Barristers have been warned about instructing solicitors who are charging clients more for their services than counsel themselves are charging.
The Bar Council has also cautioned self-employed barristers to be careful not to enter arrangements with solicitors which inadvertently turn them into employed barristers.
The advice came in updated Bar Council guidance on retainers and other fee arrangements, which had only been issued last November. That included advice about the need to resist pressure from big clients and government departments to agree not to act against them in the future if they want instructions.
The update guidance said barristers needed to take care with “work arrangements which are different from standard referral work from solicitors” when it came to the basis on which the client is charged for their work, and specifically whether they were being charged as disbursements.
“The Bar Council is aware that in some situations, solicitors are charging clients more for the services of barristers who practise ordinarily as self-employed barristers than the barristers themselves are charging,” it said.
“If the arrangement is one in which your fees are genuinely a cost to the solicitors themselves, and not a disbursement, then this may be permissible on the part of your solicitors, at least if it is in the client’s best interests in all the circumstances. It may also be permissible if it is done with the informed agreement of the client, at least if the client is a sophisticated commercial client.
“Where your fees ought to be charged as a disbursement, however, this would be quite wrong, and could raise serious questions about your solicitors’ own professional conduct.”
The guidance told barristers that “in most circumstances, this will not be an issue for you”, but added: “You should ensure, however, that you are not actively and knowingly involved in creating or entering into an arrangement which involves charging the client more for your services than you are charging in circumstances in which this is unlawful or in clear breach of your solicitor’s duties to the client.”
The guidance said that to be an employed barrister under Bar Standards Board rules, an individual’s legal status does not need to be that of an employee; “it is possible to be a self-employed, independent contractor in law whilst also an ‘employed barrister’ under the BSB Handbook”.
It explained: “As a result, many types of short-term fixed-period work (including short-term ‘secondments’ to solicitors’ firms) undertaken by self-employed barristers under a written contract may well involve those barristers working as ‘employed barristers’ during that period.”
The guidance outlined a series of issues that barrister needed to consider in such situations, including clarity on who is the client, their legal duties, and insurance.