The Bar Council has accepted that it breached the independence of the Bar Standards Board (BSB) by interfering in controversial changes to the cab-rank rule, it emerged today.

The Legal Services Board (LSB), which initiated an investigation in June, has however agreed to an informal resolution, having considered censuring the Bar Council.

This involves the Bar Council and BSB accepting the investigation’s findings and agreeing steps to remedy the problems identified (see below).

The investigation focused on the Bar Council’s influence on changes made by the BSB to the cab-rank rule, which were to facilitate the new contractual terms between barristers and solicitors.

The LSB concluded that the Bar Council failed to act in a way which was compatible with the principle of regulatory independence. It breached the requirements of the board’s internal governance rules, which aim to ensure that the exercise of regulatory functions is independent of representative influence.

Its report said: “We consider that in this case, the undue influence or control that the Bar Council had over the development of the new contractual terms and the rule change application process were likely to result in preferential treatment for its points of view and desired outcomes.”

This had “an adverse impact on protecting and promoting the public interest”, although did not go so far as to undermine the rule of law, the LSB said. It also found no evidence that the Bar Council deliberately sought to mislead the LSB.

Further, rules made by the Bar Council about the operation of the list of defaulting solicitors “cannot legitimately be considered to have been made for the purposes of representing or promoting the interests of barristers”, because barristers need to have paid the Bar Council’s member’s services fee to take advantage of it.

The LSB was also concerned to learn that Bar Council representatives were present during private meetings of the BSB.

In all, the LSB said, “the Bar Council’s acts (and omissions identified during the investigation), or a series of acts (or omissions identified during the investigation) were unreasonable”.

The Bar Council has given the following undertakings to close the investigation:

• It will develop arrangements relating to the way that it and the BSB interact, to ensure compliance with the internal governance rules;
• It will develop arrangements so that Bar Council representatives do not attend non-public sessions of BSB meetings other than in exceptional circumstances, with the reasons for attendance documented and made public;
• Measures will be implemented so that the arrangements introduced by the BSB’s application (that barristers can add solicitors who fail to pay their fees to a list so that all barristers are not obliged to accept work from them in future) are run and charged for by the BSB, rather than (as at present) by the Bar Council and charged for via an extra representative body fee; and
• By the end of Jul 2014 the BSB will carry out a review of the arrangements introduced by the application under investigation, of whether it is appropriate for them to remain in its regulatory arrangements.

A BSB spokeswoman said: “We note the LSB’s report and acknowledge the findings – the majority of which refer to matters from some time ago. We have already put in place measures to avoid a recurrence.”

The Bar Council had no comment.

Tags: Bar Council, bar standards board, internal governance rules, Legal Services Board