Too many loopholes spoil the rules
27 September 1999
3 October 2013
27 August 2014
24 December 2013
12 February 2014
4 April 2014
Marlene Winfield of the National Consumer Council gives her reaction to the Law Society's new practice rule. Marlene Winfield is the National Consumer Council's senior policy officer for legal services.
On 3 September, the Law Society unveiled its new practice rule on client care. It was three years in the making. Launching it, the president said: "The new rule will give more certainty for all and, importantly, help to reduce the number of complaints going to the Office for the Supervision of Solicitors (OSS)." Is he right?
The National Consumer Council (NCC) was hopeful when the revision began. It made perfect sense to strengthen the cost rule when more than half of all complaints to the OSS involved disputed costs. The forces of light within the council saw what was needed - a rule that left as little as possible to the discretion of the solicitor. The forces of darkness disagreed.
The draft that came to the NCC was a big disappointment. The bones of a good costs rule were there. The code required solicitors to give clear information, pitched at the appropriate level for the particular client. If they could not give the information required, they should tell the client why. Oral information had to be confirmed in writing at the earliest time and clients would be able to set upper limits on expenditure. They would be given warning of "reasonably foreseeable" payments and costs information would be updated by prior arrangement. The cost v benefit of the action would also be discussed.
But the forces of darkness had left their fingerprints all over the new rule, turning it into the sort of contract a solicitor would never advise a client to sign. Though we pointed out the flaws in client protection back in 1997, the Law Society chose to ignore us. They are serious flaws indeed.
Compliance with the code is not compulsory. Solicitors choosing not to comply need not record their reasons in writing, although this would be "good practice". Nor do they need to agree them with the client. However, the paternalism only appears to operate when it suits the solicitor. When deciding what parts of the code to comply with, solicitors are required to "consider the interests of each client" but not, apparently, to act in their clients' best interests. Lest readers think the loopholes are a figment of NCC's imagination, I will cite another view.
In April 1999, responding to a letter from a council member concerned about the amount of discretion the rule allowed, the then president replied: "My understanding is that paragraph 4(d) is written in terms which do not elevate the requirement of explaining to clients that they may set an upper limit on the costs to an absolute duty."
Weak though the new rule is, the current president still thought it necessary to reassure the profession. His launch press release said comfortingly: "Most solicitors will not have to do anything to implement the new system." Sadly, this is probably true. The new rule gives delinquent solicitors plenty of room to wriggle. It still leaves clients without clear rights or ideas of what to expect. Given the current crisis at the OSS, and the resulting threat to self-regulation, what can the Law Society be thinking?
Surely if complaints are to be prevented, a client care rule should make it mandatory for solicitors to give the required information to clients, or agree in writing with the client why it cannot be given.
In exceptional circumstances, when solicitors judge that neither course is feasible, they should be obliged to record the reasons in writing and risk sanctions if the reasons are deemed not to be good enough. That way, clients would know their rights and solicitors would be clear about what is expected of them. Eventually paternalism would give way to partnership.
Sadly, a precious opportunity to tackle at source a major cause of complaints has been squandered, surprisingly with the Lord Chancellor's approval, albeit before the magnitude of the complaints crisis was known. Some enlightened thinking needs to happen fast and the Lord Chancellor should encourage it. Practice Rule 15 needs to be rewritten, by a rules committee with several lay members and more input from the Ombudsman. If a new dawn does not break soon, the only sound at Chancery Lane will be the door of the Last Chance Saloon swinging shut.