Barristers could end up uninsured and in financial hardship if they agree to variations of their new standard terms of contract recommended by the Law Society, the Bar Council has warned.
It said it was “surprised and disappointed” at the tone of Chancery Lane’s practice note, which complained that the terms were “strongly weighted” in favour of barristers.
The practice note was issued last week to guide solicitors on the terms, and suggested variations that they should consider demanding from barristers.
From today the traditional default system of non-contractual terms has been replaced by these standard conditions of contract that will allow barristers – and solicitors – to sue on them in court.
In guidance issued on Tuesday in response to the practice note, the Bar Council pointed out that the terms had been approved by Bar Standards Board and then the Legal Services Board after a consultation which included the Law Society.
But it added: “Of greater importance than such disagreements is that the Law Society’s proposed variations give rise to some serious potential difficulties. For example, some of the variations run counter to guidance already approved by the Law Society, and some might lead to barristers incurring liabilities which are not covered by their professional indemnity insurance, resulting in a risk of professional misconduct and detriment to lay clients.
“One would give the solicitor absolute discretion about when the barrister should be paid, which could lead to financial hardship for the barrister unless proper safeguards were agreed.”
The Bar Council was particularly worried about three proposed variations to the provision on barristers’ liability, none of which it said counsel should accept as they would leave them liable for losses which are not covered by the Bar Mutual Indemnity Fund, which in turn would be a breach of the Bar’s code of conduct.
Among the other variations to which the Bar Council objected were:
- A requirement for barristers to carry out money laundering checks on clients, rather than rely on solicitors to carry out proper checks;
- A term preventing barristers from seeking an increase in their agreed hourly rate – “the barrister should think carefully about how long the case could continue before agreeing to any such provision”, it said;
- Not allowing the barrister to raise an invoice until the solicitor has given authority, with no express duty on the solicitor to do so – “this is not in accordance with present practice, and could lead to financial hardship for the barrister as it appears to place the question of payment entirely at the solicitor’s discretion”; and
- A delay in the solicitor’s obligation to pay the barrister’s fees until the solicitor has been put in funds by the lay client.