Referendum on whether Law Society should represent solicitors

This afternoon, solicitors from a wide range of legal firms across Scotland required the Law Society of Scotland to poll its 10,500 members on whether it can continue to represent and promote the interests of solicitors, in addition to its statutory regulatory function.

Sixty-four solicitors from firms in Glasgow and Edinburgh have signed a formal 'requisition' which compels the holding of a referendum under the Law Society of Scotland's constitution. The Glasgow Bar Association, MacRoberts, and Govan Law Centre are concerned that the Law Society cannot continue in its 'dual function' as both regulator and representative of solicitors in light of the Legal Services (Scotland) Bill.

Section 92 of the Bill gives the Scottish Government unfettered power to set the number of non-solicitors on the Law Society's ruling 'Council', as well as setting the criteria for such appointments. Solicitors believe this ends the independence of the Law Society, and requires a split in representative and regulatory functions, as has already taken place in England and Wales.

In an attempt to address a Special General Meeting later this month over the proposed 'Tesco Law' provisions of the Bill, the Law Society agreed last week to hold a referendum on Alternative Business Structures ('Tesco Law'). However, this referendum would be restricted to 'Tesco Law', and today's move will ensure that the profession are also polled on the more fundamental question of whether the Law Society of Scotland can continue to represent solicitors. The President of the Law Society has been asked to convene an urgent meeting in order to include this question on their own referendum ballot, due to take place later this month.

The President of the Glasgow Bar Association, John McGovern, Solicitor-Advocate said:

"Law Society reform is a major feature of the Legal Services Bill. It is vital there is a referendum to allow the profession to decide whether, given the threat to our independence from government that the Bill poses, it still thinks the Law Society should continue to represent, as well as regulate the profession".

David Flint, Partner, MacRoberts LLP said:

"We believe that the views of individual solicitors must be ascertained on this critical issue as recent debates and polls suggest that the Law Society Council and Executive may be out of touch with members and an early referendum will allow members to have their say in a democratic fashion."

Mike Dailly, Principal Solicitor, Govan Law Centre said:

"The Law Society's role as both regulator and representative of the legal profession is rendered untenable by the Legal Services (Scotland) Bill. Solicitors should be free to choose their own independent body to represent them in the same way that workers are entitled to choose a trade union to promote their interests. A referendum will enable that choice".

Royal Faculty debates the Legal Services (Scotland) Bill

Tonight, Glasgow's Royal Faculty of Procurators hosted an informative and passionate debate on the future of Scotland's legal profession in relation to the Legal Services (Scotland) Bill.

Chaired by the Dean of the Faculty, Paul Carnan, the audience of experienced practitioners heard from Alan Campbell, Managing Partner, Dundas & Wilson LLP; Mike Dailly, Principal Solicitor, GLC; John McGovern, Solicitor-Advocate and President of the Glasgow Bar Association; and Ian Smart, President of the Law Society of Scotland. A wide ranging debate took place with excellent contributions from the audience.

Representatives from the Scottish Law Agents Society advised participants that the Parliament's Justice Committee had announced the Stage 1 report on the Bill would be delayed to allow the SGM on the ABS (Tesco Law) aspects of the Bill to take place.

The contribution from GLC's Mike Dailly is available here.

Referendum: time to protect the independence of Scotland's solicitors

The President of the Law Society of Scotland, Ian Smart, confirmed to BBC 1's Politics Show yesterday that an urgent secret ballot of every solicitor would take place, to determine whether the Society should continue to support the 'Tesco Law' provisions of the Legal Services (Scotland) Bill. The Bill would enable non-solicitors to own and control firms of solicitors, and give the Scottish Government the ability to set the number of non-solicitors, and criteria for appointment, on the Society's ruling Council.

GLC's Principal Solicitor challenged the case for Tesco law with Mr Smart on the Politics Show, and argued that the Bill would effectively end over 500 years of solicitor and legal profession independence. Mr Smart's dismissed fears upon the basis that 27% of all solicitors were already employed by banks, companies, and local authorities, and insisted that 'no one would suggest these solicitors were not independent'.

However, GLC's position is that the 27% of solicitors who are already employed by businesses or councils, do not provide advice to the public. They are in-house lawyers providing a specialist service to one client only, the entity that employs them, and therefore, this defence misses the point. The concern is that if the Bill is passed vested corporate interests would be able to provide solicitor services direcly to the public, and those services would not be independent. You cannot have 99% independence, and allowing businesses with track records in unethical and immoral practices to control access to justice is a receipe for moral hazard and disaster.

The debate on the BBC Politics Show can be watched here (105 mins in)

Today's The Scotsman article on this issue is available online here.

Unlawful tenancy premiums: a tenant's perspective

Here, GLC publishes a client's experience, in his own words, of being required to pay 'service charges' when he let a flat in Glasgow, and how he was able to obtain a full refund.

"When I moved to Glasgow 2 years ago I needed somewhere to stay. Having found a flat in the city through an agent, when I went to sign for it there were the usual rent in advance and deposits to pay but the agent also added £235 for a “service charge”. When I challenged this I was told it was to cover “preparation of the lease, credit checks, preparation of the furniture inventory” and other items they could not remember. It was also made clear that if I did not pay it then they would not sign me up for the tenancy and the whole search process would start again".

"I signed up and paid the £235 but decided to check on its legitimacy while I was a tenant. The charge is clearly a premium which is an unlawful charge in Scottish law. Not only that, but charges to the tenant for preparation of the lease are explicitly prohibited in Scottish law. At the end of the tenancy I again challenged the service charge and requested its return. The manager of the agency advised me that they were free to charge what they liked and it was a legitimate charge. He is wrong on both counts".

"Govan Law Centre clarified the legal position and agreed to contact the agent for me. At this point the agent offered to return £120. This was returned to them requesting a return of the full amount. They later offered £120 again which was again returned and an action for payment was raised at the Sheriff Court under the small claims system".

"The immediate response was for the agent to refund the charge in full and the costs of lodging the claim with the court. However they still maintain this is a good will gesture and they are entitled to charge premiums in this way. Interestingly the letter says “any prospective tenant has a choice whether they wish to take up the services we offer” so clearly they still intend to refuse tenancies unless this premium is paid".

"The message from this claim is that agents and landlords will probably hold out to the bitter end but if challenged through court, will refund your money."

Days of 'debt farmers' numbered as Parliamentary consensus emerges

A strong consensus emerged in the Scottish Parliament yesterday, for the statutory regulation of property factors, in a debate led by Patricia Ferguson MSP, sponsor of the Property Factors (Scotland) Bill. The Official Report of the debate can be read here. You can watch the debate here.

The bill is assisted by GLC's Parliamentary Unit, and in our experience there is a dire need to protect homeowners from rogue factors, poor practice, and in many cases, financial exploitation. Housing Minister, Alex Neil MSP, said he wanted to sit down with Ms Ferguson, and MSPs from other parties, and would give serious consideration to supporting her bill. The Minister advised that resolving the problems around property factors was a 'priority issue' for the Scottish Government.

In opening the debate Ms Ferguson gave examples of the practices of one factor, whom she described as a 'debt farmer':

"Mr and Mrs A are being sued by their factor for almost £3,000. They have been sued several times over the last few years by the company, each time for several hundred pounds that is, ostensibly, due for administration charges, compound interest and legal fees. Their factors are, in my view, nothing more than debt farmers who grow vulnerable customer's debts on a weekly basis by applying excessive administration charges, compound interest and expenses".

"In this case, decrees prevent the family from opening a bank account. Their elderly and frail parents were sued by the same company and were made bankrupt. The family had to find £5,000 to pay the factor, even though the bulk of the sums that were due were for not the original debt but for administration charges, compound interest and legal fees".

Ms Ferguson's motion, as amended, was agreed to by the Parliament:

That the Parliament notes that the Office of Fair Trading market study into the property management market found that the market is not working well for consumers in Scotland; welcomes the recent cross-party support for proposals to require property factors to register and to make provision for an accessible form of dispute resolution between homeowners and property factors; further welcomes this positive progress toward the introduction of legislation to ensure better accountability of property managers for their standards and the services that they provide; seeks to ensure that the appropriate authorities are given the powers necessary for effective enforcement of any new legislation, and calls on the Scottish Government to give consideration to the introduction of a mandatory accreditation scheme to cover private, public and voluntary sector property managers.

GLC believes we are now considerably much closer to securing statutory protection for Scottish homeowners against bad and exploitative factoring practices.

Solicitors call for split in Law Society roles

The Herald reports that the regulatory body for Scotland’s 10,500 solicitors faces a damaging schism following news that three major law firms want to break away. The Govan Law Centre, MacRoberts and Thomsons claim the Law Society of Scotland’s independence has been compromised.

They have now allied themselves with the Glasgow Bar Association (GBA), and have warned that the society’s backing of so-called “Tesco law” threatens to undermine ­centuries of independent legal representation in Scotland. The GBA has called for a ­referendum of the country’s solicitors, questioning whether the Law Society should continue to represent them.

The row is about two different parts of the Legal Services Bill which is currently going through the Scottish Parliament. In addition to the ability of banks and large vested corporate interests to control solicitors, concern is focused on section 92 of the Legal Services Bill which provides for direct Government control over Scotland's legal profession. In relation to membership of the legal profession's governing body, section 92 provides that:

"The Scottish Ministers may by regulations— (a) specify—
(i) such additional criteria as they consider appropriate for
appointability as non-solicitor members,
(ii) the number of non-solicitor members, or proportion of the nonsolicitor
part of the membership, in relation to whom the criteria are to apply,
(b) prescribe a minimum—
(i) number of non-solicitor members, or
(ii) proportion of the membership that is to comprise non-solicitor
members, if they believe that such prescription is necessary for ensuring that the
number or proportion of non-solicitor members is adequate".

John McGovern, the president of the Glasgow Bar Association, said: “The public and profession expect solicitors to be ­independent – and that should be non-negotiable. Unfortunately the Law Society seems to have negotiated a bill which gives the government certain control over the profession.”

There will be a “special ­general meeting” of the society later this month at which the GBA and others want to overturn the ­decision to support “Tesco law”. Mike Dailly, head of Govan Law Centre, said: “People are starting to realise the bill will be a disaster because it will end the independence of legal firms.

“The key problem is that ­ministers will be able to affect the membership of the council and could have direct control of the number of non-lawyers. It is peculiar for a progressive nation to be introducing ­measures you are more likely to find in a developing country where you have complete ­government interference and political bias in all walks of life".

“It is completely regressive and strikes at the heart of what the profession stands for. The cases we take are often ­unpopular and may also be against the government.”

Petitions Committee holds evidence session on 'slum' housing

Scottish Government Housing Minister Alex Neil MSP and Cllr Steven Purcell, the leader of Glasgow City Council, will give evidence to the Public Petitions Committee meeting tomorrow (2 March 2010).

Anne Lear, Director of the Govanhill Housing Association has submitted a petition on behalf of the local community urging the Scottish Government to conduct an inquiry into the responsibilities of private landlords, below-standard social housing and the impact of slum living conditions on the health and well-being of residents. The petition was drafted with help from Govanhill Law Centre.

Committee Convener Frank McAveety MSP said: “Govanhill presents a particular housing challenge and this is a petition on behalf of local residents asking for help from national and local government. The hope is that they will be listened to by the key decision-makers who are gathered round the table.”