Chamber and committees

I mean fee submissions. I should have been clear.

Good morning. Thank you very much for joining us. I will ask you some questions that reflect more on the integrity and reputation of the legal sector around public inquiries. Today, you will stoutly defend things where you deem it appropriate, and I have no issue with that. However, I want to explore with you situations in which a conflict of interest, or a potential conflict of interest, could ultimately affect the legal profession’s reputation.

I ask you to bear in mind the fact that we see that a lot as politicians. If a person says, “I would never do that,” that does not necessarily mean that it could never happen. For example, we have seen lawyers use the media to whip up demand for a public inquiry. In some instances, they have done so very successfully, because it has helped to trigger an inquiry. They have brought out people who have been terribly wronged, whose view is that there should be an inquiry, and stories run about it and so on.

That seems to be quite a departure from how your firm does things. In the first instance, what is your perception of how you can add your voice on whether there should be a public inquiry, as opposed to going direct to the media and using it? What is your sense of that as a company?

We have raised this question before. The Law Society of Scotland said that it was not clear whether it would simply be a case of the lawyer exercising their freedom of speech. Compass Chambers said that it is not a relevant conflict of interest if the lawyer is advancing their client’s position. I took from that response that it is somewhere that it did not want to go.

Going back to the reputational and ethical aspects of it, there can often be a perception of a conflict of interest regardless of whether there is. I am trying to explore the question of removing that perception. There might well be a tipping point. Nobody is suggesting that rules have been broken—that is not the point. I am more trying to advance the question of perception. Can I take it that it is not the normal route—certainly for your company—to go direct to the media instead of lobbying Parliament? Do you have experience of how other law firms bring a matter to the public’s attention?

To finish on this point, I will ask about culture. Chairs will vary. I raised the question previously—apologies, but I have forgotten who was giving evidence—and I think that the witness alluded to the fact that he would take a dim view of the kind of scenario that I have set out. I respected what he said.

To what extent is there a culture in which some lawyers do not like to challenge other lawyers? If you are coming from a position in which ethics and propriety should be at the very heart of what you do, which you would sign up to from the start of your career, that culture would make it quite hard to challenge someone. What is your experience of being challenged by a chair on your submissions to various inquiries?

Good morning, panel. I will come to you first, Peter Drummond, and explore what you meant in one of the sentences in your submission. You said:

“The RIAS has concerns about proportionality and the use of retrospective quasi-hypothecation.”

I am clear on the terms “proportionality” and “retrospective”, but I wonder about the use of the term “quasi-hypothecation”. What do you mean by that?

Okay.

You might not be able to give much commentary on this, but I have noticed that the Government’s intention to have the tax point near point of sale works to an extent, but that excludes build-to-rent properties. Obviously, that is an entirely different business model. Do you have any reflections on the fact that it will not work for build-to-rent, by its very nature?

In your submission, you commented that the levy could ultimately reduce supply and that hotels could take priority, although that would be in certain areas, where there would be evidence of demand. Are you still concerned that it could reduce housing supply, given squeezed margins, in rural areas in particular?

As per the English regs.

The poor had no lawyers, if you like.

I turn to Mr Drummond. SPVs will be used, and there could be cases where unscrupulous builders set up multiple SPVs. To allude to Mr Henderson’s point, it would become very costly to track that back at some point in the future. How realistically can that practice be stopped and tracked with the powers, given that the regulation of such business structures resides with Westminster?

My last question is for Jonathan Henderson. You had quite an exchange earlier with the convener about why we are where we are, in which you mentioned a whole-system approach. You also alluded to the need for culture change in your submission. To what extent—if at all—do you think that the levy might start that process, or does the issue go much deeper than that?