Tuesday, 30 March 2010

Justice for Scotland coalition launched

A coalition of Scottish solicitors including Thompsons Solicitors, the Glasgow Bar Association, Govan Law Centre and others, have come together under the principle of 'Justice for Scotland' to reject 'Tesco Law' and call for better legal services for Scotland's citizens and communities.

Solicitor Advocate and Senior Partner at Thompsons, Frank Maguire said:
"We need to refocus our legal services on Scotland’s communities and citizens. They deserve better. We need to send a message to the Scottish Government to think again. We must reform our Law Society as it has shown itself incapable of representing all of those trying to render a legal service in Scotland now and in the future".

"We must seek to re-affirm, through any such reform, the principles crucial to the administration of justice. We must also ensure that the legal service is preserved and improved across the whole range of needs of the Scottish people and their communities. Scottish solicitors can join us to begin to make this happen and ensure you vote NO; NO by noon, 7 April 2010".

The coalition's campaign website is here: Justice for Scotland, and all Scottish solicitors are invited to join, add their voice, and ensure that they vote, 'NO; NO' by noon, 7 April 2010.

Monday, 29 March 2010

‘Tesco law’ open to abuse by gangsters

The Herald reports that plans to allow Scottish law firms to use outside investors would increase the risk of money-laundering and allow drug barons to expand their empires, according to one of the country’s most senior lawyers.

Frank Maguire, senior partner at Thompsons Solicitors, one of the Glasgow’s largest firms, fears the so-called “Tesco law” will undermine his profession’s integrity and independence by allowing firms to be able to raise capital from outside investors, while banks and supermarkets could offer a full range of legal services.

The proposed changes, contained in a Bill currently going through the Scottish Parliament, have divided Scotland’s 10,500 solicitors, and the arguments are becoming increasingly heated. Mr Maguire believes that by allowing non-lawyers to open legal services will be a blessing only for organised crime as it would be impossible to monitor whether those running the new firms had criminal records.

Mr Maguire told The Herald: "If you had a legal firm, or someone wanted to set up a legal services-provider, that could in future be done by a drug baron who could use it as a legitimate front to launder money. If we opened up legal services then sophisticated organised criminal networks would be able to run them or put their own people in place".

"The financial memorandum says there is £1,300 to monitor whether those opening new firms have criminal records. Even £100,000 would not cover it. It means putting in jeopardy the independence and integrity of the legal profession. Those working in such businesses would not even have to be lawyers under the Bill. They could be legal service-providers with just one lawyer".

Saturday, 27 March 2010

Complaint to Electoral Reform Society

GLC has lodged a complaint with the Electoral Reform Society (ERS) in relation to the wording of the two questions in the forthcoming Law Society of Scotland referendum on ABS or 'Tesco Law'. The letter to the ERS is reproduced below.

Mr Andrew Burns
The Chairman
The Electoral Reform Society
6 Chancel Street

Dear Mr Burns

Law Society of Scotland (LSS) referendum on ‘Alternative Business Structures’ – internet-based voting system operated by the Electoral Reform Society (ERS) on behalf of the LSS

I am a Scottish solicitor, and a member of the Law Society of Scotland. I note that my Law Society has instructed the ERS to undertake an electronic referendum of all solicitors in Scotland on two questions concerning the proposed introduction of ‘Alternative Business Structures’ to Scotland.

I am aware of the first class reputation of the ERS and am therefore puzzled as to why you would put your good name and reputation to a referendum whereby the questions posed are biased, conditional and heavily weighted in favour of one particular outcome, namely ABS? This is the favoured policy of the governing body of the LSS, notwithstanding that it is now clearly opposed by many within the Scottish legal profession. For example, the first question posed is thus:

"Do you support in principle the introduction of Alternative Business Structures ("ABSs") to Scotland as long as there are appropriate safeguards to protect the core values of the legal profession and there is an equivalence of regulation between ABSs and traditional firms?"

This question predetermines the answer by making a value judgement that there will be ‘appropriate safeguards’ to protect the independence of solicitors' legal services to the public. But that is the very issue which is being debated amongst solicitors in Scotland. Separately, the question as framed is tautological (‘a statement that is true of necessity or by its logical form’).

Can you please advise whether the ERS had any involvement in the framing of the referendum questions? Can you please advise whether it is you policy as a UK body which promotes fair and democratic elections to take part in a voting procedure which is patently undemocratic by reason of the use of ‘loaded’ or ‘leading questions’?

Finally, can you please advise on your formal complaints process (and please treat this letter as a formal complaint) as I am concerned that the LSS will use the good reputation of the ERS to give credibility and respect to its flawed referendum on this occasion.

Yours faithfully

Mike Dailly
Principal Solicitor

Thursday, 25 March 2010

Democracy shamed and silenced

More than 3,200 Scottish solicitors were disenfranchised and silenced today when the President of the Law Society of Scotland, Ian Smart, used a technicality to deny them a vote on whether to embrace or reject ‘Tesco Law’ (Alternative Business Structures or ‘ABS’).

Despite Mr Smart having previously challenged opponents of Tesco Law to ‘bring it on’, he faced a humiliating defeat today which he, Council members, and a small number of multi-millionaire big firm partners refused to face for fear of certain defeat.

Approximately, 2,300 solicitors had granted proxy votes against Tesco Law, with only around 921 in favour of the Law Society’s position. As the prospect of defeat presented itself to the Law Society’s minority elite they tried desperately to nobble the democratic will of the majority opposition.

They called for a comfort break, and asked opponents if they would agree to a restriction on external ownership whereby ABS providers would be required to have a majority of solicitors. The opposition agreed to enter into dialogue after the SGM but refused to compromise their motion, and pressed for a vote.

Facing certain defeat, Scotland’s Law Society President called for the meeting to be adjourned and seized upon a technical rule whereby only those present in the room could vote, resulting in over 3,000 proxy member votes being discounted. The net result was that 70 members of the profession – including around 50 Council members and a handful of multi-millionaires – voted to disenfranchise the democratic will of over 3,200 members.

GLC’s Principal Solicitor raised two points of order at the meeting. The first noted that given over 3,200 members had cast their vote by proxy, it would be undemocratic to deny them a voice in the future of our profession, and that the spirit of the debate required their voice to be heard and respected. This concern was rejected by Vice President, Jamie Millar of Brodies Solicitors, who chaired the SGM.

Secondly, Mike called for a vote of 'no confidence' in the Society’s President, Ian Smart, who had presided over the most undemocratic period in the Law Society of Scotland’s history, and by denying 3,200 members a voice in this debate had brought the legal profession into disrepute. This call was rejected by Mr Millar as incompetent.

GLC’s Principal Solicitor said:
“This is a dark day for Scotland’s legal profession. Democracy has been shamed, denied and abused by a small elite of 70 members, against the clear will and voice of of 2,300 members who had voted against Tesco Law. The Council of our Society has lost all credibility today. You can deny a democratic vote by filibuster or technicality, but the only loser is the reputation of our profession which now lies in tatters after this affront to democracy”.

A report on proceedings at the SGM is in The Times (Friday, 26 March 2010) here, and in The Scotsman here.

Wednesday, 24 March 2010

Law Society rigs referendum question

As Scottish solicitors cast their votes in the 'Tesco Law' referendum (whether to embrace or reject the external ownership of law firms by non-solicitors) the Law Society has chosen to use a ‘loaded’ question, heavily weighted in its favour.

The referendum question chosen by the Society predetermines the answer by making a value judgement that there will be ‘appropriate safeguards’ to protect the independence of solicitors' legal services to the public. But that is the very issue which is hotly contested in the Legal Services (Scotland) Bill. Also, the question as framed is tautological (‘a statement that is true of necessity or by its logical form’). The question asked is:

"Do you support in principle the introduction of Alternative Business Structures ("ABSs") to Scotland as long as there are appropriate safeguards to protect the core values of the legal profession and there is an equivalence of regulation between ABSs and traditional firms?"

Govan Law Centre’s Principal Solicitor, Mike Dailly, said:

"At the heart of the Tesco Law debate is the concern there would be inappropriate safeguards to prevent solicitors being influenced by a vested corporate agenda to the detriment of the public. For the Law Society to phrase its question to assume there would be safeguards is nothing more than a shameless attempt to procure a yes vote."

"The international and UK established practice in referenda is for questions to be framed as neutral, simple and unconditional, and for both sides of the argument to have a fair and level playing field when it comes to campaigning. That hasn’t happened as the Society has deployed all its staff and resources to campaign for a Tesco Law 'yes' vote. But now the referendum itself has been rigged by a loaded question".

"The Law Society’s President Ian Smart should hang his head in shame. The question should be reset in neutral terms, and Mr Smart should resign forthwith for presiding over the most unfair and undemocratic process in the history of the Law Society of Scotland".

GLC suggests the question should be framed in simple, neutral and unbiased terms:

Question: Do you support the introduction of Alternative Business Structures to Scotland?"




Saturday, 20 March 2010

A fair and level playing field?

When a Government Minister fights an election, he or she does not do so on Government time, with paid civil servants producing campaign materials. Likewise, if the Scottish Government were to hold a referendum on independence, they would campaign not as Ministers, but as members of their political party. They would not be permitted to use civil servants to produce campaign materials or use their Office to run a campaign. Such referenda are subject to campaign rules.

For example, in 'Scotland's Future' the Scottish Government explain why their proposed referendum would need to be subject to campaign rules: "it is essential that rules are in place to ensure that the campaigns are run in a demonstrably fair and open manner ... The aim is to create a level playing field for those involved in campaigning; no organisation should have an unfair advantage over another. In particular, a single wealthy organisation should not be able to influence the campaign disproportionately".

But incredibly there are no such campaign rules for Law Society of Scotland referenda. Which explains why the President, Council members, and the Chief Executive Officer can help themselves to resources - paid for by the members - such as staff time, organisational facilities, confidential databases, and Law Society financial resources to run their own campaign in favour of 'Tesco Law', and the Legal Services (Scotland) Bill.

Does that give them 'an unfair advantage'? You betcha. Have they been prepared to offer the same resources to Scottish solicitors who have concerns over aspects of the Legal Services (Scotland) Bill? No, because they want to win at all costs. It's their game, their rules, and if you don't like it, it's their ball too. This is a very sad indictment on Law Society President, Ian Smart, who is ultimately responsible for this undemocratic process.

GLC's Principal Solicitor's call for Mr Smart to resign is reported in today's The Scotsman here, and concerns over the lack of fairness in next week's SGM is reported in today's The Herald here.

Friday, 19 March 2010

Scottish Government's concession on section 92 welcomed

GLC welcomes reports (Scotsman, 19 March 2010)that the Scottish Government has agreed to delete parts of section 92 of the Legal Services (Scotland) Bill, which would have given the Scottish Government the power to set the proportion and number of non-solicitor members on the Council of the Law Society of Scotland, and the criteria for such appointments.

Fergus Ewing's intervention is positive, yet it still leaves the irreconcilable problem that non-solicitors cannot 'represent' the interests of solicitors. GLC supports non-solicitor membership of the regulatory aspects of the legal profession, but on the proportions as applicable in England and Wales. The Bill should be amended to exclude non-solicitor membership of the Council of the Law Society.

Fergus Ewing has said that the 'without the Bill, Scottish law firms may be less able than their competitors to take advantage of the opportunities arising in areas of law not reserved to Scottish solicitors.” That is hardly an endorsement for the Tesco Law provisions of the Bill which extend far beyond reserved law matters, and include all devolved Scots law issues. If the Bill reflected the Scottish Government's own position, the ABS sections of the Bill would be restricted to corporate law issues.

Thursday, 18 March 2010

Go, and go quickly

Call for the President of the Law Society of Scotland to resign, from GLC's Principal Solicitor.

Referenda are a powerful means to provide certainty on important issues. But the democratic authority of any vote depends upon whether it has been conducted fairly and transparently.

The UK Parliament recognised this in enacting the Political Parties, Elections and Referendums Act 2000. Part VII of that Act ensures that any UK referendum is conducted fairly, with both sides of an issue having equivalent financial resources, and equal routes of access to influence the plebiscite with their literature or voting message.

The current Scottish debate on Alternative Business Structures or ‘Tesco Law’ is subject to two forthcoming votes: a Special General Meeting on 25 March, and a referendum thereafter. The body responsible for conducting these votes is the Law Society of Scotland.

The Law Society of Scotland is the Returning Officer, charged with operating and conducting the ballot of its members, and counting the votes cast at the SGM and referendum on Tesco Law. The electorate are 10,500 Scottish solicitors, who are members of the Law Society of Scotland.

Yet, have you ever heard of a Returning Officer deploying all of their financial resources and staff to influence a vote? Actually, not just influencing a vote, but aggressively and overtly campaigning for a particular outcome in that vote?

No? Well, incredibly this is what the Law Society of Scotland is doing. It even has a Scottish Government Minister speaking on its platform today to tell us why we must support the Law Society’s and the Scottish Government’s desire to allow external ownership of Scots legal firms by financial institutions and other non-solicitor bodies.

Now, I have no problem with Ian Smart travelling around Scotland to preach the false virtues of Tesco Law to Scottish solicitors. That’s his personal right as a solicitor, but not as President of the body which is conducting the poll of its members on this issue. On his own time and expense only.

Likewise, why is Lorna Jack, the chief executive of our Society, travelling around Scotland to encourage solicitors to vote for Tesco Law? Ms Jack is a paid official, she is not a Scottish solicitor. She has no vote. Why should she use her official position to influence the outcome of a democratic vote?

The Law Society’s view on Tesco Law is what its members tell it; not what the President, Council, or the chief executive think. Otherwise, what’s the point of holding of a democratic plebiscite?

Likewise, I have no problem with Janet Hood promulgating the benefits of Tesco Law to in-house solicitors. But not as Chairman of the Law Society of Scotland’s In-House Lawyers Group, using the Law Society’s resources and confidential membership data to influence the vote of members. Data which is not available to those solicitors who disagree with Tesco Law.

The Law Society of Scotland is presiding over a polling exercise whereby it is also the chief campaigner and PR agent for ‘Tesco Law’. It’s the judge, jury and executioner of the independence of our profession.

Our Office Bearers and officials should be neutral in this debate: they should permit their members to advocate for, or against, Tesco Law. They have failed to do so. Worst still, they have taken it upon themselves to dictate to members how they should vote. This democratic deficit can only be described as Mugabesque. It’s thoroughly unfair and brings our profession into serious disrepute here at home, and internationally.

When I was on a recent Human Rights mission in West Central Africa, the British High Commissioner explained to me how certain vested interests paid for votes by slapping a 5000 CFA note on a voter’s forehead. Such undemocratic practices were utterly deplorable and repugnant, but how different are they to some people who should be impartial using their positions as Office Bearers and officers to sway the vote on the future of Scotland’s legal profession?

Scotland’s solicitors have been placed in a deplorable position. Cometh the hour, cometh the man or woman. Leadership is vital in critical moments. I sincerely believe that our President has sold the purse; he has failed to provide leadership; he has failed to promote and safeguard the interests of our profession. He has been responsible for an undemocratic and unfair voting process. I believe that our President, Ian Smart should go, and go quickly.

Tuesday, 16 March 2010

Prickly Paw

GLC's Principal Solicitor's note on the Law Society's CEO's position of separating the regulatory and representative functions of the Law Society of Scotland.

Lorna Jack’s reference to the Monkey’s Paw tale is apt. It’s a short horror story where each wish results in an unexpected gruesome outcome. In truth, our Law Society has been wishing on that Monkey’s Paw for the last couple of years: the Legal Services (Scotland) Bill is the consequence.

If the Law Society had truly represented the interests of our profession, and the interests of the Scottish public, it would not have embraced an unrepresentative, flawed, consumer lobby supposition, which proceeded upon the notion that access to justice was a consumer service. Consumerism is based upon choice, and choice is driven by wealth. Justice is based upon constitutional right. Fairness, not wealth.

All people are equal before the law regardless of wealth; in a consumerist world, equality and justice are commodities to be purchased. The moment you see legal services as any other commodity, you end up in the consumer lobby’s Casino, where the house always wins and cash gets you a better service. What then flows is Tesco law, the erosion of what makes a profession a profession, and the commodification of justice itself.

Organisations like Consumer Focus Scotland do not represent the majority of people in Scotland who lack the wealth to purchase ‘consumer choices’. CFS see life through the spectacles of a small, affluent, well educated, cohort. They have a disproportionately large influence on policy in this nation, and its time for Scotland’s communities to be represented by the people who live and work in those communities, and not an unelected consumer elite.

Sadly, we are where we are. Unlike, Lorna Jack, I would suggest the most logical and cost efficient way forward would be to incorporate the Scottish Legal Complaints Commission into a new slimmed down Law Society of Scotland which was purely a statutory regulator, comprised of a mixture of solicitors and members of the public: ‘the Scottish Solicitors Regulator’. That would streamline cost. There is no need for a committee of 60 to regulate 10,500 solicitors. The representative side of the Law Society’s function could be left to existing professional associations and the new networks which would arise.

The Law Society of Scotland has opened Pandora’s box. It’s time for Scotland’s solicitors to close it in the forthcoming referenda.

Thursday, 11 March 2010

Rebuff by filibuster

GLC's Principal Solicitor's response to the Law Society's refusal to add the "dual function" question on the ballot of Scottish solicitors later this month.

In the brilliant 1939 Frank Capra movie ‘Mr Smith goes to Washington’ Jimmy Stewart holds up proceedings in the US Senate by filibustering. The filibuster is a dilatory motion to prevent something happening, which often employs an arsenal of objections and obfuscation. While Senator Smith was standing up for democracy, sadly, President Smart is filibustering to deny Scottish solicitors their say on the threat to the independence of our profession in the referendum commencing 22 March onwards.

In the interests of transparency, I have reproduced (below) the formal response from the Law Society’s Chief Executive last night, to yesterday’s requisition for a referendum question on: “Should the Law Society of Scotland as statutory regulator continue to be responsible for promotion of the interests of, and the representation of, solicitors in Scotland?”. Regrettably, our President, Vice-President and Chief Executive propose to kick this question into the long grass. The reasons for this decision can only be described as filibustering.

The Society have said they must ‘formally’ know what is meant by ‘promotion’ and ‘representation’ in order to ‘discuss’ the requisition. Yet Article 24 of the Constitution clearly mandates Council to hold a referendum on a question if at least 50 solicitors make a requisition. The only discussion is timing. The absurdity of the Society’s position is further exposed when one considers that ‘promote’ is the terminology used in section 1 of the Solicitors (Scotland) Act 1980, while ‘represent’ is the expression used by the Society itself.

Another reason given for not treating the future of our profession as urgent is because it might be a bit pricey in expense claims for Council members to meet next week? Astonishing. It might be helpful for a full disclosure of all expense claims so we ascertain why we are too poor to convene an extra meeting.

Finally, we are told that the position on ABS (Tesco Law) needs to be ascertained before we can consider changes to the structure of our regulatory and representative body. Lorna Jack says this is because the independent representation issue is subsidiary to the ABS issue. Yet, in today’s statement from Ian Smart, Ian quite rightly concedes that the two issues are ‘distinct’ and separate.

In truth, there is no cogent reason why the ‘dual function’ question cannot be added to the ballot paper. Justice delayed is justice denied. Likewise, filibustering over the democratic and constitutional rights of solicitors is wrong.

"Dear John


I confirm receipt of your letter together with the 65 signed notices requesting a referendum in terms of Article 24 of the Constitution of the Law Society of Scotland and your request under Standing Order 7(1)(a) asking me to request that the President call a special meeting of the Council. Ian Smart, President; Jamie Millar, Vice-President and I have agreed that your requisition will be discussed at the scheduled Council Meeting on Thursday 25th March. Council will then make arrangements to hold the referendum thereafter.

The President asks that prior to the papers being issued to Council for this meeting that, on behalf of the signatories to this requisition, you formally advise him of what is meant by "promotion" and "representation" as contained within your proposed question and the kinds of activities that you see falling within those terms. These explanations would assist the Council's discussion on the 25th March.

For the avoidance of doubt, the Council's proposed referendum is not in connection with the provisions of the Legal Services Bill. It will ask whether ABS has the continued support of the Profession. It directly responds to the issues raised regarding legitimacy of the 2008 vote which established the Society's policy and allows one member one vote in a secret ballot as you and others have suggested should be done. This issue needs clarification before any subsidiary issue, which arises as a result of s92 of the Bill, is dealt with, not least because some in the Scottish Law Agents Society believe that the referendum result may lead to a change in Government policy and the Bill as currently drafted. Partly in consequence of that, we have undertaken to them that the Society's referendum result will be known before the Stage 1 debate on the Bill, likely to take place in mid April. We do not therefore wish to delay the Society's Referendum which we have this week instructed ERS to deliver.

Cost must obviously however also be a consideration. The referendum planned will cost less than 40p per member. The cost of running a second referendum in the same way has been balanced against the cost associated with attempting to secure an additional meeting of Council before 25th March.

For information, our understanding, is that the Society has held referenda before, once in the 1980s in relation to the setting of advertising rules and once in the 1990's in relation to a levy which was raised to carry out an advertising campaign.

Kind regards

Lorna Jack"


Wednesday, 10 March 2010

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".


Tuesday, 9 March 2010

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.

Monday, 8 March 2010

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.

Friday, 5 March 2010

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.

Thursday, 4 March 2010

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.”

Monday, 1 March 2010

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.”