Archive for the 'Legal profession' Category

Plain packaging, conflicts of interest and the Law Society

Smoking GunThe controversy over plain packaging rumbles on and the campaign by the tobacco industry against new packaging laws has stepped up a gear now that the English Government has edged closer to introducing a law like the one proposed by the Irish Government. The industry has always threatened to challenge these laws and it appears likely they will. The last Minister for Health was adamant that the law be introduced. I do not know the attitude of Leo Varadkar, the new Minister for Health, to the Bill.

My specific interest, which I wrote about before, was the involvement of solicitors in opposing the proposed law. The law would, according to the Law Society, be an attack on intellectual property and would damage our international reputation. Both are questionable arguments but the Law Society is not alone in having these views: it is joined by the major tobacco companies, who made submissions to the Oireachtas in almost identical terms.

(As a sidenote, it is striking that most members of the profession who were happy to rubbish concerns raised about the submissions made by the Law Society to the Oireachtas were also very quick to acknowledge their lack of expertise in intellectual property law. I did not notice many intellectual property law practitioners publicly defending the submissions.)

While I am of the opinion that the plain packaging issue is not one of any significant importance to the legal profession or the Law Society, my main concern is that the submission document disclosed no relevant interests on the part of the Law Society Intellectual Property Law Committee that drafted them. In fact, it didn’t name the authors or the Committee members.

I had a number of communications with the President of the Law Society about the issue and he ultimately wrote to me, characterising my comments as amounting to a view that a member of the IP committee of the Law Society had engaged in “highly improper conduct of acting in a conflict of interest situation”. I made no such allegation.

On a preliminary, technical, note: the committee members were not, to my knowledge, “acting” for anyone when they were formulating their submissions. A solicitor’s involvement with a Law Society committee is an unpaid role and is not carried out on behalf of specific clients. It is a means by which the solicitor with expert knowledge shares that knowledge to benefit the Society and others.

My view is that where the Law Society and its committees engage in lobbying relevant interests should be disclosed, as should be the case when anyone engages in lobbying. In this particular instance, I would expect that a submission by the IP Committee would disclose in the document itself who its members are and what members act for tobacco companies, the Health Service Executive, the Irish Cancer Society or any other interested party.

Expecting the disclosure of interests is not a revolutionary idea: it should be the bare minimum standard the Law Society holds itself to.

By interpreting my concerns as he did, the President decided that he was of the view that I was, in fact, making “a serious complaint about the conduct of a solicitor.” Not correct: I was making a complaint about the apparent lack of procedures in Law Society committees when lobbying on proposed legislation. Plain packaging was a current example but the issue is much larger.

But by deciding that my concerns were a misconduct complaint the President could then conclude that it would be improper for him to become involved and instead deflect my comments to the Registrar of Solicitors. The President was telling me to make a regulatory complaint against another solicitor. I had no intention of doing so and I had not alleged a breach of conduct, the Solicitors Acts or anything of that nature.

The situation therefore appears to be that the Law Society, as an organisation of its members, is not willing to consider observations from those members about conflicts of interest policies for committees. Instead, issues which arise should be raised as misconduct complaints (which are, obviously, very serious). It is a bizarre attitude to take which muddies the waters between two separate spheres of the profession: client work and the activities of a representative professional organisation.

The Law Society has countered criticism of the plain packaging debacle by insisting that it is not a “front” for the tobacco industry. The President wrote that such ideas were “conspiracy theories” which were “without foundation”. I had not, however, suggested a conspiracy of tobacco companies and their solicitors.  That is not the issue: basic principles of transparency are what members of the Society, and the wider public affected by its actions, should require.

Solicitors represent the interests of their clients, whatever the activities of their clients may be. That is their job. But it is difficult to see why solicitors advocating a particular view on the law, under the banner of the entire profession, cannot include a footnote to disclose whether or not they might act for people or organisations with a direct interest in the outcome. Should the Society not hold itself to that standard?

Criminal Law Practitioners Union in the works

People often gripe about the free legal aid system but, to my mind, it’s part of the price we pay for the Republic and its Constitution, which

seek[s] to promote the common good, with due observance of Prudence, Justice and Charity, so that the dignity and freedom of the individual may be assured [and] true social order attained.

Some people don’t like that the system exists at all. Others dislike the cost. A small number of lawyers make a lot of money from the legal aid budget, but they tend to work exclusively in criminal defence. And they work hard: criminal defence is far less profitable than many other areas of law, including areas that consume far greater amounts of taxpayer funding.

An email has been circulated among criminal defence lawyers proposing a Criminal Law Practitioners Union (CLPU) to lobby and negotiate with the Government on the system of criminal free legal aid. The email says that, when the next round of cuts are implemented, the fees paid for criminal legal aid will have been cut by up to 50% of their 2007 level.

Cuts of this magnitude will put a large number of [criminal legal aid lawyers] out of practice and seriously undermine the fair and proper administration of justice in criminal law. Cuts of this magnitude are unfair and unjust and impose a greater burden on us than on any other ‘public service sector’.

Two points are involved here: the public interest argument and the private interest argument. The latter doesn’t interest me and will not find much sympathy with the public. But this issue is not about incomes: lawyers are also professionals who want to represent their clients’ interests, not just in court but before they reach it.

For example: it has long been the practice of the Department of Justice to pay defence counsel the same fee as the prosecution. Equality of arms is an important principle, but the Department recently abolished it for criminal trials and imposed a 10% cut on fees paid to defence counsel (ie. 10% less than what is paid to prosecution counsel by the Director of Public Prosecutions). [Edit: I agree with this letter-writer to the Irish Times. Cuts should be equal.]

Quite obviously the only reason that we are very much the ‘poor relations’ in the courts system is because our clients are voiceless and so are we. (My emphasis)

The email points to an interesting comparison which contextualises the legal aid budget: the legal aid budget is around €57 million annually, whereas the annual bill for legal fees for a single State agency, the HSE, is around €30 million. Up to May 2011, Arthur Cox had earned over €11 million advising the Government on the banking crisis alone.

The email seeks support for the CLPU to negotiate terms and conditions of a contract with the Department of Justice for legally aided criminal defence. I would expect that the CLPU will run into competition law issues but the email states that nothing will be done to distort competition.

The email suggests a picket on the courts as a final measure to protest further cuts. This will inevitably be the focus of headlines and the move would be reported by the media as a strike to protect the income of lawyers, rather than a strike to protect the interests of justice. A serious public interest issue is at stake and is unlikely to receive the quality of discussion and debate regularly achieved in the UK.

(As I finalised this blog post, this article published on the Evening Herald website. The headline provides a taste of the tone of coverage to come.)

The timeframe for action is tight, and apparently over 100 lawyers have already indicated an intention to join the CLPU (around 30 of whom are solicitors).

In the meantime, it remains unclear what has become of the last government’s mad proposal to move responsibility for the criminal legal aid system to the Legal Aid Board. However, Brendan Howlin’s Ideas Campaign-style search for solutions has apparently generated the suggestion that inexperienced law graduates “be deployed” to the legal aid system.

For how long will your local District Court be in your district area, or local?

Newcastle West District Court

Today, the Limerick Leader reports on informal discussions between the Courts Service and the Gardaí about moving sittings of the Newcastle West District Court to Kilmallock, about 36 kilometres away. Kilmallock has benefitted from huge investment in recent years, whereas Newcastle West District Court remains antiquated and with few facilities. However, it is still a functioning Court building.

It goes without saying that moving District Court sittings to Kilmallock would have a significant impact on business in the town. The effect would be felt not only (not even most severely) by solicitors, who already travel around the region to represent clients at various hearings. It would, however, force a further downturn on the restaurants, cafes, pubs and shops in the town that get a considerable lift to their business when the court sits.

For those not familiar with Newcastle West, it’s an old market town in West Limerick. It’s the biggest town in the County and familiar to many travelling to Kerry as the main road passes through.

The town has its origins in a castle (the old castle) erected by the Knights Templars in 1184 and since then it has played an important role in West Limerick. Part of that role has been the administration of justice. Samuel Lewis’ Topographical Dictionary of Ireland (1837) notes the important market and court sessions in the town:

Courts leet and baron are held by the seneschal of the manor, and petty sessions for the district are held every Friday.

Over the centuries, as with any market town, court and market days brought significant life and business to the town. The market days are mostly a thing of the past, but Newcastle West District Court still sits regularly and incorporates the old sittings of the Adare, Rathkeale and Askeaton courts.

Aside from monetary concerns, moving the court would have a psychological impact, stripping the town of an important official function. The town would be somewhat diminished as a result. And while 36 kilometres might not seem a tremendous distance, there is no direct means of public transport from the Newcastle West area to Kilmallock.

PS. Incidentally, last year the High Court rejected a challenge taken by solicitors in the New Ross area against the temporary relocation of that town’s court sittings to Ardcavan. The challenge was on public interest grounds and on the basis that the move threatened the applicant’s right to earn a living. The case is interesting because it related to temporary arrangements in the case of an “urgent need” or where the courthouse involved becomes “unsafe or otherwise unusable”. This is not the case with Newcastle West District Court.

What?!

The slow and painful collapse of the SMDF continues to surprise, if not delight. Today, a letter from the Chairman of the SMDF raises more questions than it answers. Three sentences jump off the page:

We embarked on a strategic review during 2010, with the assistance of significant outside expertise. It was recommended that we provide indemnity in 2010/11 and then sell our book of business.

When the London insurance market became aware, earlier this year, of the possibility of a Master Policy being introduced for Irish solicitors, any interest in the [SMDF]‘s book evaporated.

What the letter diplomatically omits is the identity of the party who made the London insurance market aware of the possibility of a master policy being introduced. It was, of course, the Law Society.

The result? The Law Society now proposes to impose a €200 annual levy on all solicitors, not just members of the SMDF, for at least 10 years. (The SMDF letter raises the prospect of a 15 year bailout.)

The Law Society and the SMDF have already been criticised for seeking a bailout from Society members rather than SMDF members. But, it now transpires, the SMDF found a solution to its problems which might not have involved calling on all solicitors to bail it out.

The Law Society went public with its (still!) undeveloped idea of a master policy, depriving the SMDF of the opportunity to sell its book. The Law Society will now impose a new solution, at significant cost to its own members.

I might not be the only recipient of this letter to have exclaimed: “What?!”

InjuriesBoard.ie: “lawyer-free zone”, or competitor?

Officially, the Personal Injuries Assessment Board (the “Board”) is just another boring statutory body performing a function on behalf of the State. However, the Board has often exceeded that mandate since its creation by acting as a vocal critic of the legal profession. Arguably,the Board also operates as a commercial entity in competition with lawyers, albeit a very strange form of competition where the aim is to deprive lawyers of fees rather than to earn those fees for itself.

I mentioned recently that a wide range of restrictions apply to advertising by solicitors, despite the fact that the Board advertises in a manner not dissimilar to the personal injury solicitors familiar to viewers of UK television. (An example of the latter is below; I have been unable to find InjuriesBoard.ie ads online.)

Indeed, after a few years of operating under its official name, the Board began to style itself InjuriesBoard.ie, a form of branding very much in line with what one might expect from an online claims agency.

An online claims agency like Claims.ie, perhaps? In 2010, InjuriesBoard.ie made a complaint to the Advertising Standards Authority of Ireland under its self-regulatory code on the basis that users might believe Claims.ie was the website of the Board. It also complained that it was not clear who was running Claims.ie or from where. The complaint was upheld, though Claims.ie did not respond to it. The ASAI referred the case to the National Consumer Agency, presumably with a view to enforcement action under the Consumer Protection Act 2007.

Part of the Board’s complaint related to Google adwords, which really is a matter for the courts (in fact, it is very much a live issue for the courts). The Board was correct in stating that it is unclear who is behind Claims.ie, but contact details are provided. The site appears to be run by a company called Claims Ireland Limited but there is no company registered in Ireland with that name (there are two registered business names for “Claims Ireland”). So, the operator may have some difficulties under the Companies Acts or related legislation, which is a matter for the Companies Registration Office and the Director of Corporate Enforcement. Nevertheless, the Board was the organisation to take up the complaint and its choice of forum was the relatively powerless ASAI.

When making a complaint to the ASAI, the complainant must indicate if there is a commercial or other interest in making the complaint. For consumers, the answer will be no. A practical difference in treatment is that a consumer complaint is confidential, whereas the ASAI publishes the name of corporate complainants. The ASAI does not generally entertain complaints between competitors but may do so if a consumer interest is at stake.

What was the Board’s interest: commercial or consumer? The Board’s own website says that individuals may engage an agent to conduct a claim on their behalf. (Why anyone other than a solicitor would take on that role, given the regulatory and liability consequences, is unknown.) If the Board’s complaint was not a case of staking its commercial territory, and instead was acting in the interest of consumers, why does it otherwise go to such great lengths to discourage consumers from engaging independent professionals, the identity and reputations of which are well known?

Aftershock: legal profession

I’ve been blogging about the legal profession’s own private economic crisis since January 2010 but haven’t had time lately to write any updates. Luckily, Flor McCarthy has an excellent blog post on the recent developments. He accurately sums up the frustration felt by many solicitors on the issue:

So for as long as the music kept playing [the SMDF, "run by solicitors for solicitors"] was a great system for all participants. Those paying the premiums felt that they would be looked after by their own in the event of a claim and the lucrative negligence defence work that flowed from this activity was passed out to well connected firms.

But then the music stopped and it turns out the SMDF is the fat kid without a chair. It’s broke. And now it’s looking for the rest of the professional to bail it out.

Effectively, to draw an analogy with the problems affecting the Irish economy over the past few years, the crisis with the SMDF has moved from bank guarantee territory to recapitalisation territory. Solicitors are now faced with a levy of €200 per solicitor per year for at least 10 years in order to avoid a doomsday scenario whereby a large number of negligence claims would not be covered by insurance. This could result in a significant number of bankruptcies on the part of solicitors and unpaid damages on the part of clients.

SMDF

The justification for the levy is that the reputation of the profession would be damaged if this were allowed to happen. There is also the internal justification of “standing by” fellow colleagues who might otherwise go to the wall. For many solicitors, it has come as quite a surprise to learn that the SMDF wasn’t really providing insurance at all, just a form of quasi-insurance by which cover might be available. Hard to swallow for solicitors who have paid tens of thousands annually for that cover.

The latest news is that an EGM was held last night. It was initially called for the purpose of voting on the levy proposal but a spot of solicitor activism meant that a postal vote of the entire profession must now be held. The proposal will probably be carried, despite grumbles.

Once the SMDF is out of the way, the profession faces a proposal from the Law Society to impose a weird “global policy” where all solicitors will be offered cover at set rates and will not be able to arrange their own cover (or get competing quotes). This system is, in general terms, good for firms who have difficulty getting insurance and bad for firms that don’t. Apparently there will be consultation but the timeframe is narrow. The Law Society’s track record on providing information on these issues has not been great (even where the Government is concerned).

Between the changes expected from the Government as part of the IMF/ECB deal and whatever insurance changes are made by the Law Society, the profession will remain in flux for the forseeable future.

Ceci n’est pas une publicité

There are a number of forms of State-funded legal aid in Ireland but, in summary, they will be of no use to you unless charged with a reasonably serious crime or involved in family law proceedings. The Legal Aid Board is not provided with anything close to the resources needed to actually provide a system of civil legal aid. The Free Legal Advice Centres (which are not part of the State-funded legal aid system) pointed out in a 2005 report on access to justice that:

[T]he Legal Aid Board employs 89 solicitors to deliver the entire civil legal aid scheme in 30 Law Centres throughout Ireland. This is less than the number employed in some large legal firms in Dublin. Small wonder then that waiting lists for civil legal aid in many centres have been extremely lengthy, leaving people without any legal assistance for as long as two years in some locations.

It is almost unheard of for legal aid to be obtained to initiate a civil, non-family law case. In addition, many people who would not qualify for legal aid would still find it prohibitively expensive to fund many cases (particularly those relating to serious personal injury or medical negligence). Conditional fee arrangements, commonly known as no foal/no fee, fill the void. Despite this fact, cases which usually involve such arrangements are often characterised as being somehow of questionable merit or a feature of ambulance chasing.

It is, presumably, fear of the profession being tarnished by such characterisation that led the Law Society to severely restrict how solicitors can advertise their services. I wrote about this topic before, mentioning that solicitors can’t advertise the fact that cases might be taken on a conditional fee basis. John McCarthy recently highlighted the ludicrous nature of the advertising restriction.

… I as a solicitor cannot take out an ad offering my services to you on a no win, no fee basis. It does not mean that I cannot provide services to you on this basis, because that is exactly what I do for clients every day. It does not mean that we cannot have a discussion about it, such as what we are doing here. It’s a pretty silly regulation when you think about it.

Such advertising is considered so serious that to engage in it is a matter of professional misconduct and can result in such a finding by the Solicitors’ Disciplinary Tribunal. Despite this, the Citizens Information Board tells citizens that many solicitors do take cases on a no foal/no fee basis. The Board, a statutory authority, essentially does what solicitors are prohibited from doing.

Fee arrangements are currently the subject of debate in the UK, where reform proposals are under consideration that could seriously impact on access to justice. Ironically, the current UK system of allowing success fees to be recovered from the losing side was designed to avoid footing a legal aid bill for personal injury claims: the same motivation explains why the Irish Citizens Information Board tells people that many solicitors work on a no foal/no fee basis.

Andrew Dismore suggests on the Guardian website that the UK reforms might only reduce legal costs by scaring potential claimants off.

They are playing on claimants’ worst fears: the threat of uncertain and unlimited legal bills. If the government wanted to reduce legal costs fairly, they should start by giving insurance companies incentives to accept liability and make sensible offers earlier, not by making it harder for the public to enforce their rights to get justice.

Lest people dismiss the access to justice argument on the basis that no foal/no fee arises only in relation to inflated claims arising out of minor soft-tissues injuries, Dismore gives a particularly good example of the type of injustice that could result from the reforms.

Martyn and Christine Harrison’s daughter Sophie was appallingly injured in a road accident in April 2009. She died two days later, when Martyn and Christine made the hardest decision anyone could make by agreeing that her life support machines should be switched off … The Harrisons borrowed the funeral expenses from Sophie’s grandparents because they couldn’t afford them. Their predicament became worse when they sought legal advice. They had problems finding a lawyer because Sophie had been 18 years and one month old when she died. Because she was over 18, her parents were not entitled to bereavement damages. No one wanted to help until they found a solicitor in Sittingbourne, who took their case on a conditional (“no- win-no-fee”) basis to try to reclaim the funeral costs and compensation for Sophie’s pain and suffering for the two days she survived after the accident. As a result of his efforts, Martyn and Christine recovered the funeral costs of £3,151 and £1,599 for Sophie’s pain and suffering.

Dismore’s charge that the UK Government’s proposals are unfair because they favour insurance companies have some resonance here. Solicitors have long complained that the Personal Injuries Assessment Board (now styling itself InjuriesBoard.ie, with television ads in recent years reminiscent of those seen in the UK on the part of claims agencies) is a creation of the insurance industry which favours that industry over citizens.

McGarr Solicitors wrote, before the election, that the new government should abolish PIAB on the grounds that it is unfair to injured parties. Unfortunately, as I regularly complain, the views of solicitors are routinely discounted on the basis that solicitors are a vested interest concerned only with securing huge fees and rarely with justice. It is essentially with that argument that the insurance industry convinced the Irish government to create a system of claim handling that attempted to remove solicitors from the equation and provide the industry with extra options when defending claims. The Board appears to see solicitors as providing an entirely unnecessary, luxury service and go to great lengths to give the impression that solicitors have no role in personal injury claims. Note their FAQs:

you may choose to engage an agent (e.g. a solicitor) who will submit the application on your behalf. You may, however, be liable for some or all of the cost in respect of engaging the agent.

John McCarthy outlines the reality.

The way the insurance industry works is that if you have suffered a genuine loss you have to bring a claim to recover it. However, it pays the insurance industry to drive down the cost of claims by portraying the very act of bringing a claim in an unfavourable light.

The average claimant who has suffered an injury will hope that his/her claim is a one-off and will enter the system with little or no experience of it. Their opposing party, an insurance company, defends claims on a daily basis and has teams of claims handlers and solicitors managing claims. Of course, many solicitors make some of their profits from personal injury claims. But the argument for involving solicitors in such claims is not about increasing profits, rather it is about equality of arms.

Endnote: here’s some great lawyer advertising from the US. But: is it appropriate? It would certainly raise a few questions under the Irish regulations.



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