The Competition Appeal Tribunal will today begin hearing a training provider’s claim that the Law Society acted anti-competitively by requiring law firms to buy its own training in order to maintain their Conveyancing Quality Scheme (CQS) accreditation.
The case brought by North London-based Socrates Training, which provides anti-money laundering (AML) training, among other compliance-related courses, is scheduled to last four days, and will include evidence via video-link by previous Law Society president Jonathan Smithers, who is now working for the Law Council of Australia.
It will also feature experts giving evidence concurrently, a practice introduced by the Jackson reforms and known colloquially as ‘hot-tubbing’.
The case was allocated to the tribunal’s fast-track procedure, meaning that the hearing comes just seven months after the claim was filed.
Mr Justice Roth, president of the Competition Appeal Tribunal, heads the three-man bench, which also features William Allen, a former competition law partner at City giant Linklaters, and Stephen Wilks, emeritus professor of politics at Exeter University and a one-time member of the Competition Commission (as was).
The case is being brought under section 47A of the Competition Act 1998, alleging anti-competitive behaviour. Socrates claims that “at some point, believed to early in 2015”, the Law Society changed its rules to require firms as a condition of CQS accreditation to “buy both AML online training and mortgage fraud training” from itself.
The claim alleged that the society was “dominant in the market for the provision of quality certification/accreditation services to conveyancing firms, and [its] insistence that firms must buy their AML, mortgage fraud or other financial crime training from itself rather than from the claimant or any other provider, is an abuse of its dominant position, restricting competition in the downstream market for the provision of AML and financial crime training and causing loss to the claimant”.
According to Socrates, the inclusion of a tying clause of this kind is specifically prohibited under applicable law as being anti-competitive.
As well as damages, it is seeking a declaration that the society has abused its dominant position, an injunction to restrain it from continuing to do so, and a declaration that the tying clause is “illegal and unenforceable”.
Bernard George, a solicitor and Socrates director, and formerly director of the College of Law’s London operations, said: “We are sorry to be suing the Law Society but we had no choice. The Law Society must not use the CQS to force firms to buy its training. That is a serious abuse of a dominant position. Our advice is that this is a textbook case, and the Law Society has no defence.
“At the root of the case is a conflict of interests. The Law Society should not be both running the CQS accreditation scheme and trading as a training provider. Or at least it has to manage that conflict carefully. Instead, the Law Society has used the CQS to rig the training market. It seems to us that if a solicitor in private practice did something like that they might be struck off.
“Law firms need training, but they must be free to buy the best training they can get, not just whatever the Law Society has to sell.”
The Law Society, which has previously dismissed the claim as being “wholly without merit”, declined to comment further ahead of the trial.
In June, Roth J capped the Law Society’s recoverable costs in the event of winning at £350,000, after finding that its proposed budget of £637,000 was disproportionate. It has instructed City firm Norton Rose Fulbright and a QC.
Socrates put forward a budget of £220,000, which the judge capped at £200,000. It is handling the claim in-house, with limited external help from solicitors, and has instructed junior counsel.