News in brief: SRA renewals delay, referral fee “ignorance”, and much more

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By Legal Futures

24 October 2011

Court of Appeal: appearance of apparent bias

Court of Appeal quashes ILEX disciplinary ruling

The Court of Appeal has quashed an order by the ILEX Disciplinary Tribunal – which had been confirmed by its appeal tribunal – to exclude a student from membership of ILEX for five years and for her to pay costs of £1,700 over an allegation of cheating during her exams.

The court said the presence of an ILEX council member on the disciplinary tribunal and the then vice-president on the appeal tribunal gave the impression of apparent bias, given their roles in the representative arm of the Institute and the risk of undermining independent regulation – although there was no evidence of any actual bias.

Ian Watson, chief executive of ILEX Professional Standards (IPS), said: “We are disappointed with the appeal court’s decision. We will be considering its impact both in relation to the question of further appeal and the wider ramifications of the decision. It is largely of historic significance as the rules under which the case was heard originally, which were adopted in 2002, were replaced in 2010 to meet the requirements of the Legal Services Act.

“The decision rests on the issue of apparent bias. We are pleased that there was no claim that the decisions of the IPS tribunals were actually biased or that process under the disciplinary rules was applied unfairly.”

SRA renewals delay

Uncertainty over the Solicitors Regulation Authority’s (SRA) new IT system means it will not confirm the method by which solicitors will be able to renew their registration, recognition or practising certificate until three days before the 21 November start-date. On 18 November it will confirm whether this will be an online or paper-based process.

A statement from the SRA said: “We are working hard to introduce the new online renewals process, but will not do so until we are confident that it is reliable.” The deadline for the renewals process has been extended to 23 December, with all existing documents remaining valid during any interim period caused by the late start of the process.

Referral fee “ignorance”

More than half (57%) of young drivers are unaware that, after an accident, insurance firms often pass personal details to a solicitor, car hire firm or garage in return for a referral fee, a survey conducted for the House of Commons’ transport select committee has found.

The committee is currently investigating the cost of motor insurance and chairwoman Louise Ellman MP said the finding was “revealing”. She continued: “This highlights why the committee called for referral fees to be made more transparent… earlier this year.”

Survey: outsourcing is the future

Law firms believe that outsourcing business and legal functions will help them fight off competition from new entrants but many are failing to act, according to a survey by Connect2Law, the lawyer-to-lawyer referral network set up by Manchester firm Pannone.

Apathy and arrogance among lawyers is being blamed for the lack of action by many to explore the massive cost-saving opportunities presented by outsourcing back office functions such as HR, marketing and IT.

With only 11% of the 169 firms surveyed viewing the Legal Services Act as an opportunity, 77.3% saw outsourcing business processes as helping them compete with the back-office resources that new entrants to the market have at their disposal. But only 52% had actually outsourced any back-office functions, mainly just minor functions such as payroll and typing.

Charles Layfield, head of Connect2Law, said: “Outsourcing business functions will be the key to survival for many firms in the new legal landscape and the dynamic ones recognise the huge advantages it offers – mainly reducing their cost base enabling their business to grow. However, there is still reluctance by many lawyers who arrogantly assume they can do everything from IT to marketing.”

The most popular areas for future outsourcing from law firms were marketing (43.2%), IT (33.2%) and HR (26.3%).

Silence continues over Law Society compliance

There is still no word from the Legal Services Board over its decision on the Law Society/SRA’s certificate of compliance with the board’s internal governance rules. The certificate was meant to be submitted in draft by 30 April and a decision made by 30 September. The process for next year’s certificate will start soon.

A board spokesman said: “We expect final proposals from the Law Society and SRA very shortly. These are the subject of current consideration in the senior governance mechanisms of both bodies.” See our recent blog on this subject.

First successes for QLTS

Three foreign lawyers have become the first to be admitted to the roll of solicitors after completed the SRA’s new Qualified Lawyers Transfer Scheme, which began in September 2010. The scheme replaced the experience requirement required under the predecessor scheme with practical assessments.

Harrison Drury unveils fixed-fee service

Lancashire firm Harrison Drury has become the latest to embrace fixed fees and offer businesses the chance to access a full range of commercial law services for a fixed monthly price. Managing partner John Chesworth said: “We have spent 12 months speaking to clients and professional partners about provision of legal services and, at a time when the need for clear advice at an early stage has never been greater, value for money is the biggest issue for businesses.

“Many business owners are getting frustrated when they pick up the phone to chat something through with their solicitor and afterwards they receive a bill. This leads to a feeling that solicitors should only be contacted in extreme cases, and can result in more legal problems arising because advice is not taken early enough.”

The service called HD Anytime, where the fixed fee is set relative to the client’s turnover and number of employees, includes a 24/7 legal hotline to a dedicated relationship manager; preliminary meetings to discuss any issue affecting the business; commercial dispute reports giving clear guidance on the merits, costs and possible outcomes; annual review and updates of various documents and contracts; employment law service; and monitoring of up to 25 customers and unlimited first debt letters to aged debtors.

Quinn reassurance

The Law Society says it has received sufficient assurances from the Irish government and the joint administrators of Quinn Insurance Limited that the interests of the 500-plus solicitors who have run-off professional indemnity insurance cover with Quinn will not be affected by the transfer of some of its insurance business to Liberty Mutual Direct Insurance Company Limited.

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