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Legal services reforms – some unresolved questions


Regulation is an inescapable feature of modern society. No longer can any group of service providers, even a group as ancient and reputable as the Bar of England and Wales, claim to remain exclusively self-regulating. A regulatory framework has to be established so as to ensure that the public interest is adequately protected in the manner in which barristers provide their service. Not even MP’s now claim to be immune from a statutory system of regulation. Indeed, recent events concerning MP’s show the necessity for a statutory framework such as has now been enacted.

At the same time, it has to be appreciated that regulation alone, though it may establish a minimum standard, is not enough. In the end, the only way in which a client can be guaranteed a good service from his lawyer is if that lawyer is sufficiently well-trained and motivated to provide the required level of service. Nowhere is this more true than in the case of advocacy and advisory services, in the context of contested litigation, which is the barrister’s sphere of expertise. Bearing in mind therefore the practical limits of regulation, the Clementi review accepted that it would be inappropriate to insist upon a single monolithic heavy-handed regulatory system for the legal profession as a whole. Clementi accepted, and the Legal Services Act 2007 therefore embraces, the pre-existing system under which lawyers of different kinds are regulated by their own professional body subject to overarching supervision by the new Legal Services Board. The only pre-requisite is that the professional body in question must ensure that its regulatory role is handled separately from its representative functions. Thus the Bar set up, as from the 1st January 2006 (when I began my year as Chairman of the Bar) the Bar Standards Board now chaired by Baroness Ruth Deech (matched by the Solicitors’ Regulatory Authority set up by the Law Society).

In a Press Release issued on 13th November 2009 the BSB announced that it was to take a series of important decisions about the future regulatory framework for the Bar. The Press Release stated in part as follows:

‘The BSB acknowledges that the Bar has served England and Wales well for centuries. Its unique attributes are recognised at home and abroad. The BSB is therefore determined that, in making any liberalising changes, the defining and positive attributes of the Bar – its independence, its excellence, its pro bono work and its ethical code - should be preserved in the public interest.’

The BSB might have added the importance of these qualities being available to solicitors up and down the country, especially those firms – some 80 per cent of the total – with five partners or less.

Given that the Act expressly preserves the Bar’s right to retain its own separate regulatory regime, it might also have been expected that the BSB would support the Bar’s rejection of partnership as a regulatory model, and likewise would steer clear of new entities such as the so-called Legal Disciplinary Practice involving both barristers and solicitors. Of course, partnership would in many ways be a natural model for the provision of legal services, as is shown by the fact that solicitors, who make up some 90% of all legal services providers, do generally practise in partnership. Through a partnership the senior members are able to earn profits on the basis of the activity of others. By contrast, a barrister must accept personal responsibility for his own work under paragraph 306 of the Code of Conduct. He cannot supply legal services by offering work carried out by others. Moreover, so far as the self-employed Bar is concerned, barristers are bound by the cab rank rule, one of whose beneficial and civilising effects is that many barristers in the course of their professional practice act for clients on “both sides of the argument”, in other words for the prosecution as well as the defence, for wives as well as husbands, for tenants as well as landlords, for claimants as well as insurers, and for those wishing to obtain a remedy from a public body as well as for the public body against whom the remedy is sought.

Contrary however to some people’s expectations, the BSB has now on 19th November 2009 reached the following decisions among others:
- Barristers should be permitted to become managers of LDPs, regulated by the SRA without having to requalify as solicitors.
- Barristers should be permitted in principle to form barrister-only partnerships, pending the creation of an appropriate regulator for such entities, currently not in existence, and consultation by the BSB in relation to becoming such a regulator.

- Barristers should be permitted in principle to practice through other barrister-only companies and limited liability partnerships (LLPs). However, further work is required to determine if the BSB should regulate these entities.

- The cab-rank rule will apply to barrister only partnerships, as well as the self-employed Bar. The BSB considers that all advocates should be subject to the cab-rank rule and will be raising this issue with other regulators.

- The Board should consult on whether or not it should become an entity regulator of the new legal entities, and, as part of this consultation, look at whether a modified cab-rank rule can be applied to barristers practising as managers of LDPs undertaking advocacy work.

 

 

In its accompanying Press Release, the BSB reiterated that ‘….having made these decisions affecting the nature of the supply of legal services, it is now our intention to introduce them in a way which safeguards the independence, quality and ethical conduct of the Bar while also serving the best interest of consumers. We trust that these changes are creative, flexible, permissive in the most positive sense, measured, in that they do not represent a ‘free for all’, but amount to a ‘shot of adrenalin’ for those elements of the Bar that have been struggling in recent times, and, most importantly therefore, of benefit to the users of barristers’ services and for the legal services market as a whole.’

These decisions by the BSB raise the following as yet unanswered questions:

1. Will the Bar Council agree to amend its constitution so that it can become an entity regulator and if so, which entities will it decide to regulate?

2. Will barristers in chambers generally decide to emulate solicitors in adopting partnership as the predominant practice model? If so, what effect will that have upon the ethos of personal responsibility hitherto integral to professional practice at the Bar.

3. How many barristers will choose to practise in an LDP rather than in chambers or in a barrister-only partnership and, if they decide to do so in significant numbers, what effect will this have upon the viability of the Bar Council in its regulatory role.

Surprisingly the papers upon which the BSB based its recent decisions contain no answers to these questions. Indeed, the papers proceed on the basis that it was unnecessary to know the answers to these questions before deciding how, in the public interest, the issues raised for decision should be resolved.

In the view of the present writer, the Legal Services Act did not oblige the BSB to decide as it has done, and its decisions raise question-marks as to the future survival of the Bar as a separate branch of the legal profession. Much will depend upon whether the BSB can compete effectively with other regulators in offering a sensible and cost-effective regime under which those lawyers can practise who seek to offer advocacy and related advisory services. On an optimistic view, advocates will come to see the Bar’s regime as the regime of choice for those who wish to practise advocacy, and the Bar as a profession will continue to increase in size as it has done in the past. I suggest however that only in this way can the future of the Bar be guaranteed. Those who take the view that it would be good for the Bar to decline in numbers and to become an ever-more specialist meritocracy are, in my view, living in cloud-cuckoo land. Unless barristers make themselves available in sufficient numbers to solicitors up and down the country to provide the kind of service upon which solicitors wish to rely, then the Bar will have largely outlived its usefulness and will gradually (or even perhaps rather rapidly) wither away.

However as they face the future, barristers can take comfort from one priceless advantage. That advantage is inherent in their identity as barristers - an identity recognised explicitly in the Legal Services Act in which a barrister is defined as someone who has been called to the Bar by an Inn of Court. Barristers have been questioning the raison d’être of the Inns of Court ever since I myself was called to the Bar. The answer to the question has always been clear, but the result of the BSB’s decisions is to throw the role of the Inns into even sharper relief. The Bar Council, through the BSB, must as I have said provide a sensible and cost-effective regulatory regime, but it is the Inns which must provide the training, the motivation, the inspiration and the example of excellence upon which the Bar’s success has always been based. It is with the Inns, and through them with the Bar itself, that the future of this historic profession now lies.

Stephen Hockman QC, Head of
Six Pump Court chambers

 

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