit for
small claims in PI and housing disrepair. The Association of
British Insurers was actively promoting a scheme would remove
lawyers from the process and this needed to be resisted with an
alternative that would preserve a proper role for lawyers but
reduce the costs of handing low value claims.
Russell Wallman
Anna Rowland
Both papers would be circulated by email as there was a need
to move ahead in advance of the Board’s September meeting.
There was an inquiry whether the Society was seeking an
increase in oath fees. The Board had previously agreed that this
was inadvisable as it might provoke a move to abolish the fees
altogether.
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72
RELATIONSHIP BETWEEN REPRESENTATION AND THE
REGULATION BOARD
The Board considered a paper setting out details of the
establishment of the Regulatory Affairs Group (RAG) – the main
group for dealing with regulatory issues and interacting with the
Regulation Board and the Consumer Complaints Board. To
complete its membership the group sought a member of the
Representation Board with a particular knowledge of and
interest in some aspect of regulation. The RAG invited
expressions of interest to be sent to Evlynne Gilvarry.
73
UPDATE ON THE OPERATION OF THE SOLICITORS’
SUPPORT NETWORK
The Board reconsidered the amount previously agreed as
payment to LawCare for out of hours cover, following
representations by LawCare’s Chief Executive. The Board
agreed that LawCare should be paid £10,000 for the work,
reversing a decision at the previous meeting which had agreed
that a sum of £5,000 should be offered. LawCare would be
informed immediately of the recommendation.
74
Parveen Sharma
TAX TREATMENT OF LEGAL SERVICES COMMISSION
COMMITTEE MEMBERS
The change in tax treatment of legal aid committee members
had been raised with the Legal Services Commission and a
response was awaited. . It was suggested that the LSC had
concluded discussions with HMRC and the issue was closed. In
light of this, the Board agreed that a direct approach be made to
the HMRC.
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Evlynne Gilvarry
Greg Lewis
REFERRAL FEES
The Board noted the report on the work of the Referral Fees
sub-group, most of whose members reflected a spectrum of
opposition to referral fees.
The paper prepared by sub-group member Michael Webster
suggested that the existing code was unsatisfactory from a
regulatory point of view because it was difficult to police. The
Code also failed to deliver on OFT requirements of public
interest and competitiveness as there was some evidence of
increased fees and restriction of choice for the client. The Board
was asked to recommend to the Regulation Board that it should
seek updated Counsel’s opinion on the prospects of resisting an
OFT prosecution for an outright ban on referral fees. Counsel’s
opinion had been sought prior to the Council’s original decision
January 2004 to relax the ban on referral fees. That opinion
suggested that an absolute ban on referral fees could be
justified as necessary for the proper practice of the profession.
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Members felt that Referral fees were rapidly becoming the
principal way of acquiring business. They had forced a shift
away from professional reputation to ‘money buys’ and the
larger, better resourced firms were tying up the work. This was
particularly prevalent in personal injury work where referring
insurance companies directed all their work to panels of
solicitors willing to pay large referral fees. This raised serious
questions about professional independence and there had to be
doubts about whether clients realised that they were being
‘bargained for’ in that way.
The Board heard a minority view from the sub-group in favour of
referral fees which stressed at the outset that it did not support
referral fees coming out of clients’ money or breaches of the
code.
The minority view did not accept that the code was difficult to
police. The Practice Standards Unit had picked up several
breaches as part of its monitoring although there had been no
follow through on enforcement due to lack of resources.
The report also did not accept that the risk to professional
independence was significant where solicitors were paying a fee
rather than receiving one.
Nor did the minority view believe that referral fees were against
the public interest. There was no evidence to support this –
indeed the logic was to the contrary as introducers would look
for firms of higher standards.
The minority view concluded that introduction and referral fees
were ‘a marketing expense and nothing more’. The Board was
urged not to turn the clock back but to help firms prepare for the
real competition that would come with full implementation of the
Clementi reforms.
Following a lengthy discussion, the Board agreed that a letter
requesting a full scale, urgent review of the rules on referral fees
should be sent to the chair of the Regulation Board. The letter,
which would be sent by the Chair of the Representation Board,
would draw attention to undesirable developments in personal
injury work as a result of referral fees. It would also highlight
lack of enforcement of widespread breach of the disclosure
rules. It would draw attention to Counsel’s opinion and would
note that the senior judiciary and the Civil Justice Council had
expressed serious concerns about the new arrangements.
Russell Wallman
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76
GUIDANCE TO THE PROFESSION: SOLICITORS AND
DUTY TO REPORT POTENTIAL TERRORISM
The guidance was noted and approved, subject to any additional
comments made by the Rules and Ethics Committee, and the
Board agreed that it should be circulated to solicitors.
77
THEIR
Janet Arkinstall
DIRECTOR’S REPORT
The Board noted the report.
The meeting finished at
12.20.
Signed:
Rodney Warren
Chair, Representation Board
Date
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