Regulating the legal professions

Nicholas Lavender QC, the chairman of the Bar Council, recently criticised the concept of entity-based regulation and suggested it was “simply a fashionable idea amongst regulators”.

The Costs Lawyer Standards Board is currently investigating entity regulation for law costs firms. Entity regulation may well be the solution but I have yet to hear clearly identified the problem which it is meant to solve. In the brave new world, I thought regulation was meant to be evidence based. In the absence of evidence of a meaningful problem, leave well alone.

On the subject of regulation, the LSB, being responsible for overall regulation of the legal professions, has been looking at the cost of legal regulation. Despite being responsible for the issue, they clearly do not know whether, and why, the costs of regulation might be too high. They therefore sent out a survey asking for lawyers to give their feedback. At the conclusion of the survey, the LSB asked whether I would be willing to participate in follow-up research. The LSB, obviously not feeling able to investigate this difficult issue themselves, instructed, at no doubt significant cost, a third party, to undertake this work. I recently received the following email:

“The Legal Service Board (“LSB”) recently conducted an online survey gathering a wide range of views on the cost of regulation for legal services providers in England and Wales. Following that survey, the LSB has commissioned the economic consultancy and research firm ICF Consulting Services (“ICF”) to complete an independent detailed study of the costs of regulation to those providing legal services.

ICF is contacting you because you expressed an interest in participating in this follow-up research when you responded to the LSB online survey. ICF and LSB would be grateful for your cooperation and we hope that you will be able to assist us in this research. We aim for the study to be as representative as possible across the diverse range of legal services providers. Your participation in the study will help to achieve that. We will be distributing a questionnaire on costs in January, followed by a short telephone interview to guide you through these questions in January or early February.

The study is part of a wider programme of LSB work investigating the cost of regulation in legal services and will build on the recent online survey conducted by the LSB. It will add further detail about the cost of regulation and allow more detailed comparisons across the sector and between different types of regulatory cost. In due course this will contribute to practical steps to reduce the cost of regulation.

The full study will be published in June 2015. However, in addition to the information in the study report, ICF will provide each study participant with their own bespoke report outlining how their regulatory costs compare with other study participants’ costs. These will comprise a short report comparing costs with relevant others providing legal services.

Please be assured that any information provided will be treated as confidential by ICF. It has strict confidentiality provisions in its contract with the LSB. Neither the LSB nor your frontline regulator will have access to any data that can be attributed to you or your business. In both the study report and bespoke reports, all cost information other than the participants’ own will be anonymised and aggregated, such that no information is revealed about individually identifiable entities or individual providers. The questionnaire is being undertaken strictly for research purposes and all responses will remain anonymous. ICF will use your contact details for no other purpose beyond this study.

ICF will be running workshops in early January to test the questionnaire and materials that will be used to gather information during this study. We would greatly appreciate volunteers to participate in these workshops. The workshops will help to minimise the demands placed on study participants’ time and refine questionnaire guidance to help participants understand how to complete the questionnaire.

Please contact us to confirm your interest in participating in this study by close Monday 15 December. Please also indicate whether you are willing to participate in a workshop. These will take place in London in early January and would involve no more than half a day of your time testing study materials, so that we can make them as clear and relevant to you as possible.

We thank you in advance for your participation to the study.

Yours Sincerely,
Ben Smithers
Senior Managing Consultant, ICF International”

The consulting agency instructed to establish if and why the costs of legal regulation are too high obviously did not feel qualified to answer the question. They have therefore asked busy lawyers to “volunteer” for a half day workshop to assist in the formulation of questionnaires to send back out to other busy lawyers to complete.

I trust that no stone will go unturned to try to get to the bottom of this issue. Until then it will remain a complete mystery as to what sort of unnecessary work busy lawyers are being asked to undertake that may be contributing to excessive regulatory costs.

Slip of the tongue

Some of the more interesting reading in court judgments comes in the exchanges with the judge that sometimes end up being included in the transcript after the formal judgment has been given. I mentioned the case of Connor v Birmingham City Council the other day and the following extract comes from the transcript to that case:

MR SINGLETON: Your Honour, can I make my usual application at the conclusion of a hearing before your Honour, that my name be amended to Singleton?

JUDGE HAMILTON: I am sorry, have I done it again? I am sorry. I have done it before.

MR SINGLETON: I know exactly how it arises, one becomes convinced in one’s own mind and it sticks there.

JUDGE HAMILTON: Yes, once you have done it. I am sorry, I do apologise though Mr Singleton.

MR SINGLETON: But that aside and onto matters of real moment…

JUDGE HAMILTON: Do you know I thought about it at the time when I was saying it. I thought this is not quite right, but I could not think what was right.

MR SINGLETON: Well, your Honour has avoided a mistake that one of your judicial brethren made which was to refer to me as Mr Simpleton. I wasn’t sure whether it formed part of the judgement or was merely an error.

Relief from sanctions applications

Carrying on with my tidy up, I came across a copy of the judgment of His Honour Judge Hamilton in Connor v Birmingham City Council (16 March 2005).

This concerned a case where a claimant had given notice that a claim was being funded by way of CFA in pre-proceedings correspondence but no notice, as required by the rules, was provided when proceeding were issued. No application for relief from sanctions was made before the detailed assessment and this was only sought orally at the hearing. The District Judge, as first instance, refused relief and disallowed the success fee. His Honour Judge Hamilton dismissed the appeal with the following words:

“It seems to me these are rules to be followed and if a judge decides that they must be followed, no criticism can be made of him for so deciding.”

With hindsight, it seems amazing that there used to be judges with such unenlightened views. However, this was a decision made under the old strict approach to relief from sanctions.

When Lord Justice Jackson undertook his major review he concluded that expecting parties and their solicitors to follow rules and court orders was generating unnecessary extra work for them and this led to disproportionate costs being incurred. Solicitors should be allowed to do what they wanted, when they wanted. A new relief from sanctions rule was required that would encourage a culture of non-compliance.

This approach was warmly endorsed by the senior judiciary in the run-up to implementation of the Jackson reforms with a number of high profile talks being given explaining that nobody likes goody two-shoes solicitors who slavishly follow the rules and court orders and then snitch to the court if their opponent does not do likewise in a cynical attempt to gain a windfall for their client. In future, those asking the courts to enforce the rules could expect to be slapped with adverse costs orders.

The Court of Appeal duly followed this new approach to relief from sanctions in the entirely consistent decisions of Henry, Mitchell and Denton (despite some troublemakers suggesting there might be some mixed signals being given out).

I think I’ve fairly summarised how we’ve got to where we currently are, although I might have become a bit confused over some of the finer details.

Callery v Gray revisited

I’ve been having a bit of a tidy up and came across a copy of the original appeal judgment in Chester County Court in Callery v Gray.

The Callery v Gray litigation was ultimately viewed as a large success for claimants generally and Amelans solicitors in particular, the Claimant’s solicitors in that case. It was therefore interesting to reread the comments of His Honour Judge Edwards:

“In this particular case I note that the District Judge has slashed in half the basic costs figure, and I do not understand that that is being contested. I think, therefore, that in this particular case as to the basic costs figure the claimant’s solicitors must ask themselves whether what they were putting forward was in truth reasonable and proportionate for a case like this.”

Only in the crazy world of costs would this case be notched up as a success for the Claimant’s solicitors.

More Christmas drink recommendations

Christmas is obviously a time for sherry. And I’m not talking about the one bottle of Harveys Bristol Cream that your aunt brings out of the cupboard once a year, pours one glass from and replaces until the next year. (Sherry should be drunk within a few weeks of opening the bottle.)

No, proper sherry is one life’s great pleasures and apparently the “hipster’s tipple of choice” (not that this is any great recommendation on its own).

My top tip for sherry lovers is Sainsburys’ own brand stuff. This is consistently good quality across all types of sherry and just as good as more expensive brands such a Tio Pepe. I particularly recommend a chilled glass of their Pale Dry Fino or Dry Manzanilla. Or, a glass of Medium Dry Amontillado served at room temperature; just the thing to give a warm glow to the heart. All absolute steals at £5.50 a bottle.

Legal Costs Blog 2014 Award for Most Startling Legal Discovery

The Legal Costs Blog 2014 Award for Most Startling Legal Discovery goes to Mr Justice Barling in Long v Value Properties Ltd & Anor [2014] EWHC 2981 (Ch) when giving judgment on the interpretation of the old notification requirements concerning additional liabilities:

“The provisions as they currently stand are obscure, unnecessarily complex, and in need of rationalisation.”

More Christmas drink recommendations

My second drink recommendation in the run up to Christmas is Ayala Brut Majeur NV Champagne. You might not have heard of Ayala but it is now owned by the same people who make Bollinger champagne. Ayala is the “house” champagne at Middle Temple and served at their special events.

Normally priced at £28.99 from Waitrose/Ocado. However, you can pick this up as low as £20.99 a bottle when purchasing a case of 6 from drinksfactory.co.uk. Spend a little bit more to get free delivery (otherwise £5.99 in addition per delivery).

Bubbly.

Interim costs payments

The pre-Jackson CPR contained two provisions concerning the making of orders requiring interim payments prior to detailed assessment. CPR 44.3(8) read:

“Where the court has ordered a party to pay costs, it may order an amount to be paid on account before the costs are assessed.”

The second provision was contained CPR 47.15(1):

“The court may at any time after the receiving party has filed a request for a detailed assessment hearing –

(a) issue an interim costs certificate for such sum as it considers appropriate;

(b) amend or cancel an interim certificate.”

I had always read this to mean there were two stages at which such an order could be made:

1. At the same time an order for costs is being made (usually following a trial).

2. After a request has been filed for a detailed assessment hearing.

Therefore, if an order for a payment on account had not been made when the costs order was being made, the next opportunity to obtain an order for an interim payment would not arise until after a request for a detailed assessment hearing had been made. CPR 44.3(8) did not confer a general power on the court to order an interim payment at any stage. If it did, CPR 47.15(1) would have been redundant.

Interestingly, in the cases of Dyson Ltd v Hoover Ltd [2003] EWHC 624 (Pat) and Blackmore v Cummings & Ors [2009] EWCA Civ 1276 it appears this distinction in timing was not argued and the courts simply proceeded on the basis that CPR 44.3(8) could be used to obtain an interim payment at any stage after an order for costs had been made.

The current wording of the CPR is very similar to before, except there is now a presumption a payment on account will be ordered when costs are awarded. CPR 44.2(8) reads:

“Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.”

 CPR 47.16(1) reads:

“The court may at any time after the receiving party has filed a request for a detailed assessment hearing –

(a) issue an interim costs certificate for such sum as it considers appropriate; or

(b) amend or cancel an interim certificate.”

There is therefore no reason to suppose the issue of timing has changed, assuming my interpretation is correct.

Cook on Costs appears to agree with my views as to timing:

“Where agreement has been reached by acceptance of a Part 36 offer, there is no scope to seek an interim payment of costs until a detailed assessment hearing is requested (via an interim costs certificate). Consequently, these circumstances should prove a powerful incentive for you to get your breakdown or bill drafted and submitted to the other side as soon as possible.”

That has always been my reading of the rules (pre and post-Jackson). I am just not aware of any case law confirming this.

Christmas drink recommendations

Far be it for me to tread on Dominic Regan’s toes when it comes to wine recommendations, but with the approach of Christmas I thought I would make a few drink suggestions for the festive season.

My first is Baron De Ley Reserva Rioja.

This normally retails at £12.49 a bottle from Waitrose/Ocado. However, Costco, of all places, sells this at £57.74 for 6 bottles including delivery (working out at just £9.62 a bottle). The price drops to £9.17 in the unlikely event you are also a Costco cardholder.

The description given is:

“A traditionally styled Rioja, aged for 20 months in mainly new American oak casks, this wine displays a red ruby colour with a medium-high intensity. On the nose, a remarkably powerful blend of fruit, coconut and toffee which evolves into seductive nuances of spices and Mediterranean bush.”

“Mediterranean bush”? I wouldn’t know about any of that but it is jolly tasty. Best decanted before serving and highly recommend with Christmas lunch.