31 July 2012

At last – standard contractual terms between barristers and solicitors clear final hurdle

Standard contractual terms between solicitors and barristers are set to become a reality at long last after the Legal Services Board (LSB) approved controversial changes to the cab-rank rule that will underpin them – albeit with some reluctance.

LSB chief executive Chris Kenny said that while the Bar Standards Board’s (BSB) approach to the issue “is not one which the LSB considers to be the most appropriate”, nonetheless it could find no reason to refuse the application, which is the statutory test for rule changes.

However, he stressed that the decision does not constitute endorsement of the cab-rank rule itself, which will be considered as part of the BSB’s wider review of its code of conduct.

Currently, while increasingly barristers are seeking to agree contractual terms with solicitors and so mitigate the risk of non-payment of fees, they are not obliged to accept instructions on negotiated contractual terms. The BSB argues that this undermines the cab-rank rule.

Under the BSB’s scheme, if a solicitor seeks to instruct a barrister on its New Contractual Terms (NCT) or on the individual barrister’s own advertised terms, the cab-rank rule will apply. If they want to instruct them on any other terms, it will not. The BSB expects many barristers to use the NCT.

Further, if a firm of solicitors does not pay a barrister’s fees, and an award made by the joint Law Society/Bar Council tribunal remains unpaid, and/or a court has given judgment in favour of the barrister, the unpaid barrister can complain to the Bar Council under a new list of defaulting solicitors.

If the solicitors are placed on it, then the cab-rank rule will not apply to any barrister receiving instructions from those solicitors.

In January the LSB issued an unprecedented statutory warning notice that it was considering whether to reject these changes to the cab-rank rule, and while it had a year to come to a decision, has done so following a consultation with other stakeholders. Only the Law Society raised concerns in response to the consultation, primarily that the NCT are biased in favour of the barrister.

Mr Kenny noted that the Law Society did not explain in what way they are biased, adding that solicitors and barristers retain the freedom to agree terms other than the NCT.

The BSB spokesman said: “The BSB welcomes the decision and now looks forward to liaising with the Bar Council to implement and publicise the change. Details – including support available to barristers – will be available after the summer break.”

More than a decade ago the Bar Council and Law Society first began discussing an overhaul of the non-contractual terms of work which are currently the default arrangement between barristers and their instructed solicitors, and the withdrawal of credit scheme for solicitors who do not pay fees. The talks collapsed in 2008.

The BSB will now look to extend the arrangements to other legal professionals; the Association of Costs Lawyers was among those to say its members should have the benefit of them.

 

By Legal Futures

Tags: bar standards board, cab rank rule, Law Society, Legal Services Board

2 Responses to “At last – standard contractual terms between barristers and solicitors clear final hurdle”

1. I am not sure what this article says about the perceived balance of power between solicitors and the Bar. If we are asked by a client to refer to a barrister it is our job to ensure that referral is made on the most advantageous terms for the client. As such should solicitors not be seeking to contract on their standard terms of purchase rather than have terms imposed by the Bar?

mark burns on August 6th, 2012 at 3:34 pm

2. Mark, when you seek to refer a task to another professional say an expert witness do you impose your own terms on them? When you say that the referral should be made on the most advantageous terms to the client do you mean giving them the option not to pay. At the moment the client can refuse to pay and the barrister can do little about it. If the solicitor refuses to meet the clients obligations then the after 6 months of reminders and letters the barrister can report the matter to the Bar Council. It then takes the Bar Council about 12 months to investigate and blacklist the solicitor so that no Chambers can do work for them unless they are paid upfront. We waste vast sums of money chasing around after unpaid debts which solicitors are liable for full in the knowledge that it will take 18 months for sanctions to be put in place and those sanctions have little impact.

   It seems the balance of power has for a very long time been shifted heavily in favour of solicitors and a little rebalancing is long overdue.

Scott Baldwin on August 9th, 2012 at 3:19 pm