Law Society warns solicitors to protect themselves against "biased" barristers' terms

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25 January 2013


Scott-Moncrieff: Bar’s proposal favours the barrister

The Law Society has urged solicitors to protect themselves against the new terms of business being introduced by the Bar next week because they are “weighted strongly” in favour of barristers.

From 31 January the traditional default system of non-contractual terms will be replaced by new standard conditions of contract that will allow barristers – and solicitors – to sue on them in court.

Controversially, the cab-rank rule will apply only to work undertaken on the new standard conditions or on terms which barristers or their chambers have published as their standard terms.

The withdrawal of credit list will be replaced by an advisory list of defaulting solicitors and barristers will have the right to refuse instructions on credit from those on it.

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Issuing a practice note yesterday, the Law Society said that although the new standard conditions are not formally default terms and barristers will be free to adapt them or agree different terms, “it is likely that the majority of chambers will adopt the new terms wholesale”.

The note said: “The Law Society is concerned that, under the terms, the balance of obligations is weighted strongly in favour of barristers. It is our view that the relationship between solicitors and barristers is a commercial one, the terms of which ought to be agreed between themselves. It is, however, open to solicitors to negotiate alternative terms.”

The practice note included a model letter for solicitors to send to barristers seeking changes to the contract terms and offering “alternative and more equitable wording”.

It identified nine clauses raising concern, particularly around fees and payment, as well as a bid to limit barristers' liability. One provides for an agreed hourly rate to be subject to reasonable periodic review by the barrister and entitles the barrister to treat an agreement as terminated if the solicitor does not agree to any variation of the rate. The society said: “There may well be obvious difficulties with this and you should discuss with your client whether they are content for this to be agreed.”

The terms also require the barrister to give express written permission if a solicitor or lay client wishes to use copies of the barrister’s work product for purposes other than those for which it was prepared.

The practice note said: “You may wish to consider how far this clause may affect your firm's knowledge management systems and how it works with the existing general law with regard to intellectual property. You may wish to agree reasonable rights with the barrister to contain advice in your firm's knowledge management systems for internal guidance only. In addition, you should discuss this clause with the client and your insurers before agreeing to it.”

Law Society president Lucy Scott-Moncrieff said: “Of course there should be a contract to bring the commercial relationship between solicitors and barristers in line with standard practice rather than the previous outdated system. However, there must be a balance between the two interests and most importantly, that of the client.

“In our view, the Bar’s proposal favours the barrister and gives the solicitor – and therefore the client – insufficient control or effective remedy in the event of inadequate performance by the barrister.”

More than a decade ago the Bar Council and Law Society first began discussing an overhaul of the non-contractual terms of work but the talks collapsed in 2008, after which the Bar Council has worked unilaterally to develop the new standard conditions.

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3 Responses to “Law Society warns solicitors to protect themselves against "biased" barristers' terms”

  1. A Barrister is long and short a supplier of a service.

    At the end of the day as a supplier they are not in a position to dictate terms, just as a supplier of a tin of beans to a supermarket, has very limited negotiating
    Power.

    Draft your own terms if not happy or do it yourself

  2. Just look at Reality on January 26th, 2013 at 8:49 pm
  3. I suppose it is bound to be a part of business for one party to seek protect its commercial activity. What is of concern is the fact the reference in the article to a suggestion that talks started over a decade ago and collapsed in 2008! That is shocking!

  4. Ann O on January 27th, 2013 at 8:56 am
  5. Solicitors are in the driving seat here. Solicitors incur substantial marketing costs to secure new business which the Bar gets for free. Solicitors will refuse to accept any onerous terms, and will only deal with barristers chambers, which are prepared to accept reasonable contractual terms.

    It is highly likely, particularly in the Personal Industry sector, that there will be less work available for counsel. Additionally, many will be obliged to work on a CFA basis, without payment of any success fee. The new MoJ costs proposals, and CFA Regs, will make it financial suicide for any solicitors practice to reduce their gross fees any more by agreeing to pay counsel a success fee. The base fee will be the norm.

    Forensic calculations demonstrate that most PI solicitors practices will suffer reductions of gross fees in the region of 30% to 50%, consequent upon the imposition of the MoJ Fastrack fees proposals ( see Helen Grant MP’s MoJ letter dated 19/11/12). This will cause the demise, over 18 months, of most PI practices.

    There are 11000 PI solicitors. There are however many more legal executives, clerks admin staff etc associated with such law firms. Wholesale redundacies will ensue. So if any firm can succeed in keeping its head above water, it will not be able to pay CFA success fees to counsel. Chambers will have to take pragmatic commercial decisions and accept that like their solicitor bretheren, a reduced fee will be the norm in the future. Which is of course much better than no fee at all. It is time for the Bar to wake up to the commercial realities of work generation and reduced fee income in the PI world.

    As a footnote, it has been speculated that such redundancies might number as many as 100,000 people, with families behind that figure being affected too ( another 300,000 to 400,000?).

    This must be a political own goal for the Conservative Party, when it is very clear that the Cabinet and our PM, are fully behind these woefully ill thought out remuneration caps. The winners will be the insurers, and the government may well eventually learn of their gross errors when the electorate vote in 2015. Marginal constituencies will be at risk. In the meantime the Conservatives will have destroyed around 100,000 jobs which is off the scale when it compares to Comet, Jessops and Blockbuster.

    Finally, where are the insurance monies going? Guernsey? BVI’s? Investigative journalism could have a field day here. Lower insurance premiums – not a chance! hich CEO of any of the 20 major liability insurers has given such a guarantee?

    For the record, I voted Conservative at the last election, so this is not a political rant.

  6. Martin Coyne on January 28th, 2013 at 5:45 pm

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