Commercial & Chancery: Chancery gains

Despite the normal doom-mongering, the chancery bar is responding well to modern challenges, says Michael Todd QC

“Litigation has dried up.” “Solicitors’ rights of audience erode the work of the bar.” “Reductions in public funding threaten the future of the bar.”

For almost 30 years such statements have been regularly made of the impending decline of the bar. But I certainly have not noticed any signs of such decline at the chancery bar.

The effect of the challenges to the future of the criminal bar, and to those other parts of the bar that are largely dependent on public funding, are only too obvious. Fortunately for us at the chancery bar, little of our work is dependent on public funding. While we do some publicly funded work, such as directors’ disqualification applications, winding-up petitions and judicial review applications, it forms a small proportion of our practices.

The perceived challenges to the chancery bar are different. They stem from rights of audience for solicitor advocates, encroachment by solicitors on the trial work undertaken by junior counsel, a reduction in the amount of litigation and, in particular, of trial work. Additionally, as solicitors’ firms expand, so do their greater resources and expertise, meaning that more work is handled in-house.

Complementary skills
While there is an increasing overlap, the work of solicitors and barristers is largely complementary. We have skills that solicitors do not have, and vice versa. The bar enjoys a degree of independence from clients that solicitors do not. The ability of solicitors to refer clients, without fear of competition, to a barrister for an objective and independent opinion has been to the benefit of all concerned.

Certainly, the size of law firms, with their enormous resources, has not adversely affected the chancery bar; in fact, it has been quite the opposite. The globalisation of law firms has led to more work for the chancery bar, as those firms attract new work from abroad. Advisory work, both domestic and international, is growing, all the more so with the influx of the US firms into the market.

During my time at the bar, solicitors have always had rights of audience in chambers or in private applications. Rarely are they exercised. In arbitrations, solicitors have always had rights of audience. So there is nothing new there. In High Court applications, how many of our opponents are solicitor advocates? Very few, in fact.

There is undoubtedly encroachment on our litigation work and, in particular, on that of the junior bar. An increasing amount of trial preparation is being done in-house by solicitors. But the challenge to the chancery bar does not come from increased competition. If it were to come at all, it would come from unfair competition if solicitors were to recommend to clients, or insist on using in-house services rather than junior or leading counsel, irrespective of cost to the client or of the expertise of the service provider. Hopefully, such instances would be rare, if they were to occur at all.

Quality as standard
But why should we complain about these changes? If we provide the best service, we will get the work. If solicitors provide a better service, we have little cause for complaint.

Geoffrey Vos QC, chairman of the Bar Association, describes the pursuit of excellence as the defining feature of the bar. He talks of the need to demonstrate the quality of service the bar provides. I agree with him. Excellence and quality always have been, and will continue to be, bywords for the chancery bar.

The chancery bar operates daily in a market economy and with each piece of work undertaken we are judged on performance. We have faced up to the challenges and have adapted. And it is on this basis that we have thrived and the volume of work has expanded.

Chancery work is now as much concerned with the use of trusts in many forms of structured products for pooled investment and credit, as with family settlements; with secured commercial lending as with domestic mortgages; with limited partnerships as investment vehicles as with vehicles for small traders.

The 2007-08 business plan of the Royal Courts of Justice (RCJ) Group, published in March this year by HM Courts Service, reports that, as with the commercial courts, the chancery division attracts high-profile, complex and increasingly international disputes, and that it has a workload of some 4,000 claims a year, in addition to the workload of the Bankcontinued #+ continuedruptcy Court and the Companies Court.

The Companies Court deals with some 12,000 cases each year. A substantial proportion of those cases involve complex reorganisations (both solvent and insolvent), takeover schemes, insurance and banking business transfer schemes, as well as applications in administrations, receiverships and liquidations. And with those applications comes a wealth of advisory work.

The silent partner
Perhaps one of the greatest challenges facing the chancery bar going forward is one of lack of awareness; of the breadth of the work we do; of the working practices of modern chancery practitioners; and of the wealth of chancery work outside London.

This lack of awareness is not confined to clients; it is also prevalent among many solicitors firms, most notably among foreign law firms, academics and among those contemplating a career at the bar. In a sense, the chancery bar has been its own worst enemy; not in the quality of work it does, not in its attitude to change, nor in its working practices, but in not promoting awareness. It has always got on with its work competently and effectively, but quietly.

So perhaps it is no surprise that some people talk of the new Rolls Building as the new Commercial or Business Court. The Commercial Court will be moving there, as will the Technology and Construction Court. But so too will the Chancery Division, which, according to the 2007-08 RCJ business plan, does three times more work than the Commercial Court and the Technology and Construction Court together.

The future
The Chancery Bar Association (ChBA) is determined to confront this issue of lack of awareness. It has a busy agenda. It is seeking to improve links with the chancery bar outside London. Much chancery work is undertaken by the bar in the regions, and many solicitors prefer to use the chancery courts in their local districts than have the matters heard in London. There is much work we can do with the bar in the regions to our mutual benefit. The ChBA is also building upon the many existing links it has with the bar and law firms internationally.

We recognise that to maintain, if not improve, our market position, there is much that can be done. We are seeking to improve our academic links and are exploring the feasibility of an ‘academic membership’ of the association. We have a sub-committee looking at diversity issues. Both of those initiatives will assist in identifying and recruiting the best people from the widest possible pool.

The chancery bar is stronger now than it has ever been. It has faced up to the challenges presented to it and has adapted. There is an appreciation of the lack of awareness that exists. A task for the ChBA, in the immediate future, is to assist the chancery bar in addressing this issue.

Michael Todd QC is chairman of the Chancery Bar Association