Socrates case stayed for quantum discussions as tribunal orders Law Society to pay up to £230,000 in costs

Law Society: claim was quantified at £112,500

The fall-out from the decision that the Law Society breached competition law looks set to last for several more months after the Competition Appeal Tribunal laid out the timetable for determining damages.

It also ordered the society to pay Socrates Training’s costs up to a maximum of the approved budget of £230,000.

Last month, the tribunal ruled that the Law Society abused its dominant position by requiring over 3,000 law firms to buy its own fraud training in order to maintain their Conveyancing Quality Scheme (CQS) accreditation.

The consequential order said that the Law Society “shall not oblige CQS accredited firms to purchase exclusively from the Law Society mandatory training in mortgage fraud, anti-money laundering and financial crime required for CQS accreditation”.

The society has withdrawn the financial crime module, the only one still live, as a result.

The proceedings have been stayed for two months to allow the parties to seek agreement on quantum. If this fails, Socrates has until 1 September to serve points of claim on quantum and the society then 28 days to respond.

Socrates quantified damages in the claim form at £112,500, on the basis that the society’s conduct lost it the custom of 75 law firm clients that would spend some £600 each for two and a half years.

On costs, the tribunal ordered Chancery Lane to pay Socrates’ costs of mediation, to be assessed if not agreed, up to £4,000 plus the company’s share of the mediator’s fees, and also its costs of the proceedings up to a maximum of £230,000, to be assessed on the standard basis if not agreed.

The society’s budget had been capped at £402,500, though it had originally sought £637,000.

Commenting on the tribunal ruling, Robert Vidal, head of the EU, competition and trade group for the UK at City firm Taylor Wessing, said: “The success of Socrates and the finding that the Law Society has behaved illegally will be highly embarrassing to the body that represents solicitors in England and Wales.

“Not only will the Law Society likely have to pay damages and costs to Socrates, but it will now have to rethink its ability to finance itself via the CQS.

“Given that over £1.5m per annum came from this training programme, the Law Society may now find that its training programme is not as profitable as it once was. Indeed, the Law Society has confirmed that it is ceasing sale of the [relevant training] with immediate effect, and will be considering its options in this regard.”

The society has not yet announced whether or not it intends to appeal.

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