LSB issues Bar Standards Board with warning notice over cab-rank rule changes

Kenny: board remains concerned with important aspects of the proposed changes

The long-running saga over standard contractual terms between barristers and solicitors has hit another hurdle after the Legal Services Board (LSB) issued a statutory warning notice that it is considering whether to reject changes to the cab-rank rule that would underpin them.

The reforms put forward by the Bar Standards Board (BSB) would mean the rule would not apply to barristers receiving instructions from solicitors who refused the BSB’s New Contractual Terms (NCT) or were on a new list of defaulting solicitors who have failed to pay counsel’s fees.

It is the first time the LSB has used this power, contained in schedule 4 of the Legal Services Act 2007.

The LSB had used up the three months it had to consider the BSB’s application, and had it not issued the warning notice, the rule change would automatically have come into effect yesterday. It now has a further year, extendable by another six months, to consider the changes, and has published a lengthy list of its concerns. It has also pledged consultation with a range of stakeholders.

More than a decade ago the Bar Council and Law Society first began discussing an overhaul of the non-contractual terms of work which are currently the default arrangement between barristers and their instructed solicitors, and the withdrawal of credit scheme for sol

icitors who do not pay fees.

After negotiations collapsed in 2008, the Bar Council and then the BSB took on the changes unilaterally. Under the proposed scheme, if a solicitor sought to instruct a barrister on the NCT – annexed to the Bar Code of Conduct – or on the individual barrister’s own advertised terms, the cab-rank rule would apply. If they sought to instruct on any other terms, the rule would not apply. The BSB expects many barristers to use the NCT.

Further, if a firm of solicitors did not pay a barrister’s fees, and an award made by the joint Law Society/Bar Council tribunal remained unpaid, and/or a court had given judgment in favour of the barrister, the unpaid barrister could complain to the Bar Council under the list of defaulting solicitors scheme. If the solicitors were placed on it, then the cab-rank rule would not apply to any barrister receiving instructions from those solicitors.

In a letter to BSB chairman Baroness Deech, LSB chief executive Chris Kenny said: “The board remains concerned with important aspects of the proposed changes including, but not limited to, the proportionality of the proposed change, the impact of potentially restricting the availability of the cab-rank rule and/or the terms of which solicitors instruct barristers, and the process by which the proposals have been developed.”

A BSB spokeswoman told Legal Futures they regretted not having been able to complete the application process in the initial three months – the LSB said it received more information from the BSB last week but there was not enough time to consider it in detail.

She said there were ongoing discussions with the LSB. “We are very happy to be working co-operatively with them.”



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