Agenda item 2 is our second evidence session on the Legal Profession and Legal Aid (Scotland) Bill. There are three panels of witnesses.
First of all, thank you for introducing us all. I am conscious of the fact that we have brought quite a large team, but we thought that it was important for you to have the benefit of the expertise of the various people who are here. I know that you do not want a long opening address, but I would like to mention one of the things that we want to stress today: we believe in the policy behind the bill that there should be an independent commission to deal with service complaints. There has been a lot of comment in the media, and I would not like the committee to get the impression that we have moved back from where we said we were last year. We think that there should be a commission, but we do not think that it should deal with conduct issues, other than those to do with handling complaints. We do not think that it should deal with negligence or that it should have reach over the master policy and the guarantee fund, but we believe in the fundamental principle.
Thank you for those comments. I shall start the questioning on behalf of the committee by asking you a question that follows on from the comment that you just made about supporting the proposal that the new commission should consider service complaints. Given that it is recognised that consumers tend to have a fairly low level of confidence in the current complaints-handling system, why should the professional bodies retain responsibility for considering complaints about conduct?
I shall leave to one side the question whether there is a low level of consumer confidence, because I do not know that that is necessarily correct. The principal issue in relation to conduct is whether or not the profession is independent. Conduct is central to being a solicitor and being part of the profession. Service is very much about somebody who may have a complaint about a bad job and who may be looking for consumer compensation. In a democratic society, it is key that the solicitor or legal adviser is independent. The solicitor often stands between the client and the state, and it is imperative that the state does not have control over that adviser. We know of no other profession over whose conduct the state would have control in a democracy. The same clearly applies to advocates.
During the debate in the chamber a couple of weeks ago, I pointed out the following parallel to Mr Swinney. The medical profession has the General Medical Council, which looks at conduct and standards, and the British Medical Association, which has the trade union role. Does the Law Society of Scotland have any views about such a division?
That issue is one that we wanted to raise with you early on. It disappoints me that, at times, the Law Society of Scotland is treated as if it were nothing but a mere trade union. We are a statutory body that was created by the Westminster Parliament under the Legal Aid and Solicitors (Scotland) Act 1949, and we have a section 1 obligation to act on behalf of the profession and on behalf of the public in relation to the profession. It is not in our gift to decide to reinvent ourselves as a trade union. Indeed, our main contact with this Parliament is through the law reform process. We do our best to reform the law—and the bill that we are considering now is no different—in the best interests of the public and the profession.
Thank you.
Mr Mill, can you define for me a "mere" trade unionist, as opposed to a trade unionist?
I am not being pejorative about trade unions, which fulfil a valid role in society; I am talking about the "mere" interest of our profession—or the interests of our members. We have a statutory responsibility that goes beyond looking at everything that we do, which includes admitting solicitors to the profession, educating them or providing them with continuing professional development. We have to consider not just the interests of our members, but the interests of the public, and that is a major balancing factor.
I am grateful for that clarification. I am sure that you will agree that language is very important.
Like the panel, I do not want to get into whether the public have a low or high degree of confidence in the Law Society. I am sure that we all want to ensure that they have the utmost confidence in the Law Society.
That goes back to what I said before and would imperil what we see as the independence of the legal profession. I understand the thought of putting everything under one roof. However, last year, having looked at the responses to the consultation, we said that, in service complaints—which are 70 to 80 per cent of the complaints that we handle—we were never going to win the perception battle. We felt that we had won the reality battle, in terms of how the complaints were handled, but that the perception was past praying for as long as the Law Society looked at those complaints. We think that there is a big difference between service complaints and conduct complaints.
We will come to the separation of those two matters in due course. Is not there a danger that the Law Society is overplaying its hand by saying that its independence is being called into question when we are talking about a complaints procedure? We are talking about an independent commission looking at complaints, rather than an independent commission trying somehow to run or substitute itself for the Law Society.
We see two definitions of independence. One—which, I think, the committee is driving at—is that the system should be independent of the profession. In relation to service matters, we fully concede that. Our concern is also about independence from the Government. As the president said earlier, we are concerned that there are certain areas of work in which solicitors are the only people who stand between the citizen and the state. There are also unpopular areas, such as the defence of criminals, cases involving damp houses and immigration appeals, in which the solicitor might not be too popular with the state.
It is not so much from the profession's point of view that independence is so important, but from the point of view of the people of Scotland, who deserve an independent profession. It is important for the profession—which is part of the public—but it is more from a public perspective that the independence of the legal profession is key.
We will hear from the Faculty of Advocates later, but I was just going through its written submission to the committee. I am interested to see that its existing complaints committee is comprised of
We are not here to answer on behalf of the faculty. Our system is entirely different and is a much more considerable system than the faculty's. I will ask Philip Yelland, our director of client relations, to answer that. Anne Hastie is here to speak on the considerable lay input that we have into our existing system. We are—
I am sorry for interrupting, but my point was about the appointment of lay members by ministers.
Yes, I know. The Scottish Solicitors Discipline Tribunal is partly lay and is appointed, to a certain extent, by ministers as well. Therefore, to an extent, we already have that procedure. The solicitor members of the tribunal are appointed by the Lord President, and the non-solicitor members—Philip Yelland will be able to tell you about ratios and numbers—are appointed by Scottish ministers. Our concern is that the proposed commission is far closer to Scottish ministers than it should be for there to be robust independence.
It is important to look at schedule 1 to the bill when considering the degree to which Scottish ministers will have a role to play in the appointment of the proposed commission. Paragraph 2(2) of schedule 1 states:
That will open the debate on, for example, the appointment of the Lord Advocate as an independent prosecutor.
You might think that; I could not possibly comment.
There will be on-going debates. The committee would like to know where the balance will be. As Mr Mill said, to a certain extent, ministers are already involved in the Law Society; however, he then said that the proposals take us in the wrong direction. The committee would like to know where you think the balance should be. You are not saying that ministers should not be involved at all—or perhaps you are. Lord Lester's opinion indicated that, because ministers are involved, somehow the tribunal is not going to be independent. Where should the balance be?
It is a question of balance, and the detail is important—detail on which we are willing to engage with the Executive. We do not think that it is beyond the wit of mankind to work out something that balances all the interests. However, what is proposed in the bill is extremely one-sided.
The membership of the society's committee for conduct complaints is 50 per cent lay and 50 per cent professional. If the commission had such a balance, do you think that it would be equipped to deal with conduct complaints?
You are quite right to say that the membership of the professional conduct committee, which deals with complaints about professional misconduct, is 50 per cent solicitor and 50 per cent non-solicitor, which is the same as the client relations committees, which deal with service complaints. The move to 50:50 membership, which we took on board very quickly after it was recommended by the previous Justice 1 Committee, has worked very well for us.
What if, later on in the bill's passage, such a proposal is made for the commission?
The bill does not propose such a committee structure for the commission. I think that we have still to see a lot of the detail, but the proposed system appears to be based on case managers making decisions. That is a retrograde step, because it means that we lose both professional and lay expertise.
Colin Fox will now ask some questions on a topic that has been exercising the committee: the distinction between service and conduct complaints.
Will you give the committee a clear idea of what a service complaint is and how it differs from a conduct complaint?
Perhaps I can provide a couple of helpful examples. As we indicated earlier, service complaints relate to the service that the client receives from the solicitor and might involve failure to return telephone calls, answer letters quickly or explain how expenses will be dealt with. Conduct complaints, on the other hand, relate to matters of professional discipline and involve breaches of practice rules or the solicitors' code of conduct, such as lying to a client, taking a client's money, being dishonest or not acting independently.
Do the public understand that distinction? If someone made a complaint to the Law Society of Scotland, would they understand the categories under which it might be dealt with?
Some people understand the distinction, but not everyone does. In recent years, we have tried to improve our literature to explain it to the public. I should point out that some people who complain to us do not seek financial recompense; they simply do not want their solicitor to continue, because they feel that he or she has acted improperly.
A number of people, including the Scottish legal services ombudsman, have pointed out that complaints can often straddle both categories. In light of that, can the bill's provisions stipulate that service complaints should be dealt with in one way and conduct complaints in another, or will such a separation cause difficulties?
Those provisions might well cause difficulties, but they can be overcome. We already co-regulate with a number of bodies, such as the office of the immigration services commissioner, which has made it clear that the approach works quite well. Once the architecture of the new commission becomes clear, we will simply have to sit down and find a way of dealing with the matter to ensure the minimum of disruption, delay and bureaucracy for the person making the complaint.
Who makes the decision whether a complaint is handled as a service complaint or as a conduct complaint?
Under the Law Society of Scotland's current process, we agree the issues with the person who makes the complaint and, after considering the statutory definition of inadequate service and what falls into the category of potential professional misconduct, the case manager decides whether it is a service or a conduct matter.
Is it fair to say that, no matter what category complaints fall into, having a single mechanism might make things far simpler and ensure that problems never arose?
Superficially, things might appear simpler. However, as you proceeded with an investigation and the decision-making process, you would get into difficulties trying to decide what should be done. As I pointed out earlier, there is a distinct separation between a service complaint, which involves the provision of poor service to a client, and complaints about professional discipline.
Anne Hastie wants to make a couple of comments.
Perhaps the distinction is not that clear to the public. I am a member of a client relations committee, which handles policy, strategy and so on. The non-solicitor members have been keen to ensure that the literature can be easily understood by the public, does not contain too many terms that could be misunderstood and makes clear what the issues are and how they can be dealt with. I have been a non-solicitor reporter for the Law Society of Scotland for about three years, and I was surprised to find that the Law Society in England and Wales does not have such positions. When I told members of the Law Society in England and Wales that I was a non-solicitor reporter they asked, "What's that?"
As I understand it, when a complaint is made against a solicitor, it is investigated first by a Law Society reporter. Is that correct?
Once a complaint has come in and we have agreed the issues, the case manager will put those issues to the solicitors for a response. The response and the solicitors' file will come to us and then to a reporter, who, as Anne Hastie said, can be a solicitor or a non-solicitor, depending on the type of case. Thereafter, the report comes back and the parties have a chance to comment on it before it goes to a client relations committee for consideration. The client relations committee, which is made up of 50 per cent solicitors and 50 per cent non-solicitors, then makes the decision, unless the recommendation relates to professional misconduct, in which case it goes to the professional conduct committee, which is also 50 per cent solicitors and 50 per cent non- solicitors. The professional conduct committee will then decide whether somebody should be appointed to prosecute the matter before the independent Scottish Solicitors Disciplinary Tribunal; it may reach a different view, which would not involve prosecution before the tribunal.
Are there circumstances in which the view expressed by a reporter commissioned by the Law Society to examine a case is rejected by the client relations committee?
Yes, that can happen. If it does, the decision that the complainer gets, which is different from that recommended by the reporter, will be explained by the committee in the minute of its meeting, which is issued to both parties. There should be clear reasoning why there is a change from what the reporter has recommended. If the complainer is unhappy with that decision, they can take the matter to the Scottish legal services ombudsman as a handling complaint. Under the bill, if we were dealing with a conduct matter, that would still happen: the complainer would be able to take the matter to the new commission, which would be wearing the current ombudsman's hat.
Let us say that a committee rejects a reporter's findings and the client goes to the ombudsman, who agrees with the reporter. Does the Law Society on occasion refuse to implement the recommendations expressed by the ombudsman?
I think that I am right in saying that, if you read the ombudsman's reports of the past few years, you will find that in more than 98 per cent of cases we have accepted the ombudsman's recommendations. If we do not accept those recommendations and the ombudsman thinks that a decision is unreasonable, she has the power to publicise that view. I think that I am correct in saying that during the previous ombudsman's five and a half years in office, there was publicity of matters in the national press on only three or four occasions. We accept most recommendations.
When the professional conduct committee judges that individuals are guilty of professional misconduct, which you said meant being dishonest or lying to a client—Mr West gave us other definitions last week—are such individuals always prosecuted at the tribunal?
Current legislation says that the council of the Law Society may prosecute—it is not required to do so—and circumstances could arise in which the professional conduct committee decided that, for good reason, a solicitor was not to be prosecuted but the conduct would be noted on their record, so that if it recurred, the matter could return to the committee for further consideration. However, I think that in fewer than five cases last year was a matter noted rather than prosecuted.
So in some circumstances, although the Law Society finds an individual guilty of professional misconduct, no disciplinary action is taken against them.
That is incorrect. The society has no power to make a finding of professional misconduct. If the professional conduct committee believes that professional misconduct has taken place, it can send the matter to a fiscal to prosecute before the independent tribunal, which decides whether there was misconduct. Alternatively, if the professional conduct committee decides not to prosecute a matter that may be misconduct, it can merely express the view that behaviour appears to be professional misconduct
In the early stages of the process, which you described, a complaint is referred to the solicitor who dealt with the client. Does the complainer see the solicitor's response?
The complainer normally sees the response, unless the complaint is made by somebody who is not the solicitor's client. In those circumstances, issues of confidentiality can arise so, with the ombudsman's assistance, we have developed a procedure under which the response would not normally be copied. However, if the complainer is the solicitor's client, they will see the solicitor's response.
That answer is helpful.
I will add to Mr Yelland's earlier description of the process. One recommendation that the Justice 1 Committee made some years ago was that the Law Society should create firewalls, which are what Mr Yelland described. Prosecutions no longer go through our council—that was an important piece of governance redesign that we put in place to keep prosecutions within the ambit of 50 per cent lay representation.
Bill Butler will ask about ECHR compliance, which has been mentioned.
Whether the new commission is ECHR compliant is an issue. The Executive and the Presiding Officer say that the bill complies with the ECHR, but Mr Clancy said that, because of provisions in paragraph 2 of schedule 1 on appointment, removal and remuneration and because of the ability to give directions of a general character, the Law Society felt—having obtained an opinion from Lord Lester—that the commission would not be ECHR compliant as it would not be an independent and impartial tribunal. For the record, will you summarise all the changes that the Law Society thinks are needed to make the bill ECHR compliant and to help the Presiding Officer and the Executive out of the quandary that you think they are in?
As the committee knows, I am always here to be helpful. I will try my best. You are correct: ministers and a Deputy Presiding Officer certified that the bill complied with the ECHR.
I take it that the Deputy Presiding Officer did so in the Presiding Officer's name.
The Parliament's officials have taken that view. What the Law Society has presented to the committee is an opinion from a leading Queen's counsel who has great experience of ECHR matters. You might say that that just means that there are other opinions—sure enough, there are. When the society spoke to the Executive in the latter stages of last year, without the benefit of the opinion of Lord Lester of Herne Hill QC, we came to the view that any structure would have to be compliant with the ECHR. I do not need to rehearse for the committee the necessity for any measure that the Parliament passes to comply with section 29 of the Scotland Act 1998 or with section 6 of the Human Rights Act 1998—the committee knows that only too well. However, there are always views and notwithstanding the fact that my colleagues and I, in discussions with Executive officials, made the point that any new structure would have to be ECHR compliant, the bill was presented to Parliament in the fashion in which it appears before us today.
Such as?
The issues of independence that I spoke of could be dealt with by further insulating the commission from political interference or the possibility of it. There might be a role for the Judicial Appointments Board for Scotland, the Parliament or the existing judiciary to become involved in appointments to the commission. After all, if it is going to exercise the powers of a court, it might fall under the jurisdiction of the court.
Obviously, you are saying that the Law Society supports having an external right of appeal.
Yes.
In that case, what do you make of the view of the Scottish Law Agents Society that such a right would be costly and cause unwelcome delays and that it would be preferable to focus on addressing the independence of the proposed commission to make the bill ECHR compliant? In other words, it is the independence of the commission, according to the Scottish Law Agents Society, that is the nub of the matter and not an external right of appeal. Does the Law Society have a view on that?
With the best will in the world, it is not for me to battle with the Scottish Law Agents Society over this committee table. I can do that privately in the corridor outside after the meeting.
I am asking only for an opinion, not a full-scale war.
You know me; I am not into full-scale wars.
I am a pacifist myself—on certain occasions.
I am quite prepared to express my opinion on some things, but I am not sure that this is one of them. If the question of independence is resolved, it will reduce the importance of external appeal. However, an external appeal is the best way to be 100 per cent certain that the bill is proof against all possibility of challenge.
I think that you are saying that, although having an external appeal might be the best way it is not the only way, and that if the independence question were resolved, that might be acceptable to the Law Society. Is that what you are saying?
There is another element to this, which is the public's right to appeal. I make it very clear that we do not think that it is just the solicitor who requires a right of appeal.
What would the Law Society see as an ordinary appeal process without going to a full-blown judicial review?
I can help you with that. We discussed that point because it is no good saying, "There isn't an appeal," full stop. It is helpful to come up with some ideas.
Is a licensing appeal through local government really analogous to what we are discussing?
The type of work is not analogous, but the procedure could be. That procedure is quick and it is not expensive for the parties.
We consider the sheriff court to be the proper forum because of its local nature, which assists the public.
I want to be clear about the recourse to the courts as set out in the bill. The point at issue is the appeal by solicitors, rather than by members of the public, who can go to court if they so choose. Is that correct?
No. We think that both the solicitor and the public should have an equal right of appeal. Either aggrieved party should have a summary right of appeal.
But is it the case that the bill would allow members of the public to appeal to the court, but not solicitors?
It is not an appeal to the court. Members of the public could take an action for negligence to the court, but a solicitor is effectively disfranchised from his or her rights under article 6.1 of the ECHR to have an independent and impartial tribunal to deal with a civil right or obligation. That is the problem. The commission would not be an adequately independent and impartial tribunal.
Lord Lester received information about other quasi-judicial bodies in Scotland before he wrote his opinion, paragraph 15 of which states:
When I gave Lord Lester his instructions, I did not speak about a general tour d'horizon of disciplinary systems in Scotland. We talked about the system of regulation of solicitors.
Right. Paragraph 15 talks in general terms about
Of course, the fact is that those arrangements are proof against the ECHR. In the past few years, the cases of Robson and Thomson v the council of the Law Society of Scotland have clarified beyond doubt that the discipline tribunal processes are ECHR compliant.
I want to return to Bill Butler's point about what would be required to make the bill compatible with the ECHR. Lord Lester is clear that simply changing the independence of the membership of the commission would not be sufficient for his opinion on compliance to change. He states that there would have to be a right of appeal against the commission's decisions.
That is correct.
So his opinion will be the same, even if there is a compromise on the membership of the appeals committee or the commission.
Independence would go only so far. For the body to be fully compliant with the ECHR, it is important for there to be a right of appeal. I am sure that Lord Lester would be happy to explain that personally to the committee, if members wanted to invite him.
How much would he charge?
That would be for the committee to negotiate with Lord Lester.
Last week, the committee heard evidence from the bill team. We pressed them on the apparent inconsistency in the bill that solicitors will have the right to appeal against the commission's decisions, but the general public will not. Perhaps you can shed light on the current circumstances. At present, what right of appeal do members of the public have in the Law Society's complaints handling system?
With service complaints, the public do not have a direct right of appeal, although they have the right to refer a handling complaint to the Scottish legal services ombudsman. In some of the ombudsman's annual reports, she has expressed concern that many people have gone to her with the view that they are appealing, whereas the ombudsman's office does not have a power to take appeals. In a service case, the solicitor has a right of appeal to the independent discipline tribunal against a finding of inadequate professional service, which could involve an award of compensation or a refund of fees.
I want to ensure that I understand the matter clearly. With service complaints, the general public have no right to appeal decisions, but the solicitor has that right.
That is correct, at present.
I am concentrating on the present. With conduct complaints, the Law Society of Scotland, in one guise or another, steps into the shoes of the member of the public and carries out the prosecution. The solicitor has the right to appeal, but the member of the public does not have the right to appeal in their terms, because somebody is standing in their shoes. Therefore, in effect, under the current system, members of the public have no right of appeal in either category of case. Under the bill, the public will have no right of appeal, either. That is something that we need to address.
That is right.
We will now consider the financial impact on the legal profession of the proposals.
One concerning aspect in the submissions are the comments on the bill's potential to force certain categories of solicitor out of the market. We have received lots of written evidence on that matter. I will read the evidence from one firm, although I am not sure whether this is a matter of public record, so I will not mention the name. It states:
No direct research has been done, because clearly there has not been enough time between seeing the bill for the first time and giving evidence today.
We are in danger of conflating three components—the bill procedures, the levy and the type of work. However, as you have said, you have done no research on any of them. There has obviously been time to obtain legal opinion but not enough time to do research among your members.
There is a great distinction between obtaining legal opinion, which can be done quite quickly, and doing meaningful research.
Let us leave to one side the complaints levy, which the committee will come back to when considering the financing of the proposed measures. If a firm of solicitors is operating with difficult clients in a difficult area or in an area where provision is sparse, and if the firm is good and has a record of providing good services, complaints will not start to come in from its clients just because a new commission has come into being. The firm's profile will already exist. That is why I was asking about research. I was hoping to hear that you had profiles of firms already, with information about the types of firms and the types of cases that led to complaints. I had expected you to have that information and to be able to tell the committee about it.
We can certainly assist the committee with that because we will be able to get that information from our own records.
Mr Purvis, when you said research, I took you to mean had we gone out to the profession, asking them about that subject. We have more information, but we have not gone to the profession and said, "Here are some questions for you." I misunderstood what you meant by research. The fact that the committee has had quite a few responses from the profession probably gives a view of the profession's feelings on that area.
To give the committee a brief snapshot, the most common complaints that we get arise out of litigation and tribunal work, where there is a winner and a loser. Many of those cases—not all—arise because the person has lost. Some arise because the people who won did not get the result that they wanted. Ten years ago, it was different; conveyancing was the main cause of concern. If the committee wants more detailed information on that we would be more than happy to provide it. There are also issues about the size and types of firms. Again, we can provide that information to the committee if that would assist it.
I wonder whether Mr Clancy would come back on the appeals point that was mentioned earlier.
Colin Fox said earlier that the complainer did not have an appeal under the structure proposed in the bill. Philip Yelland might have been answering a question about our current system rather than the structure proposed by the bill. In fact, the complainer does have an appeal under the bill. Schedule 3 sets up the appeals committee and the process for dealing with that. Paragraph 1(g) of schedule 3 makes provision
I am grateful to you for pointing that out. A level playing field is to be welcomed.
You seem to be opposing the increase from £5,000 to £20,000; you said that £20,000 was a disproportionate amount. Why should not an aggrieved client be compensated at an appropriate level, if the appropriate level happens to be £10,000, £15,000 or £19,000?
They already are, under the existing system. They already have the right to sue the solicitor for negligence and to recover exactly what they are entitled to.
So your view is that we should put them through a lengthy and costly process in the court.
There are many difficulties if we compare the perception with the reality. We have already conceded that the perception of how a client has been handled can be forever damned even if the reality is solid. There are one or two fundamental misconceptions about the master policy, so I am glad that we are dealing with the matter.
Yes, but the question is why people should have to take that second step, whether through the court or by dealing with the matter before it goes to court when a compensation level of above £5,000 is appropriate. Surely it would be simpler and fairer to deal with the matter at the first stage rather than have to go through supplementary stages.
There are not really any supplementary stages. Some people pursue their own claims against the master policy, but most people will go to a solicitor, who will advise them that they may have a claim for negligence in addition to an inadequate professional service claim. Philip Yelland said that we have a system for dealing with that. Therefore, there is no additional hassle for the client.
That is right. The maximum compensation is £5,000 under the current legislation. We can take on the complaint, deal with it and award up to £5,000. If a person wants to pursue the matter further through the courts, they can do so. The only thing that would then happen is that any compensation that we have ordered the solicitor to pay will be taken into account in any final settlement, which is clearly just and reasonable. That approach has been taken for around five years. Previously, we told people that they would have to pursue matters through the courts, but we no longer do so. As a result, in a number of cases we have dealt with the matter and somebody has then made a judgment about how much more money they think they should be entitled to and whether they should take the matter on from there.
If you disagree with the figure of £20,000 for the maximum level of compensation, what do you think would be a fair level? Is £5,000 fair? Should the figure be somewhere between those two figures?
The £5,000 limit has only just been introduced. We have been making awards of up to £5,000 for only a year or so. My difficulty with the proposed figure is that it has come straight out of the Department for Constitutional Affairs in England and is designed to reflect the English figure. However, there are big differences in the earning power, structure and so on of the professions down south and up north. The fact that 400 or 500 consultation responses have been received from the profession indicates that it sees the proposal as an unnaturally high leap within a very short period of time.
It might help Mr Maxwell to be aware that since we got the power that we are discussing in April last year—the power applies only to business from then onwards—the highest compensation award that we have made is £3,200. There have also been a couple of awards of £2,000, but we have not yet made the maximum award of £5,000.
Given those figures, it sounds as if you are not sure why you are afraid of the change. However, will you clarify one matter before we move on? The danger to firms as a result of the possible size of compensation awards was commented on. I think that it was said that firms would not do the work or that they could be forced out of business. I was not sure that I had picked up correctly what was said and wondered what was meant. Is that what was said? I assume that firms would be insured for any awards that are made against them and am therefore not sure how they would be forced out of business.
You are probably referring to what I said. I think that clients will suffer more than solicitors. The proposals might result in certain geographical areas of Scotland being unable to get solicitors in the same way that they cannot get dentists.
That is the nature of all insurance policies. If someone has a prang in their car or their car is stolen, their insurance premium goes up.
Absolutely. The master policy and professional indemnity insurance in general are no different from that. It is not as if there is a panacea.
I do not want to hold up the discussion, but it would be helpful if we could get further information about how the insurance policies work.
I know that Maureen Macmillan has a particular interest in the master policy and the guarantee fund. When we hear the answers to her questions on that subject, we can decide whether we need to ask for more information.
You said that only about 1 per cent or 2 per cent of cases go to court and that somebody makes a judgment about that. Who makes that judgment? How is the quantum worked out? Is it done between the solicitor for the wronged side, as it were, and the insurance company?
It is worked out in one of two ways. A claim will be lodged with the broker, which will pass it on to the insurers. RSA, which is the lead insurer, will handle most of the claims. Most of the time, it will handle the claims in-house, using its own staff. However, claims of larger value and more complex claims are likely to be passed to panel solicitors, who have a set of claims-handling obligations and so on. As with most claims, whether they are to do with a broken leg or a damaged car, these claims will be established between the two firms of solicitors.
Do you agree that the fact that the claims are established between the two firms of solicitors gives the impression that the system is very cosy and that the amounts of money that are being awarded are being depressed?
That is not my impression or the impression of the legal profession. I do not think that there is any evidence that would bear out any assertion that the settlements are unnaturally depressed. I am sure that RSA and Marsh would be happy to give you written or oral evidence to that effect.
It is useful to have that view out in the open.
It is not a question of trust. From a standing start, the new commission will have to acquire an awful lot of experience to determine who or what is a vexatious or litigious complainer, and to get some idea of what is commensurate and proportionate. Our worry is that the amount of any award has to be determined using such aspects of the law of negligence as foreseeability and a duty to minimise loss. Currently, amounts are ultimately determined by recourse to the court. If a claimant feels that he has been offered a ridiculously low amount of money, he has the facility to go to court, but that facility will not exist under the proposed commission.
Do you feel that there will be a lack of expertise in the commission when it starts?
Any organisation would find it difficult to come up with expertise from a standing start. At least we have the advantage that we have been doing this—or a variant of it—for about 57 years, but it will take a while for the commission to build up expertise.
There has been some evidence that there are unacceptable delays in getting claims processed through the master policy. Do you accept that? The fact that there are undue delays is the reason that is suggested for giving the complaints commission oversight of the process.
I do not accept that and I do not think that there is any evidence that that is the case. The situation is dealt with in the Marsh and RSA responses, to which I have referred. I do not think that the evidence goes beyond what the Scottish Consumer Council's submission calls anecdotal evidence. There is no solid evidence that there is any delay. It is simply not in the interests of any party throughout the chain of master policy to delay things. The committee should realise that there is nothing more stressful for a solicitor than having a negligence claim against him or her. They want it to be dealt with as quickly as possible.
I have two brief points. I will focus on the current £5,000 compensation level and leave aside the £20,000 completely. One of the remedies that are available to the Law Society in disposing of a complaint is to order the solicitor to charge the client no fee. You have already said that the maximum compensation that you have declared so far is £3,200. Have there been occasions when the penalty that was levied against the solicitor might have been more than £3,200 by virtue of the fact that the solicitor had to do their own work?
Yes, that is quite right. There have been occasions where the combination of an award of compensation—even under the limit of £1,000—and an order to refund all fees or even a significant part of a solicitor's fees has far exceeded that amount.
Is it fair to say that there have been occasions where the total has exceeded the current £5,000 limit?
Oh yes. I can certainly think of occasions when that has happened. The biggest refund of fees that I can think of was somewhere in the region of £24,000.
Right. That is clearly beyond the penalty proposed in the bill.
Last year, the average compensation payment was £474. A total of 452 compensation awards were made last year. There was an abatement of fees in 168 cases. In 14 cases, we asked a solicitor to do something to rectify matters, and there were 31 cases in which we asked the solicitor to do something else. For example, if a solicitor has not wound up an executry very well, one of the options is to instruct the solicitor to give it to someone else to finish off. The second solicitor finishes off the case and the original solicitor has to pay for it. Obviously, each year is different. If the committee wants more information about that, we will be happy to provide it.
Just to clarify, my maths shows that half of the complaints resulted in a disposal along the lines of ordering a solicitor to do extra work, and so on.
Of the matters that go to committees, it is fair to say that something like 30 per cent result in an inadequate professional service award.
Thank you. I am grateful.
I wish first to ask a supplementary question following on from something that Maureen Macmillan raised. Mr Mill was definitive in his rejection of the notion of any delays at all to claims against the master policy or the guarantee fund. Given the evident complexity of some negligence cases, I find that line hard to swallow whole. Having not yet ploughed through all 600 submissions—although I promise faithfully to do so—I would ask Mr Mill to indicate the average time taken and the longest time that it has taken to resolve a case.
I simply cannot do that, but I know who could: the Royal & Sun Alliance, the lead insurer. It is the claims-handling body. I will define my terms slightly more accurately. I am saying that undue delay on the part of the lead insurer or its panel solicitors does not particularly happen, rather than that there is no delay at all.
Of course, the Law Society does not handle the negligence complaints that are made against the master policy. Those complaints go to the insurer, and the Law Society does not deal with them. There is nothing that we can do at that end of things that can be overseen.
I understand that. I was just concerned that a definitive statement had been made. The matter has now been clarified. There could be a delay, but it will perhaps not be an undue delay. That is excellent—I like to understand things.
I am interested in what the witnesses have just said about the Law Society having nothing to do with the arrangements for handling negligence claims. I have in front of me a memorandum in connection with the case of one of my constituents. It was issued by Mr Mill on 5 July 2001. I do not know whether it is available among the committee's papers, but I know that the convener has a copy. I am happy to pass it on.
The committee has it.
That is fine. Mr Mill's memo was written to the then president of the Law Society, Mr McAllister. It refers to the broker of the master policy. Mr Mill suggests that it would be good if he and the others involved all got together and had a "summit meeting" to discuss how to dispose of my constituent's "several valid claims". Mr Mill and I have discussed the matter at length over the years, but I find that a rather strange memo if it is to sit comfortably with the statement that the president has just made.
For reasons that are clear, I will ask Mr Mill to answer that. That was before my time.
Mr Swinney and I have indeed discussed this matter on several occasions over the past few years. I would say that it goes a long way towards proving that we do not dabble in individual claims. I will go on oath and on record, and I will swear on my granny's grave, that never once have I, any member of my staff or any office-bearer dabbled in a claim.
The memo of 5 July encourages
I really feel that I require to respond to two of the points that were made. If the claim remains unresolved, it is a matter for Mr Mackenzie and for the guarantee fund. There may be a plethora of reasons why the case remains unresolved. In the inquiry that he made to our fairly recent president, Mr Mackenzie raised a mix of issues. From the client's perspective, it can be difficult to separate out claim issues from matters of complaint. It is perfectly valid for me to inquire of Philip Yelland and his team whether Mr Mackenzie has complaints and, if so, whether they are being dealt with expeditiously. That is very different from dabbling in the merits of the case, which we would never do. I give my personal assurance to the committee that that is and will always remain the case.
Obviously, the committee is not in the position to arbitrate in the matter, but that has now been put on the record.
I return to the matter of the £20,000 limit. I will be brief. I understand that if someone goes to a court on a point of negligence, for example, there is no limit to the compensation that the court can decide.
None whatever. The court will recompense to the full value of the claim.
That is helpful. In our oral evidence taking and in the written submissions, we have heard that insurers could use the bill as a threat to put up insurance premiums, which could cripple small firms, especially those with tight margins. However, surely insurance would also be against the prospect of complaints being made to the commission.
I do not think that it would, because the reason for the significant increase in the number of complaints over the past two or three years comes down to complaints about the profession's alleged mis-selling of endowment policies. Those complaints will come to an end in the next two or three years. If the figures for those complaints are stripped out of the totals, there is still a small percentage rise in the number of complaints that are received each year, but it is nothing like the percentages that are in the annual report. We can provide the committee with information on the number of endowment complaints, if that would be helpful. Although those complaints have skewed the figures, it is also fair to say that most financial services regulators are suffering the same difficulties.
We would be grateful if you would do that.
I will be brief. Nobody will need to swear on their granny's grave to answer this question, which is on the complaints levy. We heard from the bill team last week that, irrespective of whether a complaint is upheld, a complaints levy will be charged. We were told that the reason was to remove the financial incentive for the commission to charge solicitors inappropriately. What is your view of that and how would you fund it?
I noticed that the Executive said that it did not want to find that the commission felt obliged to try to uphold complaints. That was an extraordinary thing to say about a commission; it suggests that it will not be able to make its own decisions.
Thank you. That was clear.
We have always agreed that other providers can provide as good a service as the one that solicitors provide. Our difficulty with the bill is that it proposes a case-by-case funding system, which we do not think would be practical for the other providers. You will note from our submission that we favour a grant or contract-based system. We have no difficulty with non-lawyers receiving funding.
I have a supplementary to that. We are concerned about the fact that the bill will not create a level playing field. The bill does not make it clear whether such new registered advisers, who would be paid by SLAB, would be covered by the new commission. Given that solicitors and advocates will be covered by the commission, it would be extraordinary if the new, subordinate level of adviser that is being created was not.
It is fair to say that yours is not the only organisation that has drawn attention to that issue.
I return to the idea of a general levy. If the bill's proposals are implemented, does the Law Society plan to reduce the cost of the practising certificate for solicitors?
We probably will reduce it, simply because about 50 per cent of the work of the client relations office will be reconfigured. Although that cost might well reduce over time, the reduction will in no way reflect what the additional cost of the commission will be. There may be a £50 to £60 saving on the practising certificate fee, whereas we calculate that the economic impact of the commission on the average solicitor may be about £500.
Are the estimates that the financial memorandum makes about the number of staff that the commission will have either too large or too small? Mr Yelland is probably best placed to answer that.
The difficulty is that it is hard to tell from the bill and the financial memorandum exactly what the structure will be. When you asked Executive officials about that at last week's meeting of the Finance Committee, you obtained some helpful information. My concern is that given that individuals with relatively small case loads will be doing the work, the estimates for the number of staff and therefore the overall salary costs are probably on the low side.
We followed Mr Swinney's questioning. We have a range of financial concerns about the commission, one of which relates to the fundamental lack of financial accountability. Any suggestion that the fact that the commission will refer its budget to the professional body once a year amounts to adequate control is nothing short of daft. We think that a body such as Audit Scotland must have a role to play. Many of our members are exercised because at the moment it looks as if the new body will be able to write itself a blank cheque, without being accountable to Parliament, the Executive or the profession that will fund it, either wholly or principally.
I have no doubt that, in time, the Finance Committee and perhaps even the Audit Committee will comment on that.
Meeting suspended.
On resuming—
We now move to the second panel. I welcome Valerie Stacey QC, the vice-dean of the Faculty of Advocates. She is supported by Carole Ferguson. Would you like to add anything to your submission on behalf of the faculty?
No. I will introduce my colleagues. As you said, I am the vice-dean of the Faculty of Advocates. I am supported today by Carole Ferguson. She is not a member of the Faculty of Advocates but is a member of our staff who is here to assist me with my papers. I was going to bring Kenneth Campbell, who is a member of the faculty, but unfortunately he is in court up the road, so I have brought Carole with me.
Someone has to be there.
Yes. Someone has to mind the shop.
I can assure you that you were invited here to represent the Faculty of Advocates because we recognise the differences between the professions and their different roles and methods of operation.
We say that because we think that it is vital that, as a society, we have independent lawyers; that is, lawyers who are independent of the executive and who will represent their clients without fear of any consequence that that might have for the lawyer. What the Scottish Executive proposes in its bill would, in effect, end that independence and mean that the executive would have some control over the profession. Our view is that that would not be a good thing for clients because it is important that a member of the public who becomes a client can go to an advocate—through a solicitor, as members will know—who will represent them whether or not their case is attractive and whether or not it is a case that the advocate can see is likely to annoy or go directly against the executive. It is important that a client can find a lawyer who is not in any way controlled by the executive.
Do you feel that there is any need for an external review of the procedures or external guidance on them?
We certainly feel that there is a need for the lay members that we have. We are pleased to have them and we feel that they are helpful.
You said that you, or a member of the faculty, might chair a committee, but that you would have no casting vote. How would you come to a decision if there were two votes each way?
In such situations, in which we have been, we try to discuss the matter further to see whether we can all come to a view. If we cannot do so, the complaint will not be upheld.
I welcome your introductory remarks and your acceptance that the public often feel that lawyers protect one another in the complaints system. Such fears, anxieties, perceptions or perspectives—call them what we will—are part of the committee's deliberations.
Are you asking whether we might put them all together in the future?
Yes.
Would all complaints go to the commission?
Yes.
We would not be in favour of that. The faculty does not make the distinction that the Law Society makes between conduct complaints and service complaints, which I think it is rather difficult to make. I have looked at the complaints that we have dealt with recently and asked various colleagues who serve on committees whether they thought that particular complaints were about service or conduct. We have had discussions about that.
It is interesting that you say that the faculty does not make a distinction between service complaints and conduct complaints.
We do not do that in the way that the Law Society has to.
That is valuable, as is your point that if the bill is enacted, making that distinction will remain difficult—you gave the example of delays in court. Would the faculty not oppose putting all complaints together if the profession continued to examine complaints? You are against putting complaints together if the commission considers them together, but you would not be against that if the profession considered complaints.
Essentially, that is what we do at the moment. We simply receive and deal with a complaint, without spending too long thinking about what kind of complaint it is.
That brings us back to the beginning. What you describe is what you do at the moment, but that involves a system in which the public have little confidence.
I hear what you say. I have said that I accept—as I must, from reading newspapers and so on—that some people say that they have no confidence in lawyers. As it happens, such comments are mostly about solicitors, but that is simply because there are far more of them. I am not trying to say that there are no people out there who say that they have no confidence in advocates, because I am sure that there are.
My final point is designed to obtain some free advice from a QC. You think that QCs cannot work out the distinction in the bill between conduct complaints and service complaints, so whoever takes on the duty of establishing that in due course will have a hell of a problem on their hands. Is it fair to say that?
That is what I am saying.
Great. Smashing.
That could have been construed as a leading question, Mr Fox.
In response to questions from the convener and Colin Fox, it is clear that your main concern is independence.
That is my major concern, although you will appreciate that I have other concerns.
Could the bill be amended to deal with that concern effectively? Is the concern caused by the fact that ministers will appoint members of the commission? We discussed with the Law Society other possibilities that would create a more independent commission.
Ministers will appoint members and will be able to get rid of them. One very wide provision says that a person can be stood down because they are thought unsuitable.
Do you object to the creation of the commission per se or to the creation of a commission as envisaged in the bill, because of the perceived possibility of political interference?
I am sorry; I understand the question now. The objection is to the commission as it is described in the Executive's bill. It is unsuitable. The faculty says that the profession ought to deal with complaints, but we understand that people for some time have had the ability to approach the ombudsman if they think that a complaint has not been handled correctly. Our suggestion was a little more radical—it was to have an appeal to a completely independent body, which would take only appeals. Complaints would stay mainly with the profession but an appeal to a completely independent body would be available. That is a long way away from what is suggested, especially for the Faculty of Advocates.
Earlier, in response to either Stewart Maxwell or Colin Fox, you said that the complaints commission will not be able to deal with conduct cases, but you said later that appeals to an independent body would be a good thing. I presume that that independent body could deal with conduct cases. I am not sure why you think that an independent appeals body could deal with conduct cases, whereas the commission could not.
That body would deal with appeals only. There would be a funnelling up, so there would be far fewer appeals than conduct cases.
Yes, but basically you are talking about lay people dealing with conduct cases.
I beg your pardon, but I was not.
Perhaps you could elaborate on who should be on the appeals body.
It would be essential to have lawyers on it. We suggest a mixture of lawyers and lay people. Our point is not that we should have lawyers on it to protect other lawyers, although I appreciate that Mrs Macmillan is not arguing that that is our aim. The point is that a person needs to know what lawyers are supposed to do before they can make a sensible decision about whether a lawyer did something well, badly or indifferently.
Indeed, but there must be a trade-off between that need and the need for transparency, so that the public agree that complaints are considered properly. One of my concerns is that, as you said, a large proportion of the complaints against advocates are about conduct. If they are seen to be dealt with by the Faculty of Advocates, the public might not perceive that to be transparent.
To be frank, we need more than just a perception that the process is transparent. The lay members that we have do not simply give the impression that they are involved—they actually are involved and they are useful. I accept that some members of the public will say that the complaints are really dealt with by the Faculty of Advocates, because the complaints committee meets in the faculty's premises and the chairman is the vice-dean of the faculty. I understand that people will wonder how independent that is, but actually, half of the members are lay people.
I agree, but I am talking about perception. The fact that there are many conduct cases might lead people to think that the complaints committee is not doing a good job of impressing on other members of the faculty what good conduct should be.
I cannot agree with that. Although I would like there to be no complaints at all, it would not be fair to say that we have a lot of complaints. There have been 47 in each of the past two years, but let us say that the figure is about 50 a year, which is a little higher than the actual figure. Given the number of practitioners and the type of work that we do, I cannot agree that that is a lot of complaints. It is hard to say what would be a lot of complaints, but I cannot agree that we have a lot.
How do you appoint the committee's lay members?
They are appointed by the Executive. I do not know the nuts and bolts of the process, but we end up with a list of people and simply have to see who will be available for service on a particular day.
Are you quite happy to accept that input from the Executive—which basically amounts to Government telling you how to operate some of your systems—instead of from an independent body?
I am happy to accept the list that the Executive produces. However, I do not think that it is necessarily telling me what to do.
So it is not directing you.
No.
You have been very fulsome in your praise of the lay members who sit on your committee. However, in your written submission, you oppose the establishment of the new commission because you think that it will
The bill does not make it clear exactly to whom the complaints will be delegated. I might be wrong but I do not imagine that, given the terms of the bill, the nine proposed commissioners—four lay representatives, four legal representatives and a non-legal chairman—will sit as a nine-member committee to hear every complaint. The only provision in that respect simply allows the commission to delegate its work to any person, and there is no suggestion that the person to whom the work is delegated needs to be qualified in anything.
So you are concerned by the fact that you are unsure or unclear about the process of investigating complaints.
I am unclear about that, and I am troubled by it.
Earlier, you said that the committees in the current system comprise two lawyers and two lay people. However, in response to the convener, you also said that, if there is a split decision and agreement cannot be reached, the complaint will not be upheld. Is that correct?
Yes.
But is that not the crux of the problem? Under your current system, the legal profession effectively has a veto, because the two legal members of the committee can block any complaint simply by refusing to reach agreement. I am not saying that that happens, but do you not appreciate that, given the problem of perception that others have highlighted, it would be appropriate for the commission to have a non-legal majority?
I appreciate that you could, in theory, say that and I understand the importance of knowing what could happen under a system of rules, even if it never does.
Thank you. You seem to be concerned about a lack of expertise among commission members.
Yes.
Although the lay members might not be legally qualified, do you not think that they would have an appropriate background to serve on the commission and that they would have skills and expertise in areas that cut across many different professions, which would give them the ability to be effective on the commission? Also, it would not be necessary for them to have a legal background, as some members would have to be lawyers, so a lack of legal expertise would not be a problem.
I disagree; I think that it would be a problem. It would be a problem in other professions too. If I wanted to know whether my doctor had treated me negligently, I would not ask an accountant; I would ask another doctor.
I appreciate that: that is why the lawyers would be on the commission. Surely there are common standards for the type of service that would be offered?
Perhaps I can put it this way: I do not mean to be pejorative about anybody other than my own members, but some regulation equates to a file check. That might be the case with some complaints against solicitors. It might also be the case with the Financial Ombudsman Service. It can be asked, "Did you tell the client such-and-such? Did you give them a particular leaflet? Did you give them an explanation of something in writing?" and boxes can be ticked to show whether those things were done.
I will bring in Bill Butler to raise the ECHR issue.
Ms Stacey, I will not begin with ECHR; I will lead up to it. In your introductory remarks to the committee, you said that the bill would end the independence of the profession. A little later on, you said that it would very much weaken the independence of the profession. Which is it?
I do not think that something can be a bit independent—it is either independent or it is not.
That is my point. Are you saying that the bill would end the independence of the profession or are you resiling from that and saying that it would weaken it?
I am saying that it would end it. There are no shades of independence—you are either independent or you are not.
I am grateful for that, because you said both things, so I wanted to sort out which it was.
I am sorry about that.
That is fine. Are you saying that you are against the proposed commission as it is described in the bill? Are you really saying that the bill is not open to remedial action?
Amending the bill to make it ECHR-compliant would turn it into a different bill.
It would be the bill at which you hinted when you said the process should be as it is now with the Faculty of Advocates and that there should be an appeal to an independent body. Is that what you would prefer?
Yes.
However, given that your preference is not contained in the bill, and we are looking at the bill today, let us turn to it.
There would need to be an appeal to something other than an internal appeals committee—either a court or a body that has the vital characteristics of a court.
What about remuneration, appointment and direction of a general nature? Would they all have to be elided?
It would depend upon who did the appointing and what the rules were on appointment to the commission.
Would you prefer the appointment system to use a list? You seemed to be content with that when you talked about the lay people who are part of the process that you described. Would that address your concerns about appointments? In other words, individuals would not be directly appointed; there would be a list.
No. The individuals whom we have as lay members are a part of our system of regulation, but they are not the system of regulation. That is the difference.
On the external right of appeal, I will ask you the same question that I asked the Law Society. What do you make of the Scottish Law Agents Society's view that a right of external appeal against a decision of the commission would be costly and cause unwelcome delays, and that it would be preferable to focus on addressing the independence of the commission? Do you agree with that?
The two go hand in hand. In order to have an independent body—whatever we might call it—you must have a right of appeal. The commission would, at least in part, determine civil rights and obligations. In order to do that, it would have to be independent or there would have to be a right of appeal to an independent body. If I understand you correctly, the two go hand in hand.
I am a lay person, so you will have to bear with me, although I am sure that you are used to lay people within the process that you have described. If the Executive said, "Okay, we have listened, we have reflected and we are going to introduce an external right of appeal," would that satisfy you, or would the whole bill have to be changed according to the concerns raised by Mr Clancy and the Law Society?
I did not hear everything that Mr Clancy said, but I can say—
He talked about schedule 1 and issues of appointment, removal, remuneration and directions of a general character. I think that I have got it right.
I agree with him that all those matters are important. Just having the independent appeal body would not cure the ECHR contraventions that we have identified.
So, in your opinion—speaking for the Faculty of Advocates—everything would have to be changed. In other words, there would have to be a new bill.
That is what I said. It would look like a different bill altogether. The problems cannot be cured simply by having an independent appeal.
So we could not cure the bill; in your view, we would just have to kill it.
I suppose that that is what I am saying—start again.
I turn to questions about the complaints levy. You were listening earlier. In essence, there seems to be a choice between the Executive's view, which is that the complaints levy should be levied on all, irrespective of whether complaints are upheld, and the view that emerged earlier, of a polluter-pays principle. What is your view of those options? Do you have an alternative mechanism?
The Executive's suggestion is unfair. Let us take the illustrative amount of £300, which I appreciate is just an illustration. If a complaint was made and was found by the commission not to be vexatious or frivolous—which would be quite difficult for the commission to determine—it would proceed. Even if the complaint was found to be completely unfounded, members of the Faculty of Advocates would have to pay the £300. That does not seem fair, and it might have unfair consequences. Members of the Faculty of Advocates range from those who are quite young and are just starting out on their legal careers to senior QCs. It is not a case of the polluter paying, for the reasons that you have been given already.
Does it not strike you as slightly odd that, in everybody's desire to have independence, they are willing to have the Executive fund the proposals, at least partly?
The Faculty of Advocates proposes that it continues with funding most complaints against its members, with the possibility of independent appeals. We do not expect there to be an appeal in every case; there are always fewer appeals than there are cases at first instance. The majority of complaints handling would continue to be done by the Faculty of Advocates, which we, as members of the faculty, effectively pay for. Those who sit on complaints and investigating committees—counsel also investigate complaints—do so voluntarily. We have staff, whom we of course have to pay, who do various things for us, not just complaints. Complaints are handled at no cost to the client, however. We do not charge people for making a complaint. We pay for it ourselves. I do the work for nothing.
Likewise.
You seem to be telling the committee that you are opposed to a complaints levy, for the reasons that you have outlined. Do you support having a general levy as well as public funds, or are you saying that there should not be a general levy at all and that everything should be paid for out of public funds?
It depends what the Scottish legal complaints commission is going to do. If it is to be the commission as proposed by the Executive, it will be funded by the profession. The Executive says that it will take complaints away from us, so we will have less to do in that regard. I think that the Law Society witnesses said that that might be true for them—I think that Mr Mill said that about 50 per cent of his staff could be deployed doing things other than handling complaints—but it would not be true for us.
Even if very little is done, how do you suggest the work should be funded? The Law Society suggested that, according to its figures, £400,000 would be saved by winding up the office of the Scottish legal services ombudsman.
That is right.
Are you suggesting that that would be the source of funding for the new commission?
Yes, that would be one way of funding it.
So there would be no levy of any kind.
Yes. That is Government money. If there is to be public regulation, as opposed to our private regulation, it should be funded publicly.
My questions are about negligence and claims and the new maximum compensation level of £20,000, as discussed by the previous panel.
This might sound pernickety—forgive me if it does—but the tribunal is not an internal committee. It is not a Faculty of Advocates committee, but a separate tribunal, headed by a judge. At the moment, that is generally Lord Coulsfield. The membership consists of counsel and laypeople. The laypeople are on a list of laypeople who are appointed by the Executive and they serve on the tribunal for five years.
That is similar to what is proposed. Your responses to Mr Butler's questions were black and white but, in your written evidence, I see shades of grey. The tribunal is not part of the Faculty of Advocates. Some of its members are counsel, but most of its members, other than the chair, are from a panel that is appointed by the Government and they serve on the tribunal for five years. We might find that, if they prove to be unsuitable to serve on the panel, they can be removed by a letter. That is similar to the proposals in the bill. To say that the bill's proposals are absolutely beyond the pale is to take a black-and-white approach but, with regard to appeals, there appears to be a halfway house.
But it would not feel like it. As I understand the bill, it suggests that the commission would be made up of nine members plus staff, and that the commissioners could delegate any of their functions. I envisage there being a bureaucratic office in which people deal with the work as it comes in. As I have said, I do not think that the first decision to be made, which is whether a complaint is vexatious or frivolous, would go to the nine commissioners.
Can we bring the discussion back to the subject of your original question, Mr Purvis?
With regard to the maximum level of compensation, which it has been suggested should be £20,000, we have been hearing about whether it would be better to allow the courts to set the amount of compensation, which could mean that there would be no limit on the amount.
I think not. There is some confusion in the minds of the bill's drafters about the £20,000. A court action in respect of negligence could be against a lawyer or it could be against a driver with whom a person has been in a car accident. It is the same type of thing. The court has to decide whether there has been negligence. Lots of negligence case law has been developed over the years. That has happened not to make work for lawyers, but because life is complicated. That is one of the reasons why law can be perceived as complicated.
We have had evidence that they would do that.
Is that so? Well, I am not surprised. I was not aware of that from the video broadcast of the meeting, but I am not surprised to hear it. Of course, we have asked the insurers what their position would be, but they have not been able to tell us definitely. Frankly, the last thing that we want to hear is that there is now this somewhat easier system where you have only got to make one claim. You do not need to make a complaint and then raise a separate court action—you just make the one claim. However, we do not know whether the claim will be covered by insurance or what will be taken into account in the claim, and we cannot predict how much a person would get. Frankly, that does not sound particularly useful to me.
Could you drop a note to the committee on the outcome of any discussions that you have with the insurance people with whom you deal?
Certainly.
That would be helpful.
Before I do so, I want to ask about the fine that has been mentioned. A fine that does not exceed £15,000 can be handed out by your tribunal. How many £15,000 fines has the tribunal handed out?
I would need to check the records. I had a look before I came here and I would be reluctant to say that we have never handed out such a fine, but I do not know of one in recent years. I could write to you about that, too.
That would be fine.
Finally, I ask you to expand on points that you raised in your submission. First, you raised concerns that complaints could be made about the quality of representation. That issue is probably particular to your profession rather than to those that are represented by the Law Society of Scotland. The second issue is confidentiality, which you mention in paragraph 56 of your submission. The committee will produce a report on its consideration of the bill at stage 1, and it would be helpful if you could explain your concerns.
I will try to do so. I am aware of the hour and I appreciate that I have perhaps taken up a lot of the committee's time.
That is clear.
I understand that you are opposed to section 45, which will enable the Scottish Legal Aid Board to pay non-lawyers on a case-by-case basis. We hear that the Executive is likely to lodge amendments at stage 2 to provide for grant funding for non-lawyers, but I assume that you would still be opposed to the provision. Would your position change if non-lawyers were subject, as the Law Society suggested earlier, to the same complaints-handling system as lawyers?
That would be better. The faculty believes that people who give out advice need to be regulated. I always say that there is more to regulation than complaints handling; there is having standards in the first place, which both the Law Society and the Faculty of Advocates have. Maintaining the standards that people are supposed to reach involves training, education and admission, all of which need to be considered. Representing people in court or giving people advice is a privilege and someone should not be doing that unless they have been properly trained and regulated in what they do. As the member has identified, our concern is lack of regulation.
Thank you for making yourself available to give evidence, Mrs Stacey. I also thank the colleague who accompanied you.
Thank you.
On our third panel, I welcome Craig Bennet, the president, and Ken Swinton, the ex-president, of the Scottish Law Agents Society. I also welcome Robert Sutherland, the convener of the Scottish Legal Action Group. I apologise for the previous sessions running on a little longer than we had anticipated—when we are getting quality evidence, it is hard to cut it short. We have to be perceived to be doing our job.
There is a difference between conduct and service complaints. Part of the essence of a profession that sets standards for itself is that it should enforce those standards as a matter of discipline. Service complaints are a different breed from those that involve conduct; I can see that Colin Fox has difficulty with that. I also heard what Valerie Stacey said on the matter.
I reiterate what our immediate past president, Ken Swinton, said. We have always been of the opinion that service complaints and the Law Society do not go together. I will explain why I say that. By virtue of being solicitors, we are all members of the Law Society of Scotland. The Scottish Law Agents Society is an independent beast, as it were. We act as a voluntary society with about 1,800 solicitor members. We have been around for a lot longer than the Law Society—since 1884—and we have acquired a considerable body of experience over that time. As our submission shows, we have thought for some time that service complaints should be taken away from the Law Society and given to a different body, whereas the Law Society should retain conduct complaints, for reasons that the society advanced today.
With professional services of whatever type, the professional body's function is to set the standard for the professional service. It determines the admission of persons into that body, regulates people's ability to continue to provide services, supervises training and generally sets standards. Given that, it is still appropriate for the professional bodies to retain control of conduct matters. If conduct matters are removed from professional bodies, that will gut an essential part of their function.
If the proposed commission had a committee whose members were split 50:50 between lawyers and laypeople, would you still feel that it could not undertake conduct inquiries properly?
If the commission did such inquiries, the reason for having a professional body would be undermined. If a professional body cannot regulate itself and its members or set standards to meet needs from time to time, as situations develop, why have a professional body?
My society has no difficulty with a lay majority to deal with service complaints. I will comment on an issue that Valerie Stacey, but not the Law Society, raised. I am not a QC or a member of the council of the Law Society; I am, in effect, a general practitioner in Dunfermline who does a bit of everything. We have only anecdotal evidence, but people at the coalface tell us, whether in pub talk or otherwise, that lay members are—dare I say it—softer and more understanding of the position that the solicitor has got himself or herself into than are solicitor members.
You talk about separating complaints on services and conduct. The convener suggests that if the committee's members were 50 per cent lawyers and 50 per cent lay members, it would still have the expertise of lawyers. The Law Society's proposal and current system is for 100 per cent lawyers. Do you see the attraction to the wider public, whom we must consider, in having the commission take conduct complaints, which would make the entire system independent? Otherwise, half of it would be independent and the other half would still be self-regulating.
I appreciate where you are coming from. Professional conduct is a fundamental tenet of the legal profession. The standard of proof is different in each case. For service complaints, it is the balance of probabilities, but a conduct complaint is treated as a criminal case and requires proof beyond all reasonable doubt.
But there is no suggestion in the bill or in what the convener proposed that a complaint would be dealt with without lawyers being represented. The service complaints committee will have a majority of lay members, but it will also have lawyer members; the members of the conduct complaints committee will all be lawyers. Further, the proposal that we are discussing suggests a 50:50 proportion of lawyers and lay people. Nobody is suggesting that a committee will have no lawyer members.
It is not the case that conduct complaints will be dealt with entirely by lawyers. The discipline tribunal, the constitution of which is provided for in section 39, will have equal numbers of lawyers and lay members. That tribunal will make determinations on solicitors' misconduct.
That is precisely what the question is driving at. The proposed committee is based on a current Law Society model, but the overriding driver of the committee will be the commission rather than the Law Society.
Our arguments about the commission are ECHR focused rather than anything else. We are happy that there should be a commission to deal with service complaints.
My colleagues will press you on ECHR, but I have a question on a point in your submission. You mention your anxiety that solicitors in certain parts of the marketplace might be driven out of business because of the financial penalties that the commission could impose. Other than what is included in your submission, what data and research can you offer us to back up your worry?
Our evidence is anecdotal. I am a solicitor in Dunfermline and I know of a firm in Cowdenbeath that is the only legal firm in the KY4 and KY5 postcode area, which has 36,000 people. I cannot speak for that firm and I am not saying that it would withdraw from civil legal aid work, which is where the bulk of complaints come from, but if it were to withdraw, that postcode area would definitely have an unmet legal need; the situation would be similar to that which applies with NHS dentistry. I submit that there is a current unmet legal need there, because there is only one firm with two solicitors to deal with the immediate demands of 34,000 to 36,000 people.
I understand the picture that you are painting about rural solicitors and sole businesses in the context of the proposed £20,000 penalty. You mentioned Cowdenbeath, though, which I probably would not consider to be rural. However, given that 0.4 per cent of all cases result in a complaint, where is the evidence to suggest that rural and sole businesses are more likely to receive complaints or to carry the current burden of complaints?
I can speak only for myself, but I have received three complaints in my life. My firm responded to all three complaints timeously and on every occasion—unless another complaint is waiting for me when I return to the office—the complainer has disappeared because the matter was resolved by explanation.
Why is there such anxiety about firms going out of business? Is that because of the £20,000 penalty or the complaints system? What will put such great pressure on rural and sole businesses?
People make business decisions on a variety of grounds, so the £20,000 penalty will not be the sole criterion on which someone will decide to take down their plate. However, the issue is the total risk reward ratio. People might not take on certain types of business or they might contract out business that was previously carried out by their employees. I would not scaremonger by suggesting that if the bill were to be passed tomorrow half of Scotland's practices would close, as that will not happen. However, over five or 10 years, firms will contract out specific types of business and fewer providers of certain services will be available in a range of locations. That is what we are saying.
The areas of concern are civil legal aid, matrimonial law and, to some extent, residential conveyancing. In those areas—perhaps not so much in domestic conveyancing, but certainly in matrimonial and civil legal aid cases—people might find problems. Anecdotal evidence from our council members who represent firms from all over Scotland—including Inverness, Dumfries, Glasgow and Ayr—suggests that colleagues believe that, if they receive a complaint after the bill is passed, they will be better to write a cheque for £400 and compromise with the complainer. If the complaint passes the frivolous and vexatious test, they will be better to compromise with the complainer and then stop doing that type of work for fear that another complaint might come along.
I can assure Mr Bennet that we will not fall out over Cowdenbeath.
We are all delighted to hear that.
For the bill to be ECHR compliant, either the commission—or, to be more precise, the body within the commission that deals with appeals—must be seen to be an independent and impartial tribunal or there must be a right of appeal to an external body. Both those things would not be required.
Do you have anything to add to that, Mr Bennet?
Nothing at all.
The point is clear and is obviously different from what the other panels said.
The bill could be made ECHR compliant. I think that all the witnesses have made similar points about what is required to comply with article 6 of the ECHR.
The witnesses from the Faculty of Advocates did not, but on you go.
Either the commission would have to be fully independent and exercise functions similar to those of a court—I recollect Ms Stacey saying something along those lines—or, alternatively, there would have to be a full right of appeal to a court. That requirement would not be satisfied by a right to judicial review, which is a limited review by the courts. People would have to have a right to have the merits of their case examined, so that anyone who was dissatisfied with the commission's decision could take the matter further.
For clarity, are you saying that, if the perceived problems about the commission's independence can be dealt with, and if there is an external right of appeal, the apparent faults in the bill can be remedied?
The apparent faults can be remedied, but the situation is also—
That is slightly different from what the witnesses from the Faculty of Advocates said—they said that the issue cannot be remedied.
That is their view. We have had a brief discussion on the issue and our view is that action can be taken to remedy the bill. Our written submission highlights measures that could be taken. We are concerned about the Scottish ministers' ability to appoint, direct and remove the members of the commission and the fact that there will be no minimum term to be served. The bill indicates the maximum period of appointment to the commission, but there is no guarantee of how long people will serve on it. We suggest that appointment could be done by the Judicial Appointments Board for Scotland, which would give separation and would solve the problem of Scottish ministers having the ability to make appointments and give directions. There may be good reasons for the Scottish ministers to have the power to give directions, although I am not sure what they are.
What do you make of the views of the SLAS that an external right of appeal would increase costs and cause delays and that it would be better to strengthen the commission's independence? You say that both are necessary, whereas the SLAS says that we need only to strengthen the commission's independence.
Other aspects of the bill that relate to those issues cause us concern. The issue is about not only the appointment of members of the commission, but the procedures with which the commission will operate. As matters stand, we have no idea what those procedures will be, so we must take it on trust that they will be ECHR compliant, if the commission is to be considered the final tribunal. However, we have no guarantees on that in the bill.
All committee members are concerned about access. Promoting young solicitors in the area that I represent is important, so not calling such areas "the sticks" is probably the way forward.
The problem is with low-level breaches of rules. The Law Society has a large number of professional practice rules and it is easy to breach them. For example, we might receive a consumer complaint about lack of communication, which sounds like a service complaint, but as it is covered by the client communication rules it is also a matter of misconduct. If it is only a complaint about someone failing to reply to one or two letters, surely that is a service matter. If, however, a pattern develops of that person failing to respond to correspondence over a long period, it ceases to be a service complaint and shades into being a conduct matter.
As far as the complaints levy is concerned, the Executive's current position is that everyone pays, irrespective of whether the complaint is upheld. However, it has been suggested that, in addition to the general levy, the polluter should pay. Which option do you favour? Can you suggest a third way?
The bill will principally introduce an annual levy and a complaints levy—the Financial Ombudsman Service operates both mechanisms. I accept that there must be some flexibility; for example, when the service was established in December 2001, it was funded 50:50 by the annual levy and case fees. Now, after four or five years of operation, the service is funded 30 per cent by the annual levy and 70 per cent by case fees.
If there are no free hits, firms specialising in no-win, no-fee, endowment-type complaints will start telling people that if they complain about their solicitor they will be guaranteed a minimum of £400 or £500. We would discourage such activity, because it does no one any favours and simply leads to frivolous and vexatious complaints. Giving practices two free hits would remove the possibility of that happening.
We have a number of concerns, which we have highlighted in our submission. We have heard evidence about the distinction between solicitors and advocates and the types of complaint that are made about them. The proposal would have a differential impact on them. Certain groups will end up paying more than others, despite generating only a small proportion of service complaints. I seem to remember that last week's evidence from the civil servants was that there was scope in the bill for differential levels of fees to be charged, which should perhaps be considered, so that solicitors, advocates and licensed conveyancers would pay different fees according to the level of service complaints that they attract, which is what the commission will be there to deal with.
The principle of free hits should also apply to lawyers in the public sector, such as Scottish Executive lawyers, local authority lawyers and fiscals, who I do not think have been mentioned today. Those lawyers have rights too and, although they rarely receive complaints, they will be brought under the same umbrella, which has to be considered when dealing with the levy issue. Fiscals working in Glasgow sheriff court are a perfect example. If word got out about the levy among a particular fraternity, that could cause difficulty. We confidently expect that the Lord Advocate would tell the fiscals to withdraw from the roll of solicitors but remain fiscals and that he would grant them a commission to act as such. On that basis, 650 Crown Office and Procurator Fiscal Service fiscals would be removed from the roll straight away, which would mean that a bigger levy would be imposed on the smaller number left, causing increasing difficulty for the profession.
There has been a suggestion that solicitors will give up their practising certificates.
I stress that SLAS is not the Faculty of Advocates or the Law Society of Scotland, so we are able to speak more independently than most. We think that solicitors will resign their practising certificates, then start up will-writing businesses. That brings me to the part of our submission that refers to level playing fields. At the moment, the playing field is like the pitch at Easter Road. Will writers and immigration advisers are not affected by the proposed provision, but we are. We ask the committee to consider that carefully when it makes its decisions. We are not against what you are doing. We want to make sensible but substantial amendments to assist the Executive and the committee. We are not creating media attention or anything of that sort, but we want to make you aware that if you give this dose to us, it must also be given to other people.
Your point is well made.
I support Craig Bennet's comments. Although we do not have figures to indicate how many people are withdrawing from legal aid work—no one has looked at the matter for five or six years—we are aware from speaking to people that practitioners are withdrawing from legal aid work on a regular basis. Every month I am pointed to examples of big firms in Edinburgh and Glasgow and small firms around the country withdrawing from legal aid work. Just a short time ago, a sheriff explained to me that only four solicitors were covering criminal legal aid work on a duty roll for the whole of south-west Scotland. Those four solicitors travel around a vast geographical area, covering different sheriff courts. As matters stand, people are actively withdrawing from legal aid work. The bill will increase that number.
If there is evidence of people withdrawing from work already, perhaps you could write to us about that.
We have included some examples in our submission. The Public Defence Solicitors Office in Inverness now has to do the duty work in Kirkwall because, for better or worse, no one in Orkney will do it. I do not think that it is right that the PDSO should have to send people to appear in Kirkwall, at taxpayers' expense. The flights, if nothing else, are very expensive.
Is that information contained in your written submission?
Yes. It is just one example. Irrespective of what you think of solicitors, it is not right that a car mechanic at my local garage should get away with charging £60 an hour, but a civil legal aid solicitor should charge £42 or £44 an hour.
We are fairly time constrained, so I ask for tight questions and answers.
With talk of free hits, this sounds a bit like "Pop Idol".
I would answer the question by starting at a different point. We are concerned about what constitutes inadequate professional services. Section 34 extends the definition of "inadequate professional services" to negligence. If the maximum compensation level of £20,000 relates to negligence claims, I do not have any problem—and I do not think that the Law Society has any problem—with solicitors paying up for their mistakes. We have no problem with an alternative dispute resolution system with a maximum compensation level of £20,000.
It certainly clarifies things. It seems to me that you are drawing a distinction. You have issues about the definition and about adequate financial recompense. However, presumably if the proposed Scottish legal complaints commission adjudicated that £20,000 was an appropriate sum for inconvenience and distress, you would be happy.
According to case law, inconvenience and distress payments are generally fairly modest. It is not clear in the bill on what basis the proposed commission will make awards; I endorse what Valerie Stacey said about that earlier.
I would like to wind up on this angle. We are time constrained and we need to cover one or two other points. I would appreciate shorter, sharper questions and answers.
I have a question for Mr Sutherland. The Scottish Legal Action Group has expressed concern that there might not be sufficient professional knowledge and experience on the commission, especially in cases such as those that we have just been hearing about. Why are you not reassured by the fact that four lawyers, three of whom must have at least 10 years' experience, will be members of the commission?
The concern is that, although those people will be members of the commission, we do not know how the commission will operate. The indications are that decisions will be delegated down. That is one thing that is apparent from the scheme that is set out in the bill. There might be situations in which staff are making decisions without being aware of exactly what procedures the commission will operate and what decisions the commissioners will make themselves. Therefore, we cannot answer the question of the relevance of the experience of the legal members of the board.
I want to ask about the master policy. The submission from the Scottish Law Agents Society says that firms self-insure up to an amount of £5,000 and suggests that, consequently, the increase in the maximum level of compensation to £20,000 will result in more claims relating to negligence being run by the master policy insurers rather than by the practitioners. What would be the disadvantages to the client? Would those disadvantages be offset by the benefits of fair reward—if in fact £20,000 was a fair settlement—for loss suffered and by avoiding the expense of going through the court system?
There is no doubt that the client benefits from alternative dispute resolution. In relation to the master policy, my understanding about the excess that solicitors pay is that it is £3,000 per partner but that in the case of any finding of inadequate professional services it is extended to £6,000 per partner. Inevitably, with the commission, there would be a finding of inadequate professional services, because negligence is subsumed under inadequate professional services. Therefore, in a three-partner firm, the deductible would be automatically doubled. That is one of the reasons why we think negligence ought to be a separate head, in which case the self-insured amount would be halved.
There has been anecdotal evidence about delays relating to the settling of claims under the master policy. Is that less likely in the future if the commission has the power of oversight over the master policy?
I am not quite clear what the power of oversight over the master policy is. I do not see how the commission has any reach over an insurance company or basket of insurance companies operating a master policy. The Law Society has to have in place a scheme by which solicitors have adequate professional indemnity insurance, but it is not obliged to organise the running of the master policy. It could simply make a rule that each practice must obtain its own professional indemnity insurance; there would then be nothing for the commission to supervise. I am still not clear what the commission does. Does it ask Royal & Sun Alliance to come and have a cup of tea and discuss how it is handling claims? The Royal & Sun Alliance is not subject to its jurisdiction.
Mr Swinton and Mr Bennet, in your written evidence you express concerns about the lack of regulation of non-lawyers and earlier on I believe you mentioned the question of a level playing field. Would you be reassured by the bill team's evidence, which suggested that the new complaints handling system would apply to non-lawyers who had rights to conduct litigation in Scottish courts?
There is more to law than appearing in the courts with a gown on. Financially, something like 20 per cent of all the income—and therefore presumably the work that is carried out by the legal profession—comes from the courts. Although we are quite happy with what you suggest, the difficulty is that it needs to apply to everybody. Our request here would be a broad-brush approach.
I look forward to receiving the magazine. Mr Sutherland, you express concerns about the extension of Scottish Legal Aid Board funding to non-legally qualified advisers on a case-by-case basis. Will you tell us what those concerns are?
We would be concerned about having guarantees of the quality of work that was provided. We would be concerned that the case-by-case funding approach may simply reflect the difficulties that are experienced by solicitors at the moment in applying for civil legal aid funding. I would have thought that project-type funding or panel funding is a more appropriate course to follow for those advisers, to let them take on whatever work is considered appropriate. We are concerned that people who are appearing in court should be accountable to somebody to a professional standard that is equivalent to the standard to which solicitors and advocates are accountable for representations and misrepresentations that they make in the court.
That is helpful. Would any of you welcome it if the Executive were to lodge an amendment at stage 2 that delivers grant funding for non-legally qualified staff?
We would.
You would?
Yes. We are all for access to justice.
Thank you for participating in such a long afternoon.
Meeting continued in private until 18:25.
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