Changes to the Guidance on Returning Instructions

Western Circuit Response to

BSB Consultation Paper

‘Changes to the Guidance on Returning Instructions’

Introduction

It is difficult to understand the true reasons for the proposed change. There isan unfortunate perception that the BSB are somehow being prevailed upon, given the current climate, to take a step which weakens the bar’s ability to stand up for itself in the face of unreasonable conduct by the government. If that perception is misplaced,thenthe timing of this consultation is unfortunate.
As far as the Western Circuit is concerned the circumstances in which a barrister was entitled to return a brief were quite clear. We do not see that the events of the last few months have altered those circumstances. It would be unfortunate if the authority of our current regulator was to be undermined, or seen to be undermined, by any suggestion that it was acting otherwise than wholly independent of the Executive.
Be that as it may, we now consider the substance of the proposed change bearing in mind the BSB’s published ‘Regulatory Objectives’. The four questions overlap so we set out what we intend is a cogent response rather than answering each in turn.

Background

The existing guidance means that a barrister is entitled to withdraw from the case if a ‘fundamental change’ is made to the basis of remuneration after instructions have been accepted. At the heart of this guidance is a reassuring recognition of something that every lawyer instinctively understands whether as a result of a grounding in the law of contractor simply because of knowing what is fair.

The reason given for the need to change the guidance is that the existing guidance meant that a barrister could withdraw from the case without regard to the potential detriment to the client. It is said, in effect, that a fundamental change- which for these purposes must mean a significant cut in the level of remuneration- made unilaterally by a ‘third party funder’ would not be the client’s fault, and that therefore the impact on the client of withdrawing from the case ought to be a material consideration in the decision made to withdraw.

The net effect of the change proposed, of course, is that those responsible for third party funding would to some extent be absolved from taking full responsibility for the consequences of unwarranted steps in reducing fees.

However one dresses-up this change, the effect is inevitably political. Regulators have no business being involved or appearing to be involved in politics. Such an involvement or appearance can only undermine authority.

Under the present guidance a private ‘third party funder’ such as an insurance company reneging on an agreement concerning remuneration, is deterred from doing so if the effect will be to leave a client unrepresented, with the attendant risk to reputation that concerns those operating in the private sector.

But the reality is that the catalyst for the proposed change has been not the private sector, but the government’s (via the LAA) unilateral reduction by 30% of VHCC fees incases where contracts were already in place. This catalyst for the present consultation is acknowledged by the BSB. The consequences of the government’s unreasonable act are currently playing out on a public stage.

In simple terms, the effect of that unreasonable conduct amounting, as it clearly did, to a fundamental change, was inevitable. The damage to the interests of clients caused by this third party funder’s unilateral act was predictable – the more so because the code of conduct (i.e. the guidance) was unambiguous. The very nature of the barrister's automatic entitlement to withdraw ought to have operated as a disincentive to a unilateral attempt to force a fundamental change. The fact that it did not do so in this instance was a blunder by the government, the consequences of which are still being felt.

Whether those in control of third party funds are agents of the state controlling the public purse, or private companies such as insurers, the effect of the proposed change is to give them greater latitude in reducing rates of remuneration after a barrister has taken on a case at an agreed fee. This is not just a bad outcome for barristers. It is a bad outcome for justice, and, for the reasons developed below, for clients and others engaged in our system of justice.

The BSB’s objectives

We have considered the proposed change against the four ‘Regulatory Objectives’ of the BSB that seem to be engaged by the topic. Those regulatory objectives include:

Protecting and promoting the public interest;
Improving access to justice;
Protecting and promoting the interests of consumers;
Encouraging an independent, strong, diverse and effective legal profession.

Protecting and promoting the public interest

It is acknowledged of course that the public has an interest in clients not being left unrepresented through no fault of their own.

It ought to be remembered, however, that the courts have a duty to protect such clients, and while that does not provide an entire answer to this concern, it is a relevant consideration when considering the weight of it.

But the public also has an interest in ‘third party funders’ being prevented from unilaterally reducing the level of remuneration that has been agreed. This interest is not merely the interest in refusing to tolerate implicitly dishonourable conduct. It isalso an interest in ensuring that suitably experienced and senior counsel are available for cases, particularly complex cases. This is not something that can be ensured if such counsel do not have the comfort of knowing that a fundamental change in remuneration will automatically enable them to withdraw.

It is unacceptable for any professional person to have to accept instructions for a case in the knowledge that the remuneration terms might change like the wind. This is not conducive to continuity of representation, nor the encouragement and development of junior members of the profession.

Furthermore there is a wider public interest in ensuring that third party funders know that the responsibility for their conduct in a fundamental change to agreed levels of remuneration, will fall squarely and entirely at their door. In other words the current guidance operates as a disincentive for those tempted to renege on what has been agreed. That disincentive would be weakened if the funder wasable to play upon the barrister’s concern that professional disciplinary consequences might follow, and able to blame the barrister for any poor consequences for the client. That weakening of responsibility is not in the public interest.

Improving access to justice

The proposed change may be said to improve access to justice, in that a client who is left unrepresented though no fault of his own may be protected to some extent by the rule change. The flaw in this argument is that the proposed change risks reducing access to justice in that many barristers currently providing excellent access to justice may be deterred from taking on cases where they do not have the protection afforded by the current position. The current responsibility for the client being left unrepresented is the provider's. That is precisely where the responsibility should remain. To shift that responsibility to any extent to the barrister, with the attendant risk of an increase of third party funders feeling able unilaterally to reduce remuneration after instructions have been accepted, will not serve the objective of securing access to justice because it will encourage unscrupulous behaviour by those who fund clients, resulting in a diminution of the quality of representation.

Furthermore a client represented by a barrister who under compulsion now has to work at significantly poorer rates than expected, may consider that the barrister has a perverse incentive to terminate or shorten the case in some way, to the potential detriment of the client.

The overall effect is not to improve but to hinder access to justice.

Protecting and promoting the interests of consumers

The proposed change, whilst on the face of it addressing the objective of protecting a client who becomes unrepresented, makes the mistake of focusing only on the plight of a given consumer in a given case. A broader perspective demonstrates that the change will bring about a diminution in the interests of consumers generally, for the reasons given above.

There is no avoiding the fact that there are wider policy considerations at play. An intention to remedy or ameliorate the injustice caused in an individual case is a worthy one, but if the impact of the change is to enable funders more latitude in unilaterally cutting levels of remuneration after work has begun, the interests of consumers generally is not well served. There needs to be certainty of remuneration. Regulators and their infrastructure should work on this premise.

Similarly other ‘consumers’ – witnesses, judges, jurors, etc, are not well served by this change. A diminution in the quality of barristers willing to undertake the risk of engaging in long cases amounts to an obvious disservice to these court users. Whereas an unrepresented client presents its own problems for many court usersthe system caters for and has to deal with such cases from time to time. In any event the considerations of this group of court users do not outweigh the public interest in deterring dishonourable conduct by third party funders.

Encouraging an independent, strong, diverse and effective legal profession

The independence and strength of the bar is not only an asset to the bar, but an asset to the public. There is a public interest, not only in maintaining but in enhancing the independence of barristers and in making them (or keeping them) strong and protected when they need to be. Though the BSB will rightlybe apprehensive of taking a step (or refusing to take a step) which seems motivated by a desire to ‘stand up for’ barristers, it is essential that the BSB does precisely that, especially where unconscionable behaviour by those that fund barristers is concerned. Standing up for barristers here is not in conflict with the interests of clients: on the contrary the automatic nature of the entitlement to withdraw per the current guidance, protects not just the bar and its independencebut,for the reasons given above, also protects consumers in general.

The BSB should not feel nervous about protecting a rule that is clear and provides an automatic protection for barristers who have been wronged. By seeking an amendment which effectively says that every case is fact-specific and that the barrister's conduct must be ‘justified’ by reference to the impact on clients, witnesses,the vulnerable etc., the BSB will erode the protection that the certainty of the existing position provides. That will weaken the bar, and that is not in the public interest.

The current position encourages funders to make an accurate assessment of their exposure to fees before counsel in instructed. The provision of latitude to funders to unilaterally reduce fees after the brief has been delivered will have the inevitable effect (a) in extreme cases of unscrupulous funders luring counsel into cases and thereafter reducing fees knowing that it will be more difficult if the changes are made for counsel then to withdraw (b) in more ordinary cases of reducing the incentive to the funder to ensure that fee exposure has been properly calculated. Neither outcome is good for the profession.

Certainty of outlay of costs is a concept gaining increasing currency in civil proceedings. For uncertainty to be introduced in criminal proceedings is swimming against the tide.

Notice

As to the suggested requirement that the barrister take steps to notify and or explain the consequences of the fundamental change, these frankly seem otiose. Insistence on an explanation at the outset of the consequences of a fundamental breach is a curious burden to impose on the relationship.No barrister is likely to depart from a case without explaining an intention to do so with sufficient notice for the funder to reverse the proposed change with the consequence in mind. The existing provisions of the code and guidance are adequate to deal with any barrister whose behaviour is peremptory or unprofessional in that regard.

Finally

A change of the sort proposed should not be made unless there is evidence that demonstrates that the existing rule does not adequately serve the regulatory objectives. The need for change should be evidence-based. If such evidence exists, it has not been shared. We doubt its existence.

The fact is that the current guidance provides an automatic assumption of the entitlement to withdraw and not to re-engage. It does not prevent barristers who have withdrawn from the case nonetheless deciding to accept instruction on the new terms. A barrister who is more concerned for the plight of a client (and/or others adversely affected) than for the effect of the funder’s behaviour on remuneration thereafter, is still able to continue to act. The current rule does not prevent voluntary behaviour of that sort. It has the merit of being worthy in the sense that it is voluntary.

Introducing an element of compulsion or anxiety, by way of requiring ‘justification’ of the barrister’s decision to withdraw from a case when there had been a fundamental unilaterally imposed change in fees, will not in the end advance the BSB’s regulatory objectives nor serve the wider interests of justice.

WESTERN CIRCUIT

April 2014