LEGAL SERVICES 13
We are concerned here with a number of issues related to the provision and organisation of legal services, and issues of public access to legal services. The delivery of legal services at the outset of the twenty-first century looks very different from the way things were as recently as 1990. The legal profession has undergone a series of major changes as a result of the Courts and Legal Services Act (CLSA) 1990; the provision of public funding, advice and assistance has been drastically altered as a result of changes introduced in 1999; and the Legal Services Act 2007. The introduction of the ‘conditional fee arrangement’ (no win, no fee) in 1995 was another contentious issue in this area. In the 1950s, only a minute proportion of the population used lawyers to solve problems. Now, in the 21st century, a great many individuals, small businesses and organisations are using lawyers often as a matter of course.
The latest Law Society statistics Trends in the solicitors’ profession – statistical report 2010 show that there are 150,128 solicitors ‘on the Roll’, that is, people qualified to work as solicitors, of whom 117,862 have a current practising certificate (PC). This represents a growth of about 44 per cent ‘on the Roll’ and 42 per cent with a PC during the last 10 years. The number of women solicitors with PCs has increased over the same period by 80 per cent to 53,966. The percentage of PC holders drawn from minority ethnic groups has increased by 162 per cent over the same period to 13,104. The average age of a male solicitor with a practising certificate is 44.4 years and a female 38.1 years.
The geographical distribution of solicitors leaves much room for improvement. Of the 10,413 law firms in England and Wales, 28.2 per cent are in London, and 42.8 per cent of all firms are in a single region: the South-east. Firms in London employ 44.1 per cent of the 86,748 solicitors in private practice.
In 2010, there were 12,420 barristers in independent practice in England and Wales, of whom 8,443 were men and 3,977 were women. Queen’s Counsel (QCs) are senior and distinguished barristers of at least 10 years’ standing who, as a result of outstanding merit, have received a patent as ‘one of her Majesty’s counsel learned in the law’. The 2010 figures show there were 1,397 QCs, of whom 1,245 were men and 152 were women. In 2010, it was reported that the number of barristers called to the Bar had increased from 1,772 in 2009 to 1,852 in 2010 (Bar Council, Annual Statistics, 2010).
The professional work of lawyers continues to be very demanding. Of this there are various indices. In 2008, for example, a survey of lawyers found that 80 per cent had gone for a day without eating a single meal (eating only snacks) because of their heavy workloads ((2008) NLJ 1158).
The government’s aim is to ensure that the professions are properly subject to competition. In most cases, the theory of modern capitalism is that open and competitive markets are the best way to ensure that consumers get the best possible service. On all the issues raised in this consultation, the government’s position was that the market should be opened up to competition unless there existed strong reasons why that should not be the case, such as evidence that real consumer detriment might result from such a change. In 2004, the Secretary of State for Constitutional Affairs asked Sir David Clementi, a businessman, to review the regulation of the legal profession and to report to him with recommendations.
The main recommendations of the review included:
• The creation of a Legal Services Board, a new legal regulator that would supervise The Law Society, the Bar Council and all regulators of legal services.
• The creation of an Office for Legal Complaints, a single independent body that would handle consumer complaints against all providers of regulated legal services. Any discipline and conduct issues about solicitors would continue to be dealt with by The Law Society.
• The creation of Legal Disciplinary Partnerships (LDPs). These would be law practices that would enable lawyers from different professional backgrounds, for example solicitors and barristers, to work together, and which would permit non-lawyers to become involved in the management and ownership of legal practices.
The Government accepted most of the Clementi recommendations and these are now incorporated in the Legal Services Act 2007. The main change in the Act, compared to Clementi’s report, is the proposed new alternative business structures (ABSs), which permit the introduction of Multi-Disciplinary Practices (MDPs). MDPs would allow non-lawyer organisations (for example accountants and surveyors) to enter the legal market and offer their services to consumers alongside those of the legal profession.
The Legal Services Board agreed that ABSs would operate from 6 October 2011. LDPs came into existence from 31 March 2009 and as reported in The Law Society Gazette (9 April 2009) their creation has been fairly slow. There were just 377 out of 10,927 law firms according to the SRA Summary of Performance Measures and Statistics (March 2011).
The Legal Services Act 2007
The Legal Services Act 2007 heralds major change in the law. The changes prescribed in this new law are comprehensive and radical.
In July 2003, Sir David Clementi was appointed to carry out an independent review of the regulatory framework for legal services in England and Wales. In 2004, the Clementi Review’s report was published. The Government broadly accepted the main recommendations of the review. These were:
• A Legal Services Board – a new legal services regulator to provide consistent oversight regulation of ‘front line’ regulators like those for solicitors (the Solicitors’ Regulation Authority) and those for barristers (the Bar Standards Board);
• Statutory objectives for the Legal Services Board, including promotion of the public and consumer interest;
• Front line regulators to be required to make governance arrangements to separate their regulatory and representative functions;
• The Office for Legal Complaints – a single independent body to handle consumer complaints in respect of all members of front line regulators, subject to oversight by the Legal Services Board;
• The facilitation of Alternative Business Structures that could see different types of lawyers and non-lawyers working together on an equal footing as well as providing for the possibility of external investment in the delivery of legal and other services;
The Legal Services Act was built on those recommendations. The Act will engineer major changes in many aspects of legal services – a £20 billion sector in the UK. It will also bring legal services in line with other professional services in the twenty-first century. The Act is designed to enable greater consumer choice and flexibility in legal services by removing restrictions on business structures, allowing lawyers and non-lawyers to set up businesses together for the first time, and enabling services to develop in what the Ministry of Justice described as ‘new, consumer-friendly ways’.
The following measures are included in the Act:
• A single and fully independent Office for Legal Complaints (OLC) to remove complaints handling from the legal professions and restore consumer confidence. This established a new ombudsman scheme as a single point of entry for all consumer legal complaints. The Office commenced on 6 October 2010;
• Alternative Business Structures (ABSs), which will enable consumers to obtain services from one business entity that brings together lawyers and non-lawyers, increasing competitiveness and improving services. They will differ from the LDP in that substantial non-lawyer ownership will be permitted together with external investment. ABSs became operational from 6 October 2011 and Premier Property Lawyer, the conveyancing arm of myhomemove, was the first to register as such;
• LDPs have been permitted since 31 March 2009, with firms allowed to have up to 25 per cent non-lawyer or different kinds of lawyers as partners. In April 2010 the Bar announced that barristers could:
° become managers of LDPs;
° work in partnerships;
° work in both a self-employed capacity and an employed capacity at the same time (although not in the same case);
° hold shares in LDPs;
° share premises and office facilities with others;
° investigate and collect evidence and witness statements;
° attend police stations;
° conduct correspondence.
• A new Legal Services Board (LSB) to act as a single, independent and publicly accountable regulator with the power to enforce high standards in the legal sector, replacing a variety of regulators with overlapping powers. The supervision will extend to anyone providing legal services including claims handlers, notaries, licensed conveyancers, patent and trade mark attorneys and will writers. The chair of the Board will be a lay person;
• A clear set of regulatory objectives for the regulation of legal services which all parts of the system will need to work together to deliver, including promoting and maintaining adherence to professional principles.
These reforms come after extensive research and consultation, with input from a large cross-section of parties, including the Office of Fair Trading, consumer organisations, the legal professions, and consumers themselves.
The Possible Effects of the Legal Services Act 2007
The Legal Services Board (LSB) announced that ABSs would commence from 6 October 2011. This will enable non-law firms to own legal practices and is commonly called by the media ‘Tesco Law’. Whilst Tesco may well offer legal services, other large organisations have already stated their intention so to do and, indeed, the Co-operative Society has already announced that it will offer (subject to obtaining the necessary licence) legal services to the public via its chain of over 2,000 shops. The Halifax has also indicated an interest in supplying legal services.
In a speech to the Birmingham Law Society, Lord Chancellor Kenneth Clarke referred to the 1986 deregulation of the stock exchange and financial services industry and said ‘The financial community was changed forever by the “big bang”. With the Legal Services Act, it’s a whole new world – it could be the legal sector’s equivalent of the big bang. It may well initially affect only some areas, but it’s my feeling that this will fundamentally change the profession forever.’ The speech was reported on the website thebusinessdesk.com. The website commented that ‘some industry experts predict as many as 3,000 high street firms, or 35 per cent of the total may have to disappear …’ The Law Society has not ignored this threat to its members and, in autumn 2008, commissioned a report by Lord Hunt, which was published on 5 October 2009 and titled ‘The Hunt Review of the Regulation of Legal Services’. This is a lengthy report, which starts by considering the recent background to the legal profession and then considers various matters including professional regulation, education and training and ABS.
In his report (p. 102) Lord Hunt in considering how ABS might work and be regulated commented: ‘How will the inevitable conflict between economic benefits and ethical concerns be resolved?’ An example of this conflict might arise where a firm decided to settle a major piece of litigation, believing that it was in the best interest of the client to do so. The practice’s shareholders might suffer a consequential loss of potential profit. Under company law the shareholder may be able to sue the directors for making such a decision. The Australian firm Slater and Gordon, the first legal practice in the Western world to be listed on a stock market, worked with its regulator to solve this conundrum. Its constitution states that: ‘where an inconsistency or conflict arises between the duties of the company, the company’s duty to the court will prevail over all duties’. This position has yet to be tested. As Stephen Mayson of the Legal Services Policy Institute of the College of Law pointed out in his excellent discussion paper on ABS and related issues:
Experience in other jurisdictions (such as New South Wales) suggests that a focus on ethical behaviour and ‘education for compliance’ with regulation could pay dividends. Work commissioned by the Department for Constitutional Affairs also suggested that it is not the business structure that should be the principal cause for concern but rather the underlying incentives, and that ‘traditional’ structures and methods of practice involving only lawyers are just as likely to encourage unethical behaviour.
Slater and Gordon specialise as an insurance complainant practice and, compared with the top English law firms, are very small. Their turnover for the 2010 accounting year was Aus$ 124.7m (£71.8m) and profit Aus$ 19.8m (£11.4m), according to thelawyer.com 19 August 2010. The Slater and Gordon business model may well be appropriate for similar practices in the UK, but it is probably less likely to be adopted by the large city corporate law practices.
Lord Hunt went on to say (p. 103):
I still believe the ‘poster boys’ for ABS will not be those firms that look and behave least like traditional law firms; it will be those that demonstrate the most admirable qualities of a traditional law firm.
The former president of The Law Society, Robert Heslett, considered how ABS would apply in an article in The Guardian newspaper (9 June 2010) entitled ‘What alternative business structures mean for the legal profession’. He stated that:
It is possible that the emergence of ABS will prove challenging for existing firms. There may be more competition for solicitors who are well established in what is an already competitive market place. But providing legal services is not the same as selling baked beans as a previous minister suggested. I believe most consumers will generally prefer solicitors, given their unique selling point of being trusted advisers. There is an opportunity for those providing legal services to develop new businesses, but there will also be a need to improve the way in which existing services are delivered in order to meet public needs.
A new franchise – QualitySolicitors – has recently been formed to enable law firms to become members and compete with the changes envisaged by the introduction of ABS. Their objective is to have member law firms across the country in every high street by October 2011. Andrew Holroyd, a former president of The Law Society (and partner in Jackson and Canter, which is now a member of QualitySolicitors) said in The Law Society Gazette (7 October 2010): ‘the creation of a national legal services brand is essential if we are to compete with the new entrants to the market next year’.
Craig Holt, the chief executive of QualitySolicitors, told The Law Society Gazette (7 October 2010): ‘massively increasing our number of fully branded firms will enable us to achieve our goal of becoming the first established household name brand for legal services’.
It is not only The Law Society that is concerned about the forthcoming changes brought about by the Legal Services Act 2007 (LSA 2007) but also other professions, including The Institute of Chartered Accountants in England Wales (ICAEW). On its website the ICAEW considered the potential effects of the LSA 2007 on its members and commented:
A groundswell of general criticism lead to the Clementi Report in 2004, and now the Legal Services Act 2007 which threatens to revolutionise the delivery of legal services. So it’s about law and lawyers, isn’t it? Why should accountants and other professionals be worried? Think of it as Professional Services Reform instead and the implications become more obvious. We have had MDPs in all but name for many years with skilled people without accountancy qualifications working in the accountancy profession at the highest level. Now lawyers can enter the MDP arena. By utilising the new business structures permitted in the Act solicitors can access new sources of external capital and expertise. External ownership is permitted for the very first time.
Will this give lawyers a competitive advantage? What if your most promising tax accountant is lured away by the offer of partnership in a revamped and expanded law firm (that could be funded and managed by venture capitalists), or a local solicitors practice gears up and takes on some accountants to compete directly with you?
The world of professional services delivery will be changing and it is impossible to predict what form those changes will take when the first ABS are licensed in autumn 2011. The ICAEW is engaging with the policy makers, regulators, and other professions involved, ensuring that accountants are not disadvantaged and are given full opportunity to participate if they wish.
In conclusion, the LSA 2007 and its potential effects are beginning to cause both legal and non-legal professions and individual firms to consider how to move forward and compete with the possible major changes from October 2011. It may be that after the initial interest shown by some businesses (e.g. Co-op and Halifax) there will be comparatively little change. Companies moving into legal services may ultimately find the work less profitable than anticipated and the risks of professional negligence claims against them may lead to such firms withdrawing from the market. An area of possible major change could be in the insurance claims market and firms seeking stock market listings like the Australian practice Slater and Gordon. There is also the potential for a legal insurer to acquire a legal practice to attempt to reduce costs of defending claims. The emergence of the QualitySolicitors franchise may help to protect the smaller high street practices against the new ‘Tesco Law’ type entrants into the market place. Further franchises and affiliations may possibly develop. Small to medium-sized law firms may consider mergers to create larger more cost-efficient operations.
In early October 2011, Premier Property Lawyers, one of the largest conveyancing businesses in the UK and the conveyancing arm of myhomemove, was the first alternative business structure (ABS) to be licensed under the Legal Services Act.
A new pilot scheme for trainee solicitors has recently been started by a company called Acculaw, and approved by the SRA. Acculaw will offer training contracts to law graduates and then second them to city law firms and in-house legal departments. Trainees will spend a minimum of three months with any firm and a maximum of three secondments. The trainees will be employed by Acculaw rather than the law firms. It was announced (Legalweek.com, 20 September 2011) that Olswang became the first law firm to commit to the pilot scheme.
The English legal system is one of only three in the world to have a divided legal-profession where a lawyer is either a solicitor or a barrister. Each branch has its own separate traditions, training requirements and customs of practice. It is important to remember that it is not only lawyers who regularly perform legal work. As one text noted (Bailey and Gunn, Smith & Bailey on the Modern English Legal System (1991), p 105):
… many non-lawyers perform legal tasks, some of them full time. For example, accountants may specialise in revenue law, trade union officials may appear regularly before industrial tribunals on behalf of their members, and solicitors may delegate work to legal executives. Conversely, many of the tasks performed by lawyers are not strictly ‘legal’.
The solicitor can be characterised as a general practitioner: a lawyer who deals with clients direct and, when a particular specialism or litigation is required, will engage the services of counsel, that is, a barrister. Looking at the solicitor as a legal GP and the barrister as a specialist, however, can be misleading. Most solicitors, especially those in large practices, are experts in particular areas of law. They may restrict their regular work to litigation or commercial conveyancing or revenue work. Many barristers on the other hand might have a quite wide range of work including criminal, family matters and a variety of common law areas like tort and contract cases. The origins of the solicitor go back to the attornatus, or later the ‘attorney’, a medieval officer of the court whose main function was to assist the client in the initial stages of the case. One group of people practising in the Court of Chancery came to be known as ‘solicitors’. Originally, they performed a variety of miscellaneous clerical tasks for employers such as landowners and attorneys. Their name was derived from their function of ‘soliciting’ or prosecuting actions in courts of which they were not officers or attorneys. Eventually, neither of these groups was admitted to the Inns of Court (where barristers worked); they merged and organised themselves as a distinct profession.
It was not, however, until 1831 that ‘The Society of Attorneys Solicitors Proctors and Others not being Barristers Practising in the Courts of Law and Equity in the UK’ was given its Royal Charter. This body emerged as the governing body of solicitors, the term ‘attorney’ falling from general use.
One very significant area of development and concern for solicitors at the beginning of the twenty-first century is the extent to which their monopolies of certain sorts of practice have been eroded. They have already lost their monopoly on conveyancing. Then, in 1999, the Access to Justice Act (see Chapter 14) introduced the provision that the Lord Chancellor would in future be able to authorise bodies other than The Law Society to approve of their members carrying out litigation. This, however, should be seen in the wider context of the policy to break down the historical monopolies of both branches of the legal profession. Thus, we can note the growth, since the CLSA 1990, of solicitors’ rights of audience in court, and a corresponding anxiety at the Bar when these rights were granted.
The 1990 Act provides that every barrister and every solicitor has a right of audience before every court in relation to all proceedings. The right, however, is not unconditional. In order to exercise it, solicitors and barristers must obey the rules of conduct of the professional bodies and must have met any training requirements that have been prescribed, like the requirement to have completed pupillage in the case of the Bar, or to have obtained a higher courts advocacy qualification in the case of solicitors who wish to appear in the higher courts.
The standard route to qualification is a law degree followed by a one-year Legal Practice Course (LPC) and then a term as a trainee solicitor which, like the barrister’s pupillage, is essentially an apprenticeship. The one-year LPC is slowly changing, with Linklaters starting a seven-and-a-half month course (from January 2011) and Clifford Chance a seven-month course one year later. According to LegalWeek.com (21 October 2010) only seven of the top 30 firms have so far adopted the shorter version of the LPC. Non-law graduates can complete the Postgraduate Diploma in Law in one year and then proceed as a law graduate. The Law Society has considered, backed by the Solicitors Regulation Authority (SRA), an aptitude test for all students wishing to undertake the LPC in a move to limit the numbers of students passing the course and failing to obtain a training contract. It was announced on 17 June 2011 that The Law Society will not be pursuing the aptitude test in light of the current review of education and training by the legal regulators. The Bar Standards Board, however, commenced a pilot scheme in September 2009 (with 300 volunteers) and a further pilot in 2010/11 with over 1,600 students and it is hoped that it will become compulsory in autumn 2012. After completion of the LPC and traineeship, a trainee solicitor may apply to The Law Society to be ‘admitted’ to the profession. The Master of the Rolls will add the names of the newly qualified to the roll of officers of the Supreme Court. The requirement for a training contract may be removed or modified in the future. The SRA has investigated the need for a training contract and has proposed radical changes. In September 2008 a pilot scheme started with 46 firms taking part. There are two methods of training: the first is similar to the existing training contract, but the trainees (with a formal training contract) will not be guaranteed qualification as a solicitor if they do not meet the standards of rigorous testing to meet the objectives required and is referred to as ‘work-based learning outcomes’. The second allows paralegals to qualify, without a training contract, whilst working in their current jobs. The pilot scheme finished in 2010 and the SRA does not anticipate a further pilot before 2012. There are also proposals that qualification may in certain circumstances in the future take less than the current 24 months. To practise, a solicitor will also require a practising certificate issued by the SRA. This used to be a flat-rate annual fee, which in 2009 was £1,180. The SRA has changed the flat-fee method from 2010 to a four-part fee as listed below. The SRA’s proposed fee structure for 2011 has not, as yet, been agreed but is likely to be slightly lower than the previous year.
Individual practising fee
A flat fee of £428 for every solicitor seeking a practising certificate.
Firm practising fee
A fee payable by every firm seeking or maintaining authorisation to practise. This is a turnover-based fee as shown in the table below.
Individual Compensation Fund contribution
A flat fee of £10 is payable by each individual.
Firm Compensation Fund contribution
A flat fee of £120 is payable by firms which hold client money.
Firm Practising Fee Calculation of Turnover for 2010.
|Turnover range (A)||Pay per cent of turnover within band (B)||Minimum turnover in band (C)||Minimum fee in band (D)|
The firm fee is calculated by following the steps below:
• Identify which band the turnover (T) falls in from column A.
• Take T and subtract the figure in the corresponding column C.
• Multiply this figure by the corresponding percentage in column B.
• Finally add this figure to the corresponding figure in column D.
• Firm fee then needs to be rounded to the nearest pound (i.e. if less than 50p then round down and if equal to or more than 50p then round up).
Formula: (T − C) × B + D
Example for turnover of £200,400:
(£200,000 − £150,000) × 0.63% + £1,165 = £1,480.
Additionally, solicitors have to pay an annual premium for indemnity insurance.
All solicitors must now undergo regular continuing education, known as continuing professional development (CPD), which means attendance at non-examined legal courses designed to update knowledge and improve expertise. Each year solicitors are required to complete 16 hours of CPD training in the CPD year that currently runs from 1 November to 31 October each year. One CPD point equates to one hour’s training. It is compulsory for all newly admitted solicitors to complete The Law Society’s Management Course Stage 1 before the end of the third CPD year of the solicitor being admitted to the role.
13.3.2 THE LAW SOCIETY
This was the profession’s governing body controlled by a council of elected members and an annually elected president. Its powers and duties derived from the Solicitors Act 1974. Complaints against solicitors used to be dealt with by the Solicitors’ Complaints Bureau and the Solicitors’ Disciplinary Tribunal, the latter having power to strike from the roll the name of an offending solicitor. It had been sometimes seen as worrying that the Society combined two roles with a possible conflict of interests: maintenance of professional standards for the protection of the public, and as the main professional association to promote the interests of solicitors. Consider a rather basic example. Acting for its members, The Law Society should perhaps try to ensure that insurance policies against claims for negligence are always available for solicitors even if they have been sued for this several times. For such insurance to be granted to someone with such a questionable professional record is, however, clearly not in the best interests of the public who use solicitors.
In 2006, The Law Society council began a debate on the future of the society. The question was whether the society should survive, if so in what shape, and what it should do for the solicitors who fund it. Reforms introduced in the Legal Services Bill 2006 have already led to changes, with the society hiving off, in January 2007, its regulation to the Solicitors’ Regulation Authority and complaints handling to the Legal Complaints Service, which are new boards managed at ‘arm’s length’ from the central body. The Law Society now deals with the interests of its members and will negotiate with and lobby the profession’s regulators and government. The key roles of The Law Society now are to help, protect, promote, train and advise solicitors.
The profession is now four times the size it was 35 years ago, and with an ever-widening gap between the corporate giants and the legal aid firms, a substantial set of questions needed to be resolved.
Who will pay? In one Law Society survey, four in five solicitors believe that they should pay for at least some of the society’s representative work; but they want a slimmed-down, leaner machine – a society that is more efficient, more responsive and decisive (Frances Gibb, The Times, 28 March, 2006). According to the society’s 2009 financial report there were 1,337 staff costing £71 million out of the total annual overheads of £112 million. These figures were reduced in 2010 to 1,251 staff costing £63 million and total annual overheads of £104 million. City solicitors – whom many feared would jump ship, preferring to use their own City of London Law Society – also want to keep a national voice. They appreciate the society’s lobbying to open up markets overseas or on money laundering and company reform.
But only one in five law firms felt that all its needs were being met and 40 per cent felt ‘few or none’ of their needs were being met. A sizeable 37 per cent thought the society too expensive. The cost in 2005, through the practising certificate fee, was £1,020. The fee for 2006 was reduced to £950, but 34 per cent thought that still too high. It has since been increased to £1,180 for 2009, together with a contribution of up to £390 for the compensation fund. The fee structure since 2010 has been radically changed as shown in 13.3.1 above. Moreover, 47 per cent said that if membership of the new-style society was voluntary, they would not join. Another 31 per cent said that this would depend on cost.
Solicitors Regulation Authority (SRA)
The SRA is the independent regulatory body of The Law Society and was established in January 2007. It was formerly known as The Law Society Regulation Board, but changed its name so that it would be clear that it was independent of The Law Society. The SRA’s job is to regulate and discipline all solicitors in England and Wales, who number in excess of 100,000, with its principal aim of giving the public confidence in the profession. The SRA’s functions include:
• setting standards for qualifying as a solicitor and the requirements for solicitors’ continuing professional development;
• monitoring the performance of organisations that provide legal training;
• monitoring solicitors and their firms to ensure compliance with rules;
• referring solicitors to the Solicitors’ Disciplinary Tribunal;
• running the compensation fund;
• drafting rules of professional conduct.
In carrying out its functions, the SRA consults with solicitors and other legal professionals, along with the public, consumer groups and the government.
The Compensation Fund was set up in 1941 by The Law Society to protect clients who lost money due to the dishonesty of their solicitor or their solicitor’s failure to properly account for clients’ money. The fund used to be supervised by the Consumer Complaints Service (CCS). However, the fund is now run by the SRA. Any person, and not just the client of a solicitor, may seek payment from the compensation fund providing the person has suffered financial loss due to the solicitor’s dishonesty or financial hardship due to a solicitor’s failure to pay over money that he has received. The loss must arise during the solicitor’s normal work. As a general rule, a person must notify the SRA within six months after they discovered (or should have discovered) the loss. The SRA will require the person making the claim to complete an application form. A caseworker will then investigate the application and if necessary will request more information before an adjudicator or panel determines the application. The SRA will not normally sanction the payment of more than two million pounds including interest, costs and any other insurance or other payment the person who has suffered the loss may receive.
The Legal Complaints Service (LCS) may also direct a person to make a claim to the SRA’s compensation fund. This may happen following the LCS directing a solicitor to pay compensation for poor service but are unable to pay it if their firm is insolvent, the SRA having intervened in the firm or their practice is closed.
The New Code of Conduct
On 1 July 2007 the Solicitors’ Code of Conduct 2007 came into force which has now codified solicitors’ conduct obligations. Rule 1 sets out six core duties which are fundamental rules and a breach could result in sanctions. Rules 2 to 25 are the rules that arise from the core duties and which basically put flesh on the bare bones of rule 1, breach of which may result in sanctions. After each rule there is guidance which is not mandatory and does not form part of the Code of Conduct.