Our substantive business today is our first oral evidence-taking session on the Legal Services (Scotland) Bill. Let me formally introduce Professor Frank Stephen, who is head of the school of law at the University of Manchester and the committee's adviser on the bill.
Good morning, colleagues. How will the bill, and in particular the establishment of new business structures, benefit consumers of legal services in Scotland?
I thank the committee for inviting us to help it in its consideration of the bill.
With regard to the specific provisions in the bill, we feel that providing for regulatory objectives and lay involvement in the governance of the Law Society will greatly contribute to consumer confidence in the legal services market. However, we feel that the consumer benefit would have been greater if members of the Faculty of Advocates had been allowed to become members of the new business models.
We will take that on board. I am sure that the Faculty of Advocates will also note that point.
We agree pretty well with the OFT on this matter. The lack of competition in legal services is what caused us to launch our super-complaint. We feel that there are much newer ways of doing business that will provide benefits for consumers. Our experience is that consumers particularly like one-stop shops, especially with regard to the selling and purchasing of houses. We think that the changes will deliver economies that will affect prices in favour of the consumer, which is obviously a good thing.
You talk about the benefits of the provisions in the bill. However, is there a danger of disbenefits to consumers? For instance, some people have said that there is perhaps a danger that outside ownership might lead to law firms offering only profitable legal services. What do you think of that?
I think that it would be a mistake to imagine that many unprofitable services are being offered now. We already hear of deserts in legal provision. There are ways in which the limitations of the current arrangements restrict the supply of some types of legal services in certain areas, such as family law, housing and debt services. That is already a feature of the market and is, perhaps, an argument for including new models that would make it easier to meet some of those market needs.
Can the deserts that you speak of be made to grow again by the bill?
If you open a system up and allow people to create new models that they believe will meet a market need, you might well find that there are new areas of service.
So, you envisage no disbenefits to the consumer.
The success of any new system depends on how robustly it is regulated. For us, consumer protection is a high priority, and we believe that competition among services is one of the ways in which that protection can be delivered. However, there must also be the kind of built-in protection that will give the consumers of legal services in Scotland at least the same protection that they currently have. We believe that that is embedded in the bill.
Do you have anything to add, Ms Aspinall?
Just that protecting the interests of the consumer and the public form one of the regulatory objectives of the bill.
That is right. Further, people can continue to practise as they have if they wish to; nobody will be forced into a new arrangement. A sole practitioner might still choose to operate in a certain way. However, in these difficult times, the sharing of expenses with a local surveyor or accountant might be what saves some sole practitioners. The bill gives people scope to move forward in whatever way they see fit.
Thank you for laying out the theory so clearly.
Julia Clarke said that the one-stop shop would benefit consumers, particularly with regard to housing. How do the bill's proposals differ from what we already have? After all, people already go to large suppliers such as the Edinburgh Solicitors Property Centre, the Glasgow Solicitors Property Centre, the Aberdeen Solicitors Property Centre and so on.
I think that different models will emerge. Someone with a bit of entrepreneurial spark will see a space for, say, an accountant to team up with a local lawyer to provide a certain set of services. We will also find information technology specialists and others coming into the market, doing things in a different way, driving things in a different direction and providing different opportunities for people to buy and sell houses. The introduction of the home report has already brought something different into the market. I think that the market will adapt to what consumers want and that prices will reflect that benefit to consumers.
I see your general point about the involvement of accountants, managerial services, IT and so on, but surely, as far as housing is concerned, the large suppliers that I mentioned already pretty much provide a one-stop shop. I am trying to envisage the difference that the bill will make to me if I want to sell my house.
At the moment, different fees are paid at different stages of the home buying and selling process. That aspect could become more transparent if you dealt with a set of professionals who offered different services. I think that the bill presents all sorts of opportunities that we cannot yet see; as I have said, the market will, as usual, adapt itself to consumer preferences.
I want to develop that point. At the moment, the Law Society of Scotland has arrangements to prevent conflicts of interest between solicitors acting on opposite sides of the same transaction. On your suggestion about lawyers, solicitors and surveyors acting together on domestic conveyancing operations, I find it extremely difficult to envisage how, for example, single seller surveys could be carried out by the same provider without enormous conflicts of interest arising that would be hugely disadvantageous to the consumer. Will you comment on that? What services did you have in mind?
As far as home reports and single seller surveys are concerned, the fact that surveyors have a legal obligation to buyers and sellers is very important and, indeed, the keystone to consumer confidence. I do not think that that is an issue—
I am sorry to interrupt, but are you seriously suggesting that a firm acting on behalf of a seller should, as part of its in-house service, be able to instruct a surveyor to produce the survey on which the purchaser might rely? Such situations are notoriously difficult and can lead to all sorts of disputes between parties about, for example, dry rot that has not been identified and so on.
The bill contains protections to ensure that such regulatory conflicts are worked out.
Can you take that a little further and tell us about the practical operation of such a system?
On the preparation of the survey by the sellers—
Are you suggesting that the new entities that you are proposing would provide such services?
Not necessarily, but such a move would allow those services to be provided together. The same company would not necessarily act for both buyer and seller, but the home report would be prepared by the seller's team.
In other words, by the legal entity.
Yes.
What is the Office of Fair Trading's view on what I may say is a rather extraordinary proposition?
I just want to add one consideration. The OFT is in the process of doing a market study of home buying and selling and is looking at the operation of the home report as part of that. One of the questions that arises is who will be the surveyor. Obviously, there are other interests; in particular, we hear about the interests of the lenders and whose surveyor they want to use. A number of parties direct which service supplier is appropriate and which will therefore be chosen. It might be appropriate for the surveyor who is in the same firm as the lawyer who is involved in the transaction to be chosen; it might not be. However, that does not, in itself, reduce the opportunities to put the survey service in the right place to achieve the independence that someone might be looking for.
I am really asking whether there would be a conflict of interest in such a situation. How would the public interest be advanced by that arrangement, given the notorious potential, if you like, for conflict between the buyer and the seller in relation to the details on which the survey has reported?
As I understand it, the purpose of the home report is to take some of the sting out of that and to provide an objective study that is available to both sides of the transaction.
Does it not take away a substantial measure of the buyer's confidence in the home report if everything is dealt with not even at arm's length but by the same entity that is acting for the seller? I am sorry to press the point, but it is quite fundamental.
As has already been said, control has been built into the bill to ensure the highest level of professional service, whether professionals from different professions work together or as individuals. We do not anticipate that there will be any reduction in levels of professionalism, or in the confidence that consumers have in the services that are made available.
We might as well say that the same solicitor should act for the purchaser and the seller and do the whole thing in-house, so that we get rid of the associated additional costs of separate representation.
No, I do not think so.
On that point, when she talked about the consumer's interests, Julia Clarke said that the market will adapt to what consumers want. Stewart Maxwell helpfully made the point that a lot of large companies work almost as one-stop shops for house sales and purchases. However, there are still solicitors working in small high street offices who are able to provide those services. Consumers choose what they want.
That is absolutely right, and there will always be a place for the solo high street lawyer whom everyone knows and trusts and to whom they have always gone. However, some companies want to modernise and streamline their services and cut some of the associated costs. Frankly, we could use a bit of competition in this area in Scotland to improve services and drive down costs a little bit. If we free up lawyers to offer services in that way, people will take advantage of it.
There are two aspects to the issue. First, consumers have not had the choice of being able to make one visit to a local firm that might offer them legal and accounting services, for example. We have heard that people favour the idea of a one-stop shop—the demand might still be theoretical, but it has been reported to us.
Some people would say that the system is not broken, so why fix it? Why do you think the current approach not working? My big concern is about what will happen to the small firms of solicitors on the high street in the area that I represent if the new approach does not work and if firms do not, as you suggest, stick with it? They will disappear when bigger firms come in and take business from them for a time. The small firms might not come back because the solicitors retire or go to work for one of the big firms.
The sustainability of services is of great importance. At the moment, sole practitioners in the high street are having a difficult time sustaining their services. In offering new models, there is every opportunity for them to have a greater chance of being able to sustain their services.
I opened up this line of questioning because I was trying to get to the bottom of the practical difference that the bill will make to individual consumers; I am still trying to get to the bottom of that. Ms Brand stated that consumers would benefit from having joint legal and accountancy services. Who are those consumers? I can see that businesses might find joint services an advantage, but the bulk of my constituents, like Cathie Craigie's, are not businesses but individuals, and they will seek legal services, not legal and accountancy services. Is it just that some businesses, whether small or otherwise, would benefit from the bringing together of legal and accountancy services, or is there some wider benefit that I have not envisaged?
I do not want to give the impression that people will be flocking to acquire legal and accountancy services on the same day in connection with the same issue. However, many of us find that we need a lawyer, an accountant or both at different times in our lives. I suppose the intention is that people would not have to make different searches to discover who would be a good provider for them.
First, I should say that small businesses are included in our definition of "consumers". Stewart Maxwell asked about demand. Let me give the example of a sole practitioner in a rural area where there might be other professional firms. Some of those firms might find it easier to exist together and form partnerships that mean that they can keep going and offer their services to consumers, whereas being a sole practitioner might not be viable.
That is about the viability of two businesses coming together to make a more efficient business.
Yes—to offer a range of services.
So those services would remain in place as opposed to being lost to smaller communities. I can see that argument, but I am still struggling slightly to understand what the advantages would be. If I wanted legal services today, I would go to see a lawyer. If I wanted accountancy services next year, I would go to see an accountant. I am trying to understand the difference between what currently exists and what might exist in future.
I was trying to make the point that there might be firms that do not have enough clients to enable them to keep going on their own, and if they were to band together with other services, they might be able to make their businesses more viable and therefore continue to exist. The bill will enable such firms to bring in non-professionals, such as IT experts, who could help their businesses to innovate.
I accept that point, but I was making a slightly different point. There is a wider issue about the benefit of the approach and what difference it would make to consumers. We can explore that as we go on.
Ms Aspinall has given examples of situations that she said might arise. I understand that, given the world of economics. However, under the current model, if a high street lawyer and a high street accountant want to work together, what is there to prevent them from setting up under the same roof, sharing a secretary and hiring in someone who understands computing? Why on earth do they need a new business model, whether it is a partnership or some other limited liability company, to do something that they can do anyway as sole traders? They can just work together, can they not?
Yes, they can, but they do not have the opportunity to develop a different model that offers different expertise. An IT expert who comes in to help a business will not own it and therefore have a direct stake in moving it forward through the kind of modernisation that the area sometimes lacks.
I understand the economics of the example that you gave, but what is to stop the lawyer and the surveyor doing that now, if they choose to co-operate?
The trouble is that people are not doing that now. We need the door to be opened, to let people think about the joint services that they could offer. Because that has not happened, services are not being offered. We need the door to be pushed open, so that people say, "We could do things differently. Why don't we have a go?"
Forgive me, but I can open the door by telling sole traders that they can work together. Why do we have to change the legal structure to tell people about a door that is already open?
Because people are not working together, I suppose. The chance to own a business that crosses the professions would make such innovation far more likely. There can be economies of innovation, and the introduction of management expertise from outside the industry will be beneficial for legal services in Scotland. Things will perhaps be done in a more consumer-friendly way. We have found that people want legal services to be more user-friendly and a bit more modern.
I will open the door for Bill Butler.
Thank you, convener. It was remiss of me not to mention that some people fear that undesirable third parties might take over law firms if outside ownership is allowed in the way that is proposed. How will consumers be protected from such people?
The ownership of law firms and law practices must be fit for purpose. It is a question of ensuring that there is robust regulation. Indeed, however many rules are in place undesirables might currently be working in law practices—
I will not ask you to name any.
I do not think that I could do so—
There are likely to be some.
The New South Wales model allows external ownership, and we are not aware of major problems having arisen in Australia. External ownership is envisaged in England and Wales from 2011, I think. It is a question of robust regulation.
That is exactly right. There will be a fit-to-own test—
Are you talking about the provisions on fitness for involvement?
Yes. Those provisions will provide protection for consumers, along with all the other measures that are proposed.
Is the fitness-for-involvement test robust enough?
I think so. We have no evidence that it is not.
Do you have any evidence that it is?
That is always the difficulty with things that have not yet been implemented.
Exactly—that was your previous answer.
As Sue Aspinall said, we know that the fitness-to-own approach has been made to work elsewhere in the world. In Australia, for example, the use of that approach in New South Wales has been expanded into other states. That example shows that outside ownership does not necessarily bring the kind of hazards that others have suggested may arise in this country.
Do you know of instances in which there have been problems, or is the model working perfectly?
The fact is that Australia has adopted a similar approach to the approach that is proposed in the bill, with a rigorous set of conditions for those who wish to own firms. The Australian approach includes monitoring and the other provisions that the Government envisioned when it drafted the bill. As far as we are aware, no problems have been encountered thus far. You may regard the example as a slightly peripheral evidence set, but it is an example nonetheless.
I am grateful for your explication of the theory.
We must move on. If we are to get through what we want to get through, only one OFT representative should answer the question, unless one feels the need to augment what the other has said.
I will be as concise and quick as I can be, convener. What evidence is there that the existing regulatory approach is not working? Do we need a fully independent regulatory body for the legal services market in Scotland that separates the representative and regulatory functions?
From the evidence, we know that we are talking about public perception. If a body were to try to further the interests of both its membership and the public, tensions—even conflict—would arise. The best way in which to avoid conflict is to have a separation of the two roles.
Which? believes that there should be a separation between the two functions. The system does not work satisfactorily, so it cannot be said that it is perfect. At the very least, particularly in terms of public perception, separating the two functions would be an improvement.
You referred to that in your submission. Do you want to add anything?
Obviously, the proposal for a lay majority and a lay chair is good news. That is progress, but our view is that there should be complete separation between the two functions. If that cannot be done, the proposed committee to advise the Government on future regulation is a way forward. It is important that its membership should be drawn from beyond the legal profession. It should certainly have a lay majority and a lay chair. It should be a statutory body because it is proposed that the Government will regulate the regulators. That is not ideal but, if it is to happen, it is important that we have a strong advisory body.
What advantages to consumers would arise from having more than one approved regulator for licensed providers? What would be the benefit of regulatory competition?
Competition should normally have benefits for consumers unless there is a particular market in which it is best to have only one provider. The OFT's position is that approved regulators have an important role to perform in the way that they license and we hope that, if there is demand for a choice of approved regulator, that will develop the number of licensed legal services providers coming through, which will mean that there will be more such firms for consumers to choose from.
Did Julia Clarke want to say something?
No, I was just going to reiterate what Sue Aspinall said, so I will not take up your time.
Scotland is a jurisdiction one-tenth the size of England. The submission from the Institute of Chartered Accountants of Scotland indicates that we could get some of the advantages of wider choice and one-stop shops by extending the system under which ICAS can approve a solicitor to be a principal in a firm of chartered accountants. ICAS suggests that that might be applied to the Law Society in reverse, to adapt a much less bureaucratic model that, I guess the institute would argue, is appropriate to Scottish circumstances. Do the witnesses have a view on that? Can we achieve the same objectives by that sort of approach?
I wondered how many solicitors had taken that route.
I have no idea.
The model to which ICAS works was on the table in the discussions that led to the bill that is before you. My understanding is that it was considered somewhat too radical and a much greater departure from the existing arrangements than those in the bill. The OFT would certainly not discount that sort of simple arrangement. If we can build in adequate consumer protection, an unbureaucratic system is obviously preferable.
There is a coalescence of interest on matters such as tax advice and certain things to do with divorce. A one-stop shop might have greater relevance in such an arrangement than in a partnership with surveyors, of which I was critical earlier.
Yes.
I take it, Ms Aspinall, that your position is the same as it has always been. I note that when you gave evidence to the Legal Profession Bill reference group you were clear that you would approve of the adoption of a separate regulatory committee.
Do you mean for the Law Society of Scotland?
Yes.
The proposals amount to a separate regulatory committee. There is just no name change, as there was in England and Wales.
Are you happy with that?
The preference is for a clear indication of separation. The Law Society will have a separate regulatory committee, but how will that be perceived externally by consumers? Will they be aware that there is a separate regulatory committee?
Given that three of the four grounds of the Which? super-complaint related to advocates, is Which? happy with the bill?
No. We feel that it should cover advocates clearly. We see no reason for a bit of legal services to be hived off and, to be frank, not allowed to modernise. We are not happy with that aspect of the bill.
In what way would you like the advocates to modernise or—perhaps more fairly—what you would like the result of that modernisation to be?
We would like them to be able to form alternative business sructures—firms that include both lawyers and other professionals—and would like consumers to be able to commission an advocate directly, which is still not usually the case. We would like advocates to be able to work in different, more modern, more accessible and more transparent ways, and would like their regulation and representation to be separated, so that the public could have more confidence in the system.
What do you hope to achieve by that?
We hope to achieve a more modern, user-friendly legal services industry in Scotland, in which people know what they are paying for, that has a competitive market, so that people can get the best price, and that allows people to understand more about the legal services process that they are using.
What expectation do you have that the consumer—the man in the street, who is not in this room—could choose between advocates?
I am not saying that everyone would want to choose their advocate, but some consumers are highly educated and informed and are capable of that. They should be able to do so.
Is the 0.5 per cent of the population to which you refer not able at the moment to work through a solicitor to get the right advocate?
Why should they have to pay a solicitor to do that? I accept that the majority of people will not want to rush off and commission an advocate. However, for those who do, the current arrangement is sometimes an indication of how the service is set up. At the moment, it does not always offer choice to the consumer.
If I have guessed my numbers correctly, it makes sense for the 99.5 per cent of the population that has no idea of how to choose an advocate to go to a solicitor to do that. Apart from anything else, people do not know the language in which to discuss the subject that is before them. The solicitor can identify the issue, work out the language and sort out who the barrister should be. Is not the system pretty good at the moment?
We are not saying that the system does not work for the majority of people. The bigger point is that, under the bill, advocates will not join ABS arrangements and there will still be no clear separation of regulation and representation in the Faculty of Advocates. That should be corrected in the bill. Unfortunately, it will not be.
I hope that our other witnesses will answer my questions in a moment, but I would like first to pursue this point with Julia Clarke. I am told that 460 advocates practise in Scotland. That is a fairly small bunch of professional, highly qualified people. Do we really need a complicated structure for the regulation of 460 people who are regulated by the court anyway?
The consumer principles are the same wherever people live in the United Kingdom. People are entitled to the same level of transparency and the same protections in the industry with which they are dealing. If services do not modernise, the consumer has no way of demanding their modernisation—they are just presented with what is available. If there is no opportunity for choice, the consumer cannot make their needs felt and must keep taking whatever is delivered. Unfortunately, that is the case at the moment.
Would you not prefer to have a service—especially a legal one—that is regulated by the judges of the High Court rather than by some consumer watchdog? If I want lawyers, whose business is speaking to a court, to act professionally in my interests and the interests of justice, would I not much prefer them to be guided and regulated by the Lord President rather than by another organisation?
I cannot see what is wrong with independent regulation that is properly regulated and comes with all the necessary safeguards. I think that everyone was keen that that should be in place and, by and large, that is what is proposed in the bill.
Does the OFT have a view on the ground that I have covered?
On the direct access aspect, I appreciate that we are talking about small percentages, but it is really a question of the small amount of people who are sufficiently educated and familiar enough with court process having the choice to take a direct route. Further, it would be up to individual advocates to decide whether they wanted to offer their services in a direct manner. Direct access exists in England and Wales and a number of barristers there have not chosen to go down that route.
So, you are concerned that advocates might feel restricted in their current environment and might want to do something different.
Yes. I think that there is evidence that there are advocates who wish to adopt different business models.
You will be aware of the solicitors guarantee fund, which ensures that no member of the public can be defrauded by a solicitor. It provides essential protection. Do you agree that that scheme benefits the public?
It does, and we would not want that protection lessened for people who used legal services under any other arrangement.
Do you accept that the introduction of alternative business structures might undermine that fund and, therefore, lessen the amount of protection that the public receives?
I do not see how that would necessarily happen.
How do you see the fund being implemented as we extend into alternative business structures?
I suppose that that is a matter for the people who are taking part in the scheme to work out. It is like the master policy. We would like more competition to be introduced so that there is not just one provider, because that involves a potential conflict of interests. This might be a good time to look at the issue.
Do you agree that there are difficulties in changing from the current system, which involves all solicitors contributing to the fund, to a system that involves other professionals, such as accountants? Do you think that there will be difficulties in imposing such a levy on them?
That is part of the regulatory conflict that has to be worked out between the professions so that consumers are as protected as they are now. Different professions have different schemes, and that has to be worked out by the professions that might want to be involved.
Does the OFT have any views on the matter?
We would like the guarantee fund to apply to ABSs, as we wish consumers to be protected regardless of whether they go to a traditional practice or an ABS. I think that there is a way to ensure that the fund can apply to ABSs, but how that is done is a regulatory matter. I believe that in England and Wales—where they have a similar fund called the compensation fund—a levy is placed on anyone who is registered to practice and offers legal services in an ABS.
The minister has indicated that he does not intend to proceed with contingency fees. Do you have any views on the application of contingency fees?
The OFT's view is that any funding mechanisms that give consumers choice to secure funding for legal services can only be a good thing. We would have to see the proposals on how that would be done and how it would be regulated.
Do you accept the principle that some people have put forward, which is that if someone wins a case for compensation and is awarded £100,000, that sum should be awarded in full to the claimant and any costs should be attributed to the losers in the case?
There are many different funding systems in England and Wales, and that is one of the many flaws that have been identified. It cannot be right that legal fees are recouped from damages, so different ways will have to be devised whereby the consumer and the provider both get their appropriate share of the outcome.
Ms Clarke, do you have any views on the issue?
There are difficulties with contingency fees and conditional fees, but if it is a case of fees or no access to justice, fees are obviously better than no access to justice.
How easy will the new regulatory regime be for consumers of legal services to understand?
The average person rarely uses legal services, except perhaps when they buy a house. They want the system to be accessible and understandable, and to know who is paid a fee for what, what that cost is and whether there is competition to ensure that they get a good deal. I am not saying that every consumer will understand the whole regulatory background, but if the safeguards are in the bill, to some extent that does not matter, just as it does not matter, in some ways, that they do not understand the present framework. It just has to be easy to use at the time and easy to access if something goes wrong.
Does the OFT have a view?
Yes. There are two additional points. We believe that consumers need to understand the rules, systems and services that are available to them. In that context, various comments have been made about the possibility of covering public legal education because, as citizens, we rarely have enough of an understanding of how our legal system works for us. The bill might be a trigger for providing consumers with some of that new information. Its provisions are bound to be complicated. The issue will be how that complexity can be communicated effectively to consumers. Regardless of whether that is done in one of Consumer Focus Scotland's inimitable guides, it will need to be made clear what the changes are, why they are being made and what they will mean for consumers. That is for further down the road. It might even be important to provide a diagram that demonstrates where all the different bodies sit. There is the wider issue of how much we understand how our legal services work for us as consumers.
I was not entirely sure of the thrust of the OFT's evidence on the guarantee fund. One of the advantages of solicitor regulation is the existence of the professional indemnity policy and the guarantee fund. Is it your view that, however this is done, there will need to be a guarantee fund in place for other providers?
We would like to have reciprocal arrangements for consumers so that that does not become an important factor in the choice about which provider they go to. We want them to know that they are sufficiently covered whether they go to an ABS or to a traditional practice.
Does that mean yes or no?
The guarantee fund would relate to providers of legal services.
Okay. Through organisations such as the Association of British Travel Agents we try to provide increased protection against travel agents running off with people's funds, going bust and so on. Should not the provision of the same level of protection for the consumer be a principal objective of the regime that we put in place with the bill?
Yes. The consumer should certainly have a level of protection equal to that which is available under the traditional arrangements.
The Scottish Government is considering lodging amendments at stage 2 to regulate will providers. Does Which? support that proposal?
Frankly, we think that there is some opportunity for people other than lawyers to write wills. We would like that to be examined. We have no evidence that that would result in any difficulty, provided that things are properly done. We think that there is opportunity for competition in that area, which would benefit consumers.
Let me explore that a little bit further. What is the relationship between Which? and Which? legal services?
As part of our organisation, Which? legal services offers legal services to the public for a set fee.
The written submission from the Scottish Law Agents Society mentions Which? legal services—I must confess that I knew little about such services before—as an example of what it calls "execution only" legal services. Referring to Which? legal services, the submission states that its
I suppose that that is part of the opportunity that people should have to access different legal services, which is partly what we are hoping will happen. We hope that there will be a variety of service provision in Scotland, so that people can pick the service that is appropriate to them. Obviously, people who have a hugely complex estate would want to go to a solicitor for a will, but someone who has very simple affairs to settle might want to choose that way. It really depends on who you are and what your circumstances are. Certainly, I think that the provision of a plethora of services is important.
Most lawyers would say that the interpretation of wills and the effects of intestate law are among the most complex and difficult areas of law because of the challenges and disputes that they lead to. Do you accept that?
I accept that that is sometimes the case, but in other cases people have fairly straightforward affairs. It really depends on who you are. Finding the appropriate level of support and services is very sensible.
That leads on to the more complex question of the place of professional knowledge. Obviously, there is competition among solicitors and advocates, who are trained by quite a lengthy process. One would not expect a brain surgeon to have his business opened up to competition.
We would not expect a brain surgeon to take out someone's tonsils, for example. Having the right professional for the right piece of professional work is important. We need the right safeguards.
That is my point. Where do professional standards and training come into all this?
Which? has properly trained lawyers to hand among its staff. That is where that sits.
Under the bill, would that be a necessary requirement for alternative providers? Would they need to have fully qualified lawyers if they were operating in the legal sphere?
In Scotland, for instance, we have independent conveyancers. We would like to see more competition in that area, as people use such legal services quite frequently. Added competition could drive down prices and benefit the consumer. At the moment, such services are regulated by the Law Society of Scotland, which we feel is not appropriate.
My point is, where does professional competence come into it? What standards of competence will be required of people who operate in such fields? I do not think that licensed conveyancers are trained solicitors per se.
They have legal training, but I cannot say exactly to what standard.
Licensed conveyancers undergo training to get the qualification, which is obviously more focused on their role. I do not believe that it is as detailed or lengthy as solicitor training. Similarly, will writers in England and Wales are members of a number of bodies and have to undergo training and continuous professional development.
I suppose what I am getting at is the division between different sorts of areas of the law. There are clear areas, such as appearing in court as a McKenzie friend, for which a preponderance of legal training would be important, but other areas may not require that as much. For example, for issues of welfare law, citizens advice bureaux and others may come into the field and give very good advice. Does the Office of Fair Trading have a view on which core legal services require professional legal training?
Any professional training or skill has to be appropriate to the service that is offered.
Can you say in what areas that has to be the case and in what areas it is maybe more of an overlap with other professions?
That is a bit more difficult to do. Obviously, if someone deals with complex cases, their required training and level of qualification must be higher than for someone doing regular, everyday procedures that do not need such a steep learning curve and for which the skills are different. To use the surgeon analogy, I imagine that someone would need far more skill to be a brain surgeon than to offer accident and emergency help in an ambulance.
Where does the expertise come from for feeding into the regulatory body? If it is not from the Law Society, ICAS or another professional body of that kind, where does the expertise come from that enables the regulatory body to set standards for other groups or people as to the level of training and so forth?
Obviously, organisations such as the Faculty of Advocates and the Law Society have been around for many generations, if not centuries, so they have evolved over time. Some of the newer bodies may well have been approved under statutory provisions whereby they must provide a suitable scheme of arrangements to the Lord Chancellor or the Scottish ministers, who then ask for input from the Lord President and the OFT. They will therefore all start in that way, then be developed over time and monitored and reviewed, as are the rules of the Law Society and the Faculty of Advocates.
I think that that is as far as we are going to get, although Cathie Craigie has a final, brief point.
Would the OFT have made such strong representations in support of the bill if Which? had not lodged its super-complaint? Which? is a charitable organisation representing consumers. Members around the table have pointed out that we recognise consumers as members of the public and not necessarily as large business. Before the super-complaint was submitted, what sort of consultation did you undertake with the public? What do you say to the perception out there that the bill is for big business and will drive down the business in the high street? What do you say to the point that the bill is an open door for third parties to come in and profit, rather than for consumers to receive justice?
Obviously, when we launched the super-complaint, the idea was to improve things for consumers. We still believe very firmly that that will be the case.
What was your evidence? We have not heard any of that this morning. What was your evidence and research before submitting the complaint?
We knew that there continued to be problems with legal services.
How did you know?
Just from consumers bringing complaints to us and—
Well, you would know how many complaints were coming in then.
We do not necessarily have huge numbers of complaints, so I cannot say that that is the case. We sometimes cannot prove consumer detriment, but we know that, as a general principle, choice and competition opens doors for consumers to receive better-quality but cheaper services. I suppose that that general principle is our evidence base, as opposed to having specific evidence on legal services.
So there are no facts or figures that you can share with the committee.
No more than there are on the side of the status quo to prove what consumers want. The issue is difficult. We simply have to apply general consumer principles as best we can.
What about the point about profits?
In general, competition drives down prices for consumers and offers a range of ways of doing things that throw up benefits for people. We have seen that time and again over the 50 years of our history. When fair competition is introduced and consumers have choices, they tend to benefit. We believe that that will happen with the proposals that have been made.
Before the Which? super-complaint, the OFT was involved in the research working group, along with members of the Law Society of Scotland, the Faculty of Advocates and the Scottish Consumer Council. The Scottish Consumer Council brought many concerns about consumer issues to the table in 2005 and 2006. The catalyst for the bill was not the super-complaint; it was the work that was done before that in the research working group.
Did you refer to the review working group?
The research working group. Its name does not slip off the tongue.
I understand that that group concluded that a couple of minor changes were needed, but that a lot more research had to be done before legislative change should be made. Where has that research been undertaken?
The OFT and the Scottish Consumer Council often thought one thing while the Law Society and the Faculty of Advocates thought something else. I am afraid that I cannot recall the areas in which research has been undertaken.
Stewart Maxwell will ask the final question.
I want to pick up on a small point. Julia Clarke talked about straightforward wills. Let us consider a will being made up for me by Which? legal services using the system that Mr Brown described. I and all my relatives and friends live in Scotland, and I own property only in Scotland. In Which?'s view, is it appropriate for that will to be drawn up under English law?
I do not have a great deal of information about that, so I cannot be very helpful to you, I am afraid. I am sorry. However, I can certainly find out about the matter and come back to you on it, Mr Maxwell.
It seems odd to me.
I take your point.
Julia Clarke has given an honest response, for which I am grateful.
Meeting suspended.
On resuming—
The second panel consists of, in splendid isolation, Professor Alan Paterson from the centre for professional legal studies at the University of Strathclyde.
I should start by declaring an interest. I have connections with the Scottish Legal Complaints Commission, Citizens Advice Scotland, the Scottish Legal Aid Board and the joint standing committee on legal education. I have also had connections with the Law Society of Scotland in that I served on its council. However, I make it clear that I am here in my personal capacity as an independent academic.
We have the bill, but we do not have the act.
That is true.
It seems like you have a foot in every camp in the legal profession, Professor Paterson. The Law Society's opinion on the whole issue changed considerably in the space of a year or so. Have you any idea why solicitors were able to come together in that way to change their view?
That is a very interesting question. I was on the council of the Law Society when it happened, but I cannot answer your question. Being on the council of the Law Society does not mean that one is privy to all the internal debates that go on at the upper reaches of the society. I suspect that the large law firms made their views very clear and that that had an influence, but I must also report to you—I do not think that this information is private—that the vote in the council on alternative business structures was very clear. Those of us who were in the minority were clearly in the minority and those who were in favour had a strong, solid majority. Those in favour were not individuals from large law firms; they were from high street firms, rural firms and so on. I was surprised by the degree of support that the ABSs attained. It must be the case that many of those individuals see opportunities in them.
I take it that you do not think that the status quo is an option.
I am not sure that the status quo has been fully understood or developed. The status quo allows multidisciplinary practices, and there is no problem with multidisciplinary practices with different professionals working in the same firm, provided that one professional grouping—for legal services, it would be the lawyers—are in charge of the firm, are regulated to be in charge of the firm and have the responsibilities of running the firm and complying with the professional standards and the regulatory objectives. To me, that does not pose problems.
I want to pursue that issue briefly. I was speaking to the previous witness panel about the fact that it seems that the door is already open to doing precisely the type of thing that you have suggested. Surely, if the HR boss, but not the director, was on a performance-related pay system, it would not be particularly difficult to get most of the economic benefits that we are talking about—although I appreciate that bonuses are not flavour of the month—without having to change the legal structure.
I agree with you on that, but I am afraid that my viewpoint did not prevail.
I will return to the subject of advocates. Your written evidence to the committee describes the statutory framework as "skeletal", which is fair comment, given that you were referring—I presume—to section 82 of the bill, which does not say very much at all. What additions do you think should be made?
If you examine the provisions for improved regulation in the Solicitors (Scotland) Act 1980, you can see that, on regulation, we can go a lot further than the three sections that appear in the bill. I am not necessarily saying that we should go that far, but in the 21st century the notion that there should be consumer and public input into the regulation of professions is becoming widely accepted across a range of professions.
Forgive me—I was actually referring to chapter 2 in part 4 of the bill, beginning with section 87, which deals with regulation. I wanted to get that correct on the record, because I had forgotten the number.
Not in the 21st century. In Scotland, whenever there has been a tricky regulatory problem in the past, we have had a slight tendency to say, "Oh, we'll give it to the Lord President". That leads to overload, or the potential for it, particularly if we do not give the Lord President the staffing, the office and the support that he or she needs to carry out that function.
Does that mean that we necessarily have to go away from the Lord President being notionally the right person? Do we just have to ensure that he—possibly she, in time—has the appropriate staff to do that regulatory work? That might be cheaper than generating another body.
Indeed, but he must also be approachable and expect to receive representations from a wide range of interested stakeholders and individuals. That is the way in which regulation is moving.
Might that be achieved simply by introducing a duty to consult a list of consultees, if necessary?
Yes. That would be a start.
What evidence is there that opening up the legal services market to both banks and supermarkets will increase access to justice?
None of us knows the answer to that question, but all of us—including the consumer movement, the SLAB and the Law Society—have views on it. We have relatively little research evidence on what will happen, but we have a lot of hypotheses about what might happen.
Do you have similar concerns about banks?
I suppose that I do. We are all a little less trusting of banks now than we were two years ago. Two years ago, when we had these debates, there was talk of light-touch regulation down south. The Law Society hoped that we would have light-touch regulation, and Clementi adopted the financial services model. However, many people now think that that model has not worked particularly well and that—as the Government has said in relation to the bill—we need robust regulation.
You have already touched on the regulation of multidisciplinary practices. In your view, does the bill provide a satisfactory framework for dealing with divergences from and differences between respective professional standards and codes of conduct?
As my written evidence suggests, that is not my view. To my mind, one of the clearest issues with alternative business structures is the fact that professional providers and, indeed, non-professional providers have different regulatory standards. In other words, how do we prevent standards being gradually watered down to the level of the grouping whose standards, one might say, are lower?
Instead of leading to a lowering of standards, could the overarching framework provide opportunities to raise the bar for other professionals?
If the bill spells out the professional principles a bit more than it does at the moment and includes what I regard as the more stringent standards, it is likely that the new entities will be required to achieve those standards. I also hope—and I note that the bill does not state this fully—that all legal services providers in alternative business structures or working as a licensed legal services provider will be required to comply with the higher standards.
I suppose that my question is also about ethics. In relation to the regulation of third-party ownership, how satisfied are you that the fitness for involvement tests will be effective in excluding criminal elements from investing in or taking control of law firms?
That is a real problem; indeed, the Law Society itself is worried about it. I suppose that you could follow the Solicitors Regulation Authority in England and set out a series of tests to exclude people with recent criminal convictions from being able to invest in firms and so on, but it would be difficult to do and would certainly open up a risk area.
Is that because a close relative or relatives of someone with a criminal background might be given the wherewithal to invest?
People will think up all kinds of ways of trying to avoid the regulations, so I am with you on that score and I hope that the committee will think hard about the issue. The problem is whether you can prove that the system will work.
That would be very useful, because we have not yet had anything on which to base our deliberations on this particularly difficult issue.
Not many other countries have gone for multidisciplinary partnerships or external ownership of investment and law firms, so the answer to your question is no. The Americans, who we might think would have gone for it, have hitherto been fairly resistant, although there are one or two weakenings. The big drive in the States towards MDPs came from the accountants, and the Enron scandal put a stop to that for several years.
Yes, I can understand why.
What is the situation in European countries, which is one market that one might think we would be interested in? For example, are there multidisciplinary partnerships in France, Germany or Italy?
There are in one or two instances, as tax accountants and lawyers can form partnerships in certain European countries. However, the tax accountant is a very specialised professional, so such a system does not mean that management consultants or accountants can be in partnership with lawyers; it is self-contained and it has not proved to be a problem.
I take Professor Paterson back to Bill Butler's question on the risk of criminal elements investing in or taking control of law firms. We can all see how it could be done, and it has been done with other firms and businesses—the person who seems to own the business does not necessarily control it. However, in practice, is there a genuine risk of such elements taking control of law firms? Why would they? It would be just as easy for them to employ a lawyer as to take control of a firm—if not easier.
Yes, I take your point.
I think that Professor Paterson has anticipated some of the questions that James Kelly intended to ask. Is there anything that you wish to follow up, Mr Kelly?
As has been said throughout the evidence sessions, the regulation that is proposed is complex. One concern that has been raised is that the budget that is allocated to overseeing it is perhaps minimal—the starting figure is around £13,000. Do you have any views on whether enough finance has been provided to support the new regulatory system?
Is that Government finance?
Yes.
The figure sounds a bit on the low side. Ministers will perform the role that the Legal Services Board performs down south, and I think that they may find that it costs rather more than £13,000. The Legal Services Board is a very lean outfit and was designed in that way; it has a relatively small staff of 35. The Government might find that it has to spend a little more than the figure that you mention.
I will follow on from the issue about ministers' involvement, although not so much their budgetary involvement. Arguments have been made in evidence that there is a problem with the bill creating a regulatory and overseeing role for ministers and the independence of the legal profession. Do you share that concern and, if so, why?
I see where the argument is coming from, but the fact that ministers are to be subject to the better regulation principles and scrutiny means that I do not have a great concern. I understand the concern, but external ownership and multidisciplinary partnerships make me worry about a threat to the independence of the profession as well. Those are all threats that come with the bill. Presumably, the Government will be open to judicial review of anything that it does as a regulator, so that could be a further protection.
Are further safeguards required? Should other provisions be made to ensure that independence, or does the bill strike the balance as best it can?
On independence from the Government, I can see that there is an argument for bringing in the Lord President in the kind of role that we discussed earlier. However, the situation would be awkward. Who would decide on an application? Would it be the minister or the Lord President? Would the Lord President have a veto? Would they decide jointly? I am not sure that I quite see the answers.
Would it be proportionate for Scotland to have such a body?
That is the debate. The ministers think not.
What do you think?
Frankly, it depends on how it is done. I can see the argument, and it is finely balanced. I am not necessarily in favour of more bureaucracy for the sake of it, but I can see certain advantages in having an independent legal services board.
We have written evidence from a host of interested individuals who represent different parts of the Scottish legal profession. One submission suggests that, if the bill is passed in its present form,
I saw that and I was intrigued because one argument that the large law firms might have used—if they used arguments—was that they might move south if changes were not made.
Earlier, with regard to execution-only legal services, I asked about will writing. Do you have any concerns about the explanations that we were given? We were told that no legal advice was necessary and that it can be an IT matter involving the answering of questions. Do you regard that sort of service provision as desirable?
All providers of legal services should deliver an adequate professional service whether or not they are doing it for free. With regard to whether they have to perform to the legal standard that is required of lawyers, I am sure that the consumer movement would say that that is unnecessary—one must bear in mind advice that is given by citizens advice bureaux in that regard.
Earlier, with regard to conflicts of interest, we heard about the possibility of surveying services being supplied by legal firms as part of a new entity. Do you have any observations on that?
I saw the conflict of interest in the situation that you were talking about.
Thank you, Professor Paterson. You have given us exceptionally useful evidence.
Meeting suspended.
On resuming—
I welcome the final witnesses of the morning: Richard Keen QC, dean of the Faculty of Advocates; Iain Armstrong QC, vice-dean of the faculty; Tom Marshall, vice-president, civil, of the Society of Solicitor Advocates; and Paul Motion, secretary of the society. Thank you for your attendance. I am sorry that your appearance has been slightly delayed—as you probably saw, we were dealing with some complex stuff.
I believe that it is. I noted that Professor Paterson referred to the proposed regulation of the faculty as "skeletal". I would use the term "concise". The structure of the bill is important. In that context, I draw the committee's attention to section 86, which is fundamental to the regulatory regime that is proposed. The section provides that the regulatory authorities, which include the Lord President and the Court of Session, be subject to the regulatory objectives. That is the umbrella under which the scheme proceeds. The regulatory objectives are to be found in section 1 and have primacy not only in their numbering but in their impact on the bill as a whole. If one appreciates that the regulatory objectives are central—they are the pillar around which the bill is constructed—one can see that, although the provisions for some aspects of the regulation of the Law Society of Scotland and the Faculty of Advocates may be concise, they are effective.
Indeed.
I consider that the present system works effectively and that the proposal will be fit for purpose. I add one point, which Nigel Don raised. In the context of the regulation of the faculty, which is principally involved in advocacy before the supreme courts, an immediate form of regulation is an effective form of regulation, which is the court exercising its right to regulate the behaviour of those who appear before it.
As the committee is aware, a review into rights of audience is going on, which was instigated by the Cabinet Secretary for Justice. The Society of Solicitor Advocates is actively participating in the review and we think that it would be discourteous to pre-empt its findings.
Are you content to leave your evidence at that? I know that you might be inhibited about commenting until the interim report is produced in January.
Yes, if I may.
I understand the sensitivities of the situation.
How effective is the court as the ultimate regulator of advocates? The witnesses considered that point in their submissions, but it would be useful to discuss it.
In my view the court is an effective regulator, at two levels. First, ultimately the court approves all regulations of the faculty—and indeed may veto the regulations of the faculty—on admission and conduct. That is an overarching regulatory role. Secondly, there is a more fundamental and immediate form of regulation, which is connected to that. When an advocate appears in front of the court, he knows that the judge before whom he appears has the right to regulate his conduct and to ensure that he behaves properly and professionally, in the interests of his client and in no other interest. The judge may intervene in the course of a hearing, although that would be exceptional, to point out that he is not happy with the conduct of an advocate or the manner in which representation is being carried on.
In practice, the court involvement that you are talking about happens during a hearing. What about the wider regulation of advocates? As you say, the judge would intervene infrequently during a hearing to make the kind of statement that you have suggested. How are advocates regulated in their day-to-day work, rather than just in court?
The regulations on the conduct of advocates are initially promulgated and then submitted to the Lord President of the Court of Session. What then follows is a series of meetings between the court and the faculty with regard to any proposed change in the regulations. It is necessary for the faculty to make a case as to why there should be some change in its own regulation, and only if the Lord President accepts that change will it be made.
Do you accept that there is a perception among some members of the public that that is a bit of a cosy relationship?
That is sometimes suggested. I point out that one must have regard not only to consumer interest but to the public interest in the administration of justice. If we want to maintain a strong, independent Scottish legal system, we require a strong, independent Scottish legal profession. We will not necessarily weaken that by introducing outside regulatory bodies and I am not suggesting that we would, but we have an effective system of regulation that has maintained a strong, independent Scottish legal profession and, in turn, a strong, independent Scottish legal system. I note that three things distinguished Scotland between 1707 and the introduction of this Parliament: the church, education and the law. We managed to maintain all three for 300 years.
Strangely enough, I have no argument with the maintenance of the independence of the Scottish legal system or of those who practise within it. However I think that, in passing, you accepted that to move the regulation of that system to an independent body would not necessarily change that. Do you accept that involving non-lawyers in the regulation of advocates would not alter the independence of the legal profession? If not, what is the problem with non-lawyers being involved in the regulation of advocates?
It is a question of how and why as much as anything else. If we want to maintain the independence of the courts—which is fundamental—and of the legal profession, there must be a dividing line between the courts and the executive. That is already recognised by the Judiciary and Courts (Scotland) Act 2008, which provides for the position of the courts and the Lord President.
I fully acknowledge your point on section 86 and, indeed, on the basic regulatory objectives that are set out in section 1. That said, why would there be a problem if non-lawyers were to become involved in regulation? Would that, of itself, cause difficulties? I think that you accept the public perception that self-regulation is an issue. I am talking not only about lawyers: members of Parliament have come up against the problem in recent times. Do you accept the analogy?
We are not self-regulating. I like to think that we might be, but I know as a matter of fact that we are not. Not everything that I suggest to the Lord President is adhered to or agreed to; I can assure you of that.
Albeit that I accept your argument on proportionality, the question remains with regard to which side of the argument we come down on. Do the other panel members have anything to add?
I am particularly interested in what Mr Marshall might have to say. Do you wish to adopt the dean's argument, detract from it or add anything?
I do not want to impinge on the workings of the Faculty of Advocates. I return to the original question. The disciplining of solicitor advocates was at the forefront of discussions in 1990 when extended rights of audience were being debated in the House of Lords during the passage of the Law Reform (Miscellaneous Provisions) (Scotland) Bill. In the main, the debate in the House of Lords was conducted by Scottish judges who were also members of the House of Lords. They were very keen to ensure that the solicitors who were to appear in the supreme courts would be subject to the same kind of disciplinary procedures and practices as advocates. That was the main intention behind the wording of section 25A, as it became, of the Solicitors (Scotland) Act 1980.
How many solicitor advocates are there? I have no idea.
At the moment, there are about 250.
Good afternoon, gentlemen. Issues of professional misconduct by an advocate will continue to be referred to the faculty for investigation. What safeguards are required to ensure that the system of self-regulation is patently fair and equitable?
One has to take a step back from the point at which a matter is referred to the faculty. Any such complaint goes first to the Scottish Legal Complaints Commission—all complaints go to the commission, without exception. The commission then determines whether it is dealing with a service complaint or a conduct complaint. If it decides that it is a conduct complaint, it will refer the matter back to the faculty. If the faculty did not then deal with the matter, the commission would come back very quickly and ask what was going on. Inevitably, if a conduct complaint is referred back from the commission, it is dealt with through the faculty's system, on which, as you know, there is lay representation. Thereafter, if a complainer is not satisfied, the case may be appealed or referred back to the commission. However, whether it be a service complaint or a conduct complaint, it always goes back to a lay commission. There was a time when judges might have dealt with complaints informally. However, that is what happened in the past; nowadays, if we receive complaints, they go to the commission.
They are never dealt with informally.
Not any more.
When was the last time that a complaint was dealt with informally?
I will explain my experience in that regard. When a judge is concerned about the conduct of an advocate, he may write me a letter. If that letter involves a complaint about the conduct of that advocate, I make the complaint to ensure that it goes to the commission.
What would be wrong with a system in which consumers had direct access to advocates?
There is a system of direct access to advocates, but it is generally limited to professionals who are seeking opinion work. A firm of accountants or surveyors can instruct an advocate directly when it wants an opinion. For example, we are currently dealing with the Chartered Institute of Patent Attorneys. Other bodies of that ilk have rights of direct access to advocates.
I realise that they will not want to compromise the on-going consultation, but how do our witnesses feel about the current system of solicitor advocates? Has it helped to increase competition and choice in legal services for consumers?
Undoubtedly, it has. The benefit of a solicitor advocate was always the closer relationship that he might have with the client, given that the client approaches a firm of solicitors in the first place. Initially, the solicitor that people approached might have been a solicitor advocate, although that perhaps happens less now, as the model is becoming more and more like that of the Faculty of Advocates, in that solicitor advocates operate purely as such within a legal practice. Initially, clients had an opportunity to go directly to someone who would present his or her case in the supreme courts, whereas, before the system was introduced, there had to be the instruction of the solicitor and then the involvement of the specialist pleader to present the case. The solicitor advocate has a potential advantage in that they are a specialist pleader with those skills, but at the same time they might be in a closer relationship with the client and therefore more aware of the client's requirements. They are not a purely separate professional with the particular role that the dean of the faculty has just described.
I will add one point on that. In theory, the system should increase choice but, in practice, there are areas of law in which it has not done so, particularly in criminal work. That is a regulatory problem, which is related to the point that Professor Paterson made on the issue. When people go to a firm of solicitors and explain that they have a particular problem, for example that they have just been charged with murder, too often, they are offered the solicitor advocate who is the partner of the person with whom they are having an interview, so they do not have the option of going to Queen's counsel or a member of the faculty. That is not to decry the system of solicitor advocates; it is just to point out that there is a regulatory issue that must be addressed.
That is of course part of the present inquiry, following on from the Woodside appeal.
Indeed.
I return to the point that Mr Keen made about direct access to counsel for opinions. Ignore the fact that I am an MSP and consider me an ordinary citizen who happens to live in a house on an estate where the factor is not doing a terribly good job. That is a current issue, as Mr Keen might be aware. Because I have some legal background, I can see what the issues might be and I do not need a solicitor to tell me that, but I really want counsel's opinion. How would I get that, other than going through a solicitor? Is there an option?
You would have to go through a solicitor in that case. From our perspective, one issue is that we do not know that you have a law degree, so we do not know the extent to which you can analyse the problem and determine what the issue is. I can say from personal experience that when counsel are asked to provide an opinion, we are often asked to answer a series of questions, but we often end up redrafting the questions before we give the answers. It is fundamental to such matters that people know which questions to ask. Of course there are people out there who are perfectly able to determine what question to ask and what question they want answered, but we have to decide where to draw the line. There will be some people who are above the line and who would be able to instruct counsel without going through a solicitor and some who would not. It is a question of determining where we place what I would call the safety net. We do that by reference to the background and qualifications of those who instruct the opinion. A simple example is perhaps accountants, but there is a long list of bodies that can now instruct counsel directly for opinion work. That has not been opened up to the general public because we have to put the safety net somewhere.
You say that the list is essentially made up of professional bodies. Is that list on your website?
Absolutely.
So although the public have perfect access to that list, they do not have perfect access to you—in fact, they have no access to you. Any individual has to go through a solicitor.
That is correct.
If that is the way it is, so be it. That has at least clarified the point.
Underlying the bill's approach to advocates is an assumption that advocates who wish to benefit from practising in a business entity involving other advocates, solicitors or third parties can do so by becoming solicitor advocates. What costs would be incurred by an advocate in doing so? Would they lose any status?
The costs would be minimal. We have had instances in the past year in which people have left the faculty and become solicitors within a short period—I am talking about days. I do not know what the Law Society charges them to go on the roll of solicitors. However, it would not be a difficult thing to do.
So it is easy to transfer out and not quite so easy to transfer back in.
I believe that that is the case.
Mr Marshall, I will not ask you to comment on any potential loss of status.
I am much obliged.
Do you have anything else to add in general terms?
Transferability—the mutual recognition of qualifications, if you like—is another issue that is being considered by the review. Again, I anticipate that the committee may hear more about that in due course.
Yes, indeed.
On a point of clarification, the Society of Solicitor Advocates is a voluntary organisation and does not have a formal role in the regulation of solicitor advocates. For the committee's information, the current split of our membership is approximately 60 per cent civil practitioners and 40 per cent criminal practitioners.
The faculty has set its face against non-lawyer ownership of legal firms. Will you give us an idea of your thinking about the risks associated with that model?
There are potentially very real risks. You may be aware of the Bain report in Northern Ireland, which concluded that the risk there was very significant, largely because of the historical background. There was a great deal of concern that firms of solicitors would come to be controlled by factions within the shadows of Northern Ireland politics.
Does that work both ways? Risks have been voiced about the potential for English firms to take over Scottish firms. The same end result would emerge if the whole idea of multidisciplinary partnerships was allowed to proceed.
English firms take over Scottish firms already. As Mr Marshall will be able to confirm, Thompsons England and his firm, Thompsons Scotland, are two parallel partnerships. No doubt they are entirely separate legal entities but in reality they operate in close co-operation.
I am less concerned about the involvement of lawyers from other jurisdictions. I hasten to say that Thompsons Scotland and Thompsons England and Wales, although they bear the same name, no longer have any relationship. Once upon a time, they had a closer relationship than they do now. We have mutual clients, but we operate entirely separately.
There being no other questions, I thank the witnesses very much for their attendance.
I thank the committee for receiving us and listening to us.
Always a pleasure, Mr Keen.
Meeting suspended.
On resuming—