Media Coverage: News

Most law firms remain confident about the future

2 September 2008

Most law firms remain confident about the future despite the current economic climate, according to research by Key Business Finance, the professions finance branch of the Heritable Bank.

Their survey found that 65% of firms are optimistic about their prospects. A surprising 85% of firms with between three and ten partners expected their fee income to stay the same or increase over the next six months. Only 15% expect it to decrease.

In spite of the confidence, however, firms are not as optimistic as they were six months ago. At that time, 82% said they were confident or fairly confident. That figure has now fallen to 65%.

Most regional law firms have no plans to reduce their spending. Two thirds are planning to spend roughly the same over the next six months and just over a quarter are planning to spend more.

That confidence seems to apply across the board to include spending on marketing, IT, office improvements and staffing.

Nearly nine out ten firms surveyed have an overdraft. One in ten hope to reduce their overdraft over the coming year but most planned to keep it at much the same level. Only 8% plan to reduce the overdraft.

Nick Sanders, the managing director of Key Business Finance, said: "The regional law firm market appears very optimistic for the future. We have though, started to see the effects of the credit crunch and the various threats to the market, such as the Legal Services Act and the legal aid reforms, starting to bite.

“The results showed most firms were confident, but looking at the results, the majority don't expect next year to be a growth year. At Key Business Finance, we have already seen an increase in applications for funding from the legal profession this year as firms move to protect their cashflow."

Juror turned detective stops manslaughter trial

21 August 2008

A judge had to stop a manslaughter trial after discovering that one of the jurors had been carrying out his own investigations into the case and discussing his findings with other members of the jury.

The case was being heard at Newcastle Crown Court and involved an 18-year-old student accused of causing the death of a 72-year-old taxi driver. The taxi driver suffered a heart attack during a struggle over an unpaid fare.

As the trial was coming to an end, Judge David Hodson was presented with a list of 37 questions about the case from the jury. It turned out that the questions arose out of investigations into the case by one of the jurors, a middle-aged man who had visited the scene of the incident. He had taken photographs and measurements and had even used the internet to research forensic science techniques.

The man said he carried out the investigations because he wanted to get a feel of the case and ensure that the jury reached the right verdict. He discussed his findings with fellow jurors which meant they had been given information about the case that had not been presented in court, either by the prosecution or the defence.

Judge Hodson immediately stopped the trial and discharged the jury.

However, the unusual circumstances did not affect the outcome of the trial. When the case returned to court, the judge ruled that there was insufficient evidence to prove the charges and the accused should be found not guilty. He said the taxi driver had a serious heart condition which could have proved fatal at any time. It could not be proved that the struggle with the student was the direct cause of death.

Judge Hodson said that had the trial continued in the usual way, he would still have directed the jury to return not guilty verdicts. He ordered that there should be no retrial.

Solicitors could ‘lower their insurance costs’

18 August 2008

The Law Society says firms which fail to implement its practice management standard, Lexcel, could be missing a chance to reduce the cost of their professional indemnity insurance (PII).

It quotes a study by the Independent Commissioner in 2005 which revealed that 69.1% of Lexcel accredited firms had seen lower insurance premiums since gaining Lexcel accreditation.

Society president Paul Marsh said: 'Implementing the Lexcel framework across a practice can help a firm manage itself more effectively, which gives them the potential to lower PII premiums. Not only does the profession recognise Lexcel as a standard of excellence, it seems many insurers value its worth as well. Firms without Lexcel accreditation might, therefore, be missing a trick.

“Anything which improves a firm's risk profile may be looked upon more favourably by insurers. Lexcel might be a factor in helping maintain current or potentially reducing future premium levels for solicitors.”

Andrew Nickels, Risk Manager at Zurich Professional, said: “Zurich recognises that Lexcel includes excellent requirements and recommendations for systems and procedures which, if complied with consistently and conscientiously throughout the practice, can help significantly to reduce exposure to complaints and claims and in turn have a beneficial effect on indemnity premiums.”

HIPs questionnaire ‘designed to help
non-solicitor providers’

14 August 2008

Government plans to expand Home Information Packs (HIPs) to include a questionnaire outlining more details about the property have been criticised by Law Society president Paul Marsh as a crude attempt to help “non-solicitor” providers.

A consultation process is now under way on proposals to include a Property Information Questionnaire (PIQ) covering things like building work carried out at the property, information on energy and utilities, details of parking arrangements and council tax banding. It’s intended that this will help reduce problems coming to light that delay or even prevent transactions from going ahead.

There are also plans to improve the information given about leasehold properties. This would include details about the cost and use of leasehold property and a copy of the lease.

The issue that has angered many lawyers is that the Department for Communities and Local Government says the questionnaires can be completed without professional assistance.

Law Society president Paul Marsh told the Law Gazette: “The consultation is a crude attempt by the government to help out non-solicitor HIP providers who are struggling because of the drop in the property market. They are trying to make the packs fuller so people can justify the cost.”

Mr Marsh said the questionnaires were an unnecessary addition but if they do become part of HIPs then people should not fill them out without legal advice.

The consultation is due to end on 30th September. If the Government recommendations are accepted, the questionnaires could become part of HIPs from 1st January 2009.

Crown courts could get powers to strike off solicitors in fraud cases

12 August 2008

The Attorney General Baroness Scotland says crown courts should be given disciplinary powers over solicitors charged with fraud.

Those powers should include the right to remove solicitors from the roll – even if they are acquitted.

The proposals have been put forward in a consultation paper which if adopted would give crown court judges the power to remove solicitors from the roll for 15 years. Baroness Scotland believes the new approach is needed to prevent fraudulent solicitors repeating the same offences.

Action could be taken against a solicitor if a court believed, in line with the civil standard of proof, that he was unfit to practise.

The Solicitors Regulation Authority said it welcomed initiatives to tackle fraud and would give the proposals careful consideration.

Lord Justice Mummery says too many neighbour disputes are reaching courts

6 August 2008

Lord Justice Mummery says there are “too many calamitous neighbour disputes” in the courts and has urged people to consider using specialist mediators as a way of settling differences.

His comments came as he gave judgment in the case of Bradford v James [2008] EWCA Civ 837 which involved a dispute between two neighbours over the ownership of a small cobbled area in front of a barn.

The barn had originally been part of a farm. The farm and the barn were sold separately in the 1970s and the plans were not conclusive as to whether the cobbled area had been allocated to the owners of the barn or whether it remained as part of the farm.

Halifax County Court ruled in favour of the owners of the farm but that decision was then overturned by the Court of Appeal.

However, in giving his ruling Lord Justice Mummery questioned the value of pursuing court action in cases like these which could lead to great acrimony and large legal bills.

At the beginning of his ruling he said: “There are too many calamitous neighbour disputes in the courts. Greater use should be made of the services of local mediators, who have specialist legal and surveying skills and are experienced in alternative dispute resolution.

“An attempt at mediation should be made right at the beginning of the dispute and certainly well before things turn nasty and become expensive. By the time neighbours get to court it is often too late for court-based ADR and mediation schemes to have much impact.

“Litigation hardens attitudes. Costs become an additional aggravating issue. Almost by its own momentum the case that cried out for compromise moves onwards and upwards to a conclusion that is disastrous for one of the parties, possibly for both.”

High demand for LPAs puts pressure on the Office of the Public Guardian

4 August 2008

The annual report of the Office of the Public Guardian (OPG) says that in the last 12 months, three times as many people applied to register powers of attorney as did in previous years.

The report says the increase is due to the Mental Capacity Act 2005 which introduced Lasting Powers of Attorney as a replacement for Enduring Powers of Attorney.

The sudden increase in demand has put pressure on the OPG. Its Chief Executive, Martin John, said: “The introduction of the Mental Capacity Act has resulted in a high volume of applications to register powers of attorney, a sign that people are increasingly thinking about and planning for their futures.

“Due to the unexpected and considerable demands on our services, we are continually improving our processes and deploying our staff to help manage the workload. We expect to see a return to our published standards over the summer period. We will continue to work closely with customers and stakeholders to make sure that we can deliver the service they expect.”

Other key findings of the report include:

the number of applications to the Court of Protection for a finance or health and welfare decision have significantly exceeded expectations
nearly three times more investigations into the actions of deputies and attorneys compared to last year
more than 50 applications made to the Court of Protection by the
Public Guardian in cases where there are concerns about a deputy or attorney

New road accident claims procedures fail to satisfy lawyers or insurers

1 August 2008

The Government announcement on new streamlined procedures for claims resulting from road accidents have been criticised by both personal injury lawyers and insurers.

The procedures will provide for early notification of claims valued between £1,000 and £10,000. They will promote early admissions of liability and early settlements. They also introduce fixed time periods and fixed recoverable costs.

There will be no change to the small claims limits, including those for personal injury. The fast track limit will be increased to £25,000.

Bridget Prentice MP, Minister for Civil Justice, said: “This new process encourages people to come to a quick settlement and to resolve any issues without a lengthy court process.

“The Government remains of the view that increasing the small claims limits would deny claimants access to appropriate legal advice to assist them with their claims. But increasing the fast track limit will provide greater flexibility for the courts to manage cases in the most efficient way.”

However, the Association of British Insurers said the proposals failed to grasp the need for radical reform. The ABI Director General Stephen Haddrill said: Many claimants will remain stuck in a slow, complex and expensive system, that denies them speedy compensation and care.

“Even the motor reforms do not go far enough, and will only have a small impact on the 10% of motor insurance premiums that are swallowed up in legal costs. And the exclusion of workplace-related claims, which take on average three years to settle, is illogical and bizarre.

The Association of Personal Injury Lawyers were also critical. A spokesperson said: “There is no mention of rehabilitation of the claimant, in the Government response. Rehabilitation is a crucial element for all personal injury claims.

“Also lacking is provision for an early interim payment, which is currently being piloted
in the multi track code initiative.

“The government states it believes a fixed recoverable costs scheme will bring
certainty and predictability to the new claims process but the experience of APIL’s
5,000 members shows the current scheme of predictable costs has not prevented
insurers from disputing costs, which generates satellite litigation and delay. Promised
reviews, essential to any fixed costs scheme, have also not been forthcoming, once
again generating more uncertainty.

“While the Government has decided to leave employer and public liability cases out of
its new scheme, a £10,000 limit means that more complex RTA cases could be
included within an inappropriate and inadequate system.

“The stated increase to the fast track limit does not currently allow complex claims to
move into the multi track and we would like to see such provisions included in the
new rule or practice direction. We are concerned that this increased limit will result in
many cases being allocated to the fast track when they are complex and more suited
to the multi track procedure. It is APIL’s view that complexity and not just the value of
a claim should be considered.”

Keir Starmer QC to be new DPP

31 July 2008

Keir Starmer QC has been appointed as the new Head of the Crown Prosecution Service and Director of Public Prosecutions.

He is currently Joint Head of Chambers and Head of the Criminal Team at Doughty Street Chambers. He will take up his new post in November.

The Attorney General, the Rt Hon Baroness Scotland QC, said: “Keir brings with him a breadth of experience in human rights, international law, police and criminal law. He has a real understanding of the importance of independent prosecution and a wealth of knowledge across all aspects of the law. I believe he has the ability, knowledge and vision to take the Crown Prosecution Service into the future.

"Keir has practised as a highly respected member of the independent bar with great distinction. He has previously prosecuted for the Crown and advised the CPS, and has also acted against the government on various issues. That is in the nature of his present role as an independent barrister. I value the skills and independence he will bring to his role."

Who are the top earning solicitors?

28 July 2008

The Sunday Times has published a list of the highest paid solicitors in the UK.

It points to a profession becoming increasingly polarised with thousands of legal-aid lawyers struggling to cope as legal reforms affect their fees while those at the top go from strength to strength.

The paper lists the top 50 earners. Here are just a few of them in no particular order.

Nigel Boardman is described as Slaughter and May’s star dealmaker which accounts for his earnings of £2.3m. He’s credited with having fought off Sir Philip Green’s £9bn bid to buy Marks & Spencer and for having negotiated the financing for Arsenal’s new Emirates stadium.

Alan Paul of Alan and Overy earns £1.6m after helping his firm to the top of the dealmaking table in 2007. He has four children, all of whom he says are too sensible to want to become lawyers.

Adam Signy specialises in private equity and M&A at Clifford Chance for which he is rewarded with a package worth £1.3m. He says he is well paid by most people’s standards but his salary is nothing outstanding by City standards.

There aren’t many women on the list. Frances Murphy, head of corporate at Slaughter and May is one of the exceptions. She earns £2.3m

David Cheyne is listed as earning £1.8m. He is the senior partner at Linklaters where he heads a team of 2,500 lawyers.

New chairman of Legal Services Commission appointed

24 July 2008

Sir Bill Callaghan has been appointed as the new Chair of the Legal Services Commission.

He was previously Chair of the Health and Safety Commission and has had several key roles within the TUC including heading up the economic and social affairs department.

His career highlights are listed as “raising the profile of health and safety through a high level representational role in the media, with employers and trade unions, and with Ministers; and strengthening the Commission's strategic role”.

He takes up the post on 1st September and will work part time with an expected commitment of 60 days a year at a salary of £54,000.

No win, no fee comes under review

22 July 2008

The Ministry of Justice has commissioned a review of no win, no fee arrangements in England and Wales.

The study will be carried out by senior academics and will examine whether the arrangements still operate in the best interests of the public.

Justice Minister Bridget Prentice said: “No win, no fee arrangements are vital in helping to give the public a voice in courts. However, we are aware of growing concerns that they may not always be operating in the interests of access to justice.

“We feel that now is the appropriate time for a comprehensive, objective and evidence based examination of the operation of no win, no fee arrangements in relation to personal injury, employment and defamation cases.”

A statement from the Ministry of Justice says the review will consider how best to:

identify representative samples of claims data in personal injury, employment and defamation/privacy cases
examine the nature of funding arrangements in these cases and the outcome
identify random samples of clients and legal advisers that may help provide more detailed data about the understanding of quality and change within the legal services sector
analyse the unmet legal needs in the areas of personal injury, employment and defamation/privacy.

The review will be led by Professor Richard Moorhead, Deputy Head of Cardiff Law School. He is due to report to ministers in the autumn.

Witness anonymity – emergency bill passes through parliament

17 July 2008

The Criminal Evidence (Witness Anonymity) Bill has completed its passage through both Houses of Parliament only two weeks after first being introduced.

The Bill was rushed through after a ruling by the House of Lords in June that legislation was needed if a trial judge’s power to grant witnesses anonymity in certain cases was continue. The ruling led to the collapse of a murder trial which will now have to retried next year.

The new Bill clarifies the circumstances in which a witness anonymity order can be granted and ensures that a person convicted on the basis of anonymous evidence cannot have their conviction quashed solely on the grounds that such anonymity was granted.

The Justice Secretary Jack Straw thanked MPs from all parties for their support in rushing the Bill through. It will now be put forward for Royal Assent.

New Public Guardian promises to improve processing of LPAs

14 July 2008

Martin John has taken up his post as the new Public Guardian and has promised to tackle the problem of delays in the processing of Lasting Powers of Attorney.

Mr John, who succeeds Richard Brook, had previously been working in the business development section of the new Tribunals Service.

He said: 'I am delighted to be appointed as Public Guardian and Chief Executive of the Office of the Public Guardian. Over the coming weeks my priority is to work with staff and stakeholders to ensure customers receive the right services at the right time.

“The Office faces some key challenges in dealing with the processing of Lasting Powers of Attorney and extra resources have been brought in to tackle the delays and we are already seeing improvements.

“Over the longer term, I will be reviewing how well the Office and the Mental Capacity Act are working overall and we will be engaging closely with customers and stakeholders on this.”

Should pleural plaques victims receive compensation?

10 July 2008

The Government has launched a consultation on what its response should be to the Law Lords ruling last year that pleural plaques are not actionable or compensatable.

The consultation paper asks “whether changing the law of negligence would or would not be appropriate and seeks views on the merits of offering no fault financial support to people diagnosed with pleural plaques, and on possible ways of doing this”.

Justice Minister Bridget Prentice MP said: “The Law Lords have made their decision on legal grounds but those with pleural plaques may still need support. We need to find the best way forward to provide that support.

“The government is committed to consulting on a way forward and welcome views on how people who have been exposed to asbestos, and developed pleural plaques, might be helped.”
The closing date for put forward views to the Ministry of Justice is 1st October, 2008.

OFT approves estate agents redress scheme

8 July 2008

A redress scheme is being set up to allow consumers to refer complaints about estate agents to an ombudsman.

The Office of Fair Trading (OFT) has already given approval to the Ombudsman for Estate Agents Company Ltd to set up a redress scheme under the Consumer Estate Agents and Redress Act 2007. Two other applications to run estate agent redress schemes are also being considered.

An OFT statement said: “Once it becomes compulsory for all estate agents to join an approved scheme, buyers and sellers of residential property will be able to refer complaints concerning members of the scheme to an ombudsman to be determined.

“The ombudsman will have the power to make a range of awards, including requiring a member to pay compensation. The ombudsman's decision is binding on the estate agent, although a complainant can choose to reject the decision and pursue their complaint through the courts.

“The OEA's approved redress scheme will be a free service to complainants.”

It’s expected that all estate agents will be required to join an approved redress scheme by 1st October this year.

Linklaters reports 15% rise in profits

7 July 2008

Linklaters has announced a substantial rise in turnover and profits for the year ending 30th April 2008.

Its revenues increased by 15.3% to £1.293bn and its pre-tax profit rose by 15.1% to £564m. Average profit per equity partner rose by 11.3% to £1.44m. Linklaters Managing Partner, Simon Davies, said: “Inevitably, we saw a decline in major deal activity in the second half of the financial year. However, demand for specialist and complex multi-national advice remained strong, and healthy growth in Asia, Emerging Europe, the Middle East and the US helped us to maintain a robust performance over the year as a whole.

“There are major challenges ahead. We will draw on our strength and depth across practices, sectors and regions to face these and to deliver the best support possible to our clients.”

The results were mirrored by impressive performances by the City’s other three largest firms Clifford Chance, Freshfields Bruckhaus Deringer and Allen & Overy. They all reported revenues of more than £1bn.

Barrister jailed for £17.5m VAT fraud

4 July 2008

A barrister has been jailed for five years for attempting to make a fraudulent VAT repayment claim for £17.5m.

Southwark Crown Court was told that John Wilmot claimed to specialise in shipping, aviation insurance and international tax laws. His fraudulent claim related to a bogus £100m aircraft engine deal.

HM Revenue and Customs began an investigation after discovering discrepancies on Wilmot’s VAT return. He was able to provide paperwork for sales and shipping but was unable to produce any bank accounts relating to payment for the engines.

Wilmott, who lived and practised at an office in Temple Chambers, Temple Avenue in London, claimed he was not knowingly involved in the attempted fraud but was found guilty and sentenced to five years imprisonment. Wimot is a Nigerian national and was recommended for deportation after completing his sentence. He was also disqualified as a company director for eight years.

Solicitors complain about BBC “distortion”

2 July 2008

The Criminal Law Solicitors Association is complaining to the BBC about the way lawyers are portrayed in a TV programme, according to a report in the Solicitors Journal.

The director of the CLSA, Rodney Warren, told the Journal that the series, Criminal Justice, was an “appalling distortion” of the criminal justice system.

The first episode of the series featured a cynical duty solicitor who is shown giving advice to a murder suspect at a police station. He tells the suspect that “winning is everything” and that he should “forget the truth”. He then advises that the suspect should reply with a “no comment” to all police questions.

Mr Warren told the Journal: “We have all got a right to be worried about what is happening here. There is a responsibility on the BBC to ensure some accuracy.

“Gross distortions like this do nothing to increase public confidence in the system, and in a way are more damaging than press stories about miscarriages of justice.”

The BBC said the series was a fictional portrayal written by Peter Moffat, based on his experiences during his time as a practising barrister. A spokesman said: “This is in no way a factual documentary. It is a drama.”

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