Training provider sues Law Society over “anti-competitive” CQS rule
Chancery Lane: accused of competition law breach
A training provider is suing the Law Society for “six-figure damages” over its claim that Chancery Lane is acting anti-competitively by requiring law firms to buy its training in order to maintain their Conveyancing Quality Scheme (CQS) accreditation.
North London-based Socrates Training, which provides anti-money laundering (AML) training, among other compliance-related courses, applied to the Competition Appeals Tribunal earlier this month under section 47A of the Competition Act 1998, alleging anti-competitive behaviour.
Socrates, which was established in 2003, claimed that “at some point, believed to early in 2015”, the Law Society changed its rules to require firms as a condition of CQS accreditation to “buy both AML online training and mortgage fraud training” from itself.
The claim alleged that the society was “dominant in the market for the provision of quality certification/accreditation services to conveyancing firms, and [its] insistence that firms must buy their AML, mortgage fraud or other financial crime training from itself rather than from the claimant or any other provider, is an abuse of its dominant position, restricting competition in the downstream market for the provision of AML and financial crime training and causing loss to the claimant”.
A Law Society spokesman dismissed the claim as “wholly without merit”.
Socrates has applied for the claim to be fast-tracked, meaning the case could be heard within six months. As well as damages, interest, and costs, it is seeking “a declaration that the tying clause is illegal and unenforceable” and an injuction to restrain the society “from contining to abuse its dominant position”.
Bernard George, a solicitor and Socrates director, formerly director of the College of Law’s London operations, who at one time taught competition law at the college, told Legal Futures his business was pursuing “six-figure damages”.
He said that while it was hard to quantify the exact loss to his company, it had become “a great deal harder for us to attract new subscribers over the last year”. Although firms may cancel their subscriptions without saying why, “we know that individual firms have told us ‘we are terribly sorry but we can no longer renew our subscriptions because the Law Society no longer allows us that freedom’,” he said.
He added that when Socrates contacted Chancery Lane to complain in January, it replied that it “had taken legal advice which had confirmed that all their arrangements were lawful. That astonished me”.
He said: “All we want is to be able to compete on fair terms. If people think the Law Society’s training is better than ours, they should buy it. But they should have the choice.”
Mr George accused the society of a conflict of interest and said Socrates had no option but to challenge it: “The Law Society is huge. You feel like you have just got into a fight with the biggest kid in the playground, or even the headmaster. But when he is trying to eat your lunch, what can you do?”
He continued: “We are bringing this case not just for ourselves, but to protect law firms from their own professional body.
“Other training providers are also concerned about this monopoly. But they are naturally reluctant to take on [the society]. So we have had to fight this one on our own.”
The Law Society spokeswoman said: “The Law Society’s Conveyancing Quality Scheme provides a quality standard for solicitors delivering residential conveyancing. A claim has been made by Socrates Training Limited in relation to training as part of the CQS programme. The Law Society believes this claim to be wholly without merit.”
Tags: AML training, competition law, CQS accreditation
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