Long arm of the bar

Regulation is flavour of the month at the moment. With Sir David Clementi about to issue his consultation paper on the topic, the press has been keen to point out differences of approach to his review of regulation between the Law Society and the bar.

The bar is sometimes portrayed as being stuffy, old-fashioned and out of touch on the future structure of the profession and its regulation. But the facts tell a different story.

First, we need to be clear what we are talking about in terms of regulation. There are particular activities, which, because of their importance to the client or to the public interest generally, need to be undertaken by trained and competent people who are subject to a particular set of rules. Then there is the issue of compliance with those rules and how they are enforced.

Here, it is worth pointing out that relatively few activities can be done by practising barristers or solicitors alone. There is a competitive market for legal services provision. Many insurance companies and other bodies can and do provide legal advice using non-practising lawyers, paralegals or laypeople. Those advisers are not regulated by the professional bodies and the quality of advice will doubtless vary.

Using a practising solicitor or barrister means that the client can rely on a level of up-to-date expertise and also on adherence to particular rules of conduct designed to protect the client.

These rules have been developed by the courts and provide a practical way of dealing with the tensions that exist between the public interest, the proper administration of justice and the interests of the client.

Incidentally, the rules also provide the protection of guaranteed levels of indemnity insurance in the case of solicitors, compensation in the event of dishonesty and disciplinary mechanisms.

But the problem with multidisciplinary partnerships (MDPs) and ‘Tesco law’ (organisations owned by non-lawyers delivering legal services to the public) will arise in reconciling duties owed by accountants to, for example, the Inland Revenue, or by companies to their shareholders, with those of lawyers to their clients and the courts.

We have seen no real proposals for squaring this circle. What is the position of the lawyer employed by an MDP where one partner has a duty to disclose something to the Inland Revenue and another has a duty not to do so?

How is a client of RAC Legal Services, whose dispute is supported by RAC insurance, protected from the RAC lawyer trying to find ways of avoiding the policy?

How is a professional body to regulate and support lawyers who are employed by such bodies where they have no real control over the resources that they are allocated and when they may be under all kinds of pressure from their employers?

And Tesco law may sound beguiling, but it would open the door to ‘Robert Maxwell Legal’ and ‘IRA law’.

These questions need answers fast, otherwise there is a real danger that clients will suffer similar losses to those of Equitable Life or to the shareholders in Enron, Parmalat and WorldCom.

Big is not necessarily either efficient or beautiful and it is much more difficult and expensive to regulate.

All this points further to the value of an independent corps of expert sole practitioners that can provide independent advice to any litigant and which is not dependent on the demands of shareholders or other partners.

The bar provides competition and a real diversity and source of cost-effective expertise in the market. It plays to its strengths and limits what it does accordingly. It avoids the transactional work of solicitors: it does not handle money. It can afford a lean, inexpensive regulatory system that maintains a satisfaction rate from the ombudsman of around 90 per cent.

It is a system that those who are part of it constantly seek to improve, and the bar has embarked on a three-year programme to make sure that it remains among the best in the field and commands confidence. It sees complaints handling as a crucial part of its work – and it generally does it well.

MDPs and Tesco law may prove to be costly luxuries. They may need expensive solutions when things go wrong. It would be tragic for clients, and for choice in the profession, if the bar is dragged along with these and made to fit into a heavy-handed system that it neither needs nor deserves.

Stephen Irwin QC is chairman of the bar of England and Wales