Bar Standards Board Consultation

BAR STANDARDS BOARD CONSULTATION

ON THE LEGAL SERVICES ACT 2007

Summary of the South Eastern Circuit’s response

1. Contrary to what the Consultation Paper appears to assume, the Act does not create any presumption in favour of the expansion of the business organisations through which barristers may be provide their services. The BSB must determine whether or not such expansion should occur having regard to the statutory objectives.

2. It is in the public interest that barristers’ expertise in written and oral advocacy and related advisory services be maintained.

3. Sole practice is the model that is most conducive to the maintenance of such expertise.

4. Barristers should not be allowed to practise as barristers in partnership, or to be members/managers of LDPs or ABSs, since that would be contrary to the public interest.

5. Competition law does not require that barristers be allowed to practise in partnerships, LDPs or ABSs.

6. Concerns about the position of the Criminal Bar tendering for publicly funded work can be accommodated without a wholesale change of the rules as to the types of business organisation through which barristers may provide their services.

7. The cab-rank rule is in the public interest. It should be preserved for all barristers, regardless of the types of business organisation through which they are allowed to provide their services.

8. The scope of work that barristers may undertake should not be substantially expanded.

9. Barristers should not be permitted to hold client money.

10. If, contrary to the views of the Circuit, the BSB allows barristers to practise through partnerships, LDPs or ABSs, the BSB’s regulatory remit should not extend beyond the professional conduct of barrister members. The BSB should not be the business regulator of such entities.

Response on behalf of the South-Eastern Circuit

1. This response has been prepared by a Working Group comprising Stephen Hockman QC, Patrick Gibbs QC, Ian Stern QC, Giles Powell, Richard Coleman and Emily Radcliffe.

2. We have had regard to the Consultation Paper issued by the Bar Council towards the end of 2006 “The Future for Practice at the Bar”. We note and agree with the key aims set out in paragraph 25 of that Paper, namely that:

(a) barristers should remain specialist advocates and advisors and the Bar should be seen as the main career option for those who wish to become advocates and specialist advisors;

(b) the Bar Council and the Board should have a central role in maintaining standards of advocacy; and

(c) the regulatory regime for barristers should be as light-touch as is commensurate with the proper protection of the public.

3. Before addressing the questions raised, we consider that it is important to make some observations about:

the effect of the Act;
the structure created by the Act; and
the public interest.

The effect of the Act

4. The Board should take as its starting point that the Act is permissive not mandatory as regards the expansion of the types of business organisations in which barristers may provide their services and of the functions that a barrister may perform. It remains for the Board to determine what the public interest requires having regard to the statutory objectives.

5. It would be wrong for the Board to proceed on the basis that the Act settled what the public interest requires in this regard. The relevant public interest embodied in the Act is no more and no less than that the types of organisation, as envisaged by the Act, through which a barrister provides his services, and the services that he provides, should be allowed to evolve in so far as, but only in so far as, the Board determines, in the light of the statutory objectives, that they should.

6. We therefore consider that the Board would be misdirecting itself if it approached its task on the basis that the policy of the Act is for the Board to allow to happen that which the Act enables to happen. We challenge the various statements in the Consultation Paper that indicate the Board is minded to proceed on this basis without, it seems, neutral consideration of what the public interest and the statutory objectives require (e.g. para 14, “Although concerns have been expressed about the appropriateness of legal services being provided through ABS firms, it [the Board] believes that since Parliament has legislated to permit this, it would be wrong for its rules to prohibit barristers from being involved in such firms”; para 52 – “While [the Board] is aware that there are concerns about the appropriateness of legal serves being offered through ABS firms, it believes that, since Parliament has legislated to permit this, it would be wrong for its rules to prohibit barristers from being involved in such firms.”).

The public interest

7. We continue to believe that there is a vital public interest in the maintenance of a strong independent body of lawyers specialising in advocacy and related advisory work and subject to the cab-rank rule. The word conventionally used for such a lawyer is “barrister”, as the glossary to the Consultation Paper acknowledges. It is in the public interest that that body of expertise, available to all, operating within an ethical framework developed over many years, and central to which is the cab rank rule, should be retained. We consider that this can be done only by holding on to the clearly identifiable core functions and attributes of a barrister and by preserving the cab rank rule.

8. We further believe that sole practice promotes the attributes of a barrister that it is in the public interest to protect and that a significant growth of the other business organisations under consideration involving barristers would undermine them.

9. Given the risks posed to the maintenance of the public benefits that the Board acknowledges the Bar provides, any case for change that could put those benefits at risk must surely be supported by substantial evidence of a countervailing public benefit that will accrue from change. The Consultation Paper does not, as far as we can see, identify any.

10. It seems to us the legal services landscape contemplated by the paper is one in which there will be no meaningful distinction between the two main branches of the profession, and yet the paper seems to assume that nonetheless the division should be maintained. The fusion of the two branches of the profession under a single regulator seems to us to be the logical, indeed arguably sensible, corollary of the changes contemplated by the paper. It is worthwhile stating this openly. We can see no justification for preserving the distinction between barrister and solicitor if there is no meaningful distinction between function and attributes. It seems that all that would be left would be the formal training and the regulatory jurisdiction under which the practitioner operated. That would do nothing to promote transparency of the market for the provision of legal services, and would duplicate unnecessarily regulatory costs. Different regulation and nomenclature can be rationally justified only by the maintenance in the public interest of a difference in function. If the maintenance of this definition is judged not to be in the public interest, so be it, but in that case the maintenance of separate professions under different regimes will lead only to needless complexity (multiple and overlapping regulatory regimes of the kind foreshadowed in the paper), confusion and cost. Entia non sunt multiplicanda praetor necessitatem.[1]

11. Nor does the position of employed barristers provide any justification for doing away with distinctions which otherwise exist between the two branches of the profession, and the preservation of which is otherwise judged to be in public interest. The same is true of the position of solicitor advocates if one accepts the premise that advocacy and advisory expertise derives not only from aptitude but from experience and repetition of the skill, and is more likely to thrive under the conditions in which barristers practise because they substantially focus on the provision of advocacy and advisory services.

The structure created by the Act

12. As we see it, the Act envisages that, under the over-arching supervision of the Legal Services Board, that there will be a series of separate regulatory regimes. Currently there are two regimes which are relevant for present purposes. One, the regime for barristers, is subject to the regulation of the Board. The other, the regime for solicitors, is subject to the regulation of the Solicitors’ Regulation Authority. Other regimes may, in due course, be authorised by the Legal Services Board but they do not exist at present. We note that the Consultation Paper acknowledges at paragraph 96 on page 27 that (presumably by reason of paragraph 2(1) of Schedule 4 to the Act) the Board may have no legal power at present to regulate LDPs. We believe that currently neither the Board nor the Solicitors’ Regulation Authority has power to regulate either LDPs or alternative business structures (ABS). As stated in paragraph 13 on page 5, the Act also establishes an interim regime for LDPs to be regulated by the SRA. It is suggested that LDPs can comprise, for example, a partnership of solicitors and barristers. Up to 25% of the managers may be non-lawyers but the partners themselves must all be lawyers. The SRA is said to be developing plans to regulate LDPs from Spring 2009, although we understand that the approval of the Legal Services Consultative Panel would be required .

Question 1

The General Approach and the “cab-rank” rule

Q. 1 Do you agree with the general approach set out in paragraphs 16 to 20 above?

Paragraphs 16 to 20 and 51 to 55 of the Consultation:

16. The Board intends to keep the public interest at the centre of its decisions.

17. The “cab-rank” rule: The “cab-rank” rule is relevant to many of the issues discussed in the paper. This rule requires self-employed barristers to accept work which they have time to undertake, which is within their expertise and for which an appropriate fee is offered, irrespective of the client, the nature and strength of the case or of their view of the client or his behaviour. The rule does not apply to solicitors or to barristers employed by firms of solicitors.

18. The Board considers that it would not be possible to apply the “cab-rank” rule to barristers practising in ABSs or LDPs. It sees difficulties, in terms of restrictive practices, in applying the rule to partnerships of barristers alone (if such partnerships are allowed) while disapplying the rule to ABSs and LDPs. The rule could still apply to self-employed barristers: the paper asks whether this could be seen as justifiable in the public interest.

19. The substance of rule 601 of the Code (which prohibits barristers from withholding advocacy services on the grounds that the nature of the case, or the conduct or opinions of the client are objectionable) will in any case be retained.

Part III: Issues relating to new business structures and partnerships

20. Barristers as managers of ABS firms: The Board believes that the rules preventing barristers from supplying legal services through other persons and companies should be relaxed. It proposes that barristers should be able to practice while managers or employees of ABS firms.

The Board’s approach: general

51. In considering the issues outlined in the previous paragraph the Board has adopted the following approach.

52. First, the Board considers that it is likely that some barristers will wish to take advantage of the provisions of the new regulatory regime. While it is aware that there are concerns about the appropriateness of legal services being offered through ABS firms, it believes that, since Parliament has legislated to permit this, it would be wrong for its rules to prohibit barristers from being involved in such firms. This, however, has a number of implications for the present rules. In particular:

(a) it will be difficult to justify the existing position whereby barristers are prohibited from entering into partnership with each other, or with solicitors, if they can practise in an ABS firm with solicitors and other barristers together, or in a firm of barristers in which non-lawyers have a shareholding;

(b) it will be difficult or impossible to impose a number of the rules governing self-employed barristers, notably the “cab-rank” rule, on barristers working in ABS or LDP structures, and this may call into question whether those rules should continue apply to the self-employed bar;

53. Secondly, the Board is very conscious of the virtues of the independent Bar. Members of the public can seek specialist counsel in all areas of law, and cannot be denied the services of the counsel of their choice by the actions of other persons. Barristers in independent practice are free to focus on advocacy and on giving specialist legal advice without the burdens involved in conducting litigation and managing clients’ legal affairs. Their overhead costs are low. The courts can have confidence in a barrister’s independence. The Board would not wish to weaken these virtues. However, those virtues are generally valuable to the clients of the Bar; and normal market forces can be expected to sustain the majority of them, while the protection of the independence of the advocate is one of the professional principles that the LSB and through it the approved regulators are bound to promote. The Act permits the emergence of new forms of business organisation in which barristers can participate; but it does not compel such participation. It would in the Board’s view be wrong to base consideration of the issues discussed in this paper on the assumption that new forms of business organisation are bound to drive out existing forms, or that the virtues of the independent Bar cannot be preserved under the new regulatory regime.