LEGAL PROFESSION BILL REFERENCE GROUP FIRST MEETING 8 OCTOBER 2008 DEFINITION OF REGULATED LEGAL SERVICES
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1 LEGAL PROFESSION BILL REFERENCE GROUP FIRST MEETING 8 OCTOBER 2008 DEFINITION OF REGULATED LEGAL SERVICES Aim The Group is asked to consider options for defining regulated legal services provided by alternative business structures (ABS) in Scotland, with a view to arriving at an agreed recommendation for the consultation. 1. In this paper we first consider how the Solicitor s (Scotland) Act 1980 and the Faculty s rules define activities reserved to solicitors and what they are otherwise entitled to do, and what advocates can do. We then consider alternative definitions in which currently exist in ABS legislation in England and Wales and Australia. Scotland 2. The characteristics of the legal services markets in Scotland were explored in Chapter 3 of the 200 Report by the Research Working Group on the Legal Services Market in Scotland According to the Report 2, a solicitor or advocate may provide their services in the all of the following areas of law: employment, personal injury, financial services\tax, immigration, criminal law, residential conveyancing, commercial conveyancing, commercial, family, welfare/debt/housing and consumer law. However, apart from commercial conveyancing, these markets are not exclusive to them as in-house solicitors, non-lawyer specialists and non-specialists may also practise in specific areas. What services does a solicitor provide? 4. The Solicitors (Scotland) Act 1980 (the 1980 Act) provides for the solicitor s right to practise, professional practice, conduct and discipline, and complaints and disciplinary proceedings relating to solicitors in Scotland. However there appears to be no statutory list setting out what solicitors are entitled to do, though activities reserved to qualified solicitors are, see para below. 5. The Thinking about becoming a Solicitor 3 leaflet describes the range of legal services which can be provided by a solicitor: 1 2 Table showing characteristics of legal services markets in Scotland, page
2 The easiest description of a solicitor s work is that he/she solves legal problems and then gives the client the answer. A solicitor in private practice can be described as a general practitioner in law. However, as law has become more complex, specialisation has become more prevalent. A solicitor s work may fall broadly into one or perhaps a number of the following categories: Advising Private Clients covering the whole range of personal and business life and including such matters as marital problems, consumer complaints, disputes with neighbours, planning enquiries and many more matters. Commercial the business world of trade and commerce, companies, contracts, insurance and banking. Solicitors act for a full range of business interests from the owner of the corner shop to the boards of major public companies, advising businesses on the numerous and detailed provisions of company, partnership and insolvency law. Litigation raising or defending actions in the civil courts or by reference to arbitration or settling such claims or disputes out of court. Solicitors can appear in the Sheriff Courts in Scotland and also appear at Tribunals. Conveyancing the buying and selling of property and the arranging of loans, the preparation of Title Deeds, leases and other legal documents. In addition, some solicitors specialise in the buying and leasing of commercial properties such as factories, shops and hotels. Criminal - advising and appearing on behalf of accused persons in the courts across the complete range of criminal law, from minor motoring offences to serious crime. Procurators Fiscal investigate and prosecute crime. Estate Work the management of landed estates in rural areas. Financial Services advising on mortgages and investments. Wills, Executries and Trusts advising on and preparing wills, the administration and distribution of funds passing on death, or contained in a trust and the settlement of tax liabilities. What services does an advocate provide?. Advocates specialise in litigation or pleading a case in court, although they will also appear in a variety of other forums, and they can also provide written advice. A description of the legal services the advocate provides is given on the Faculty s website 4 : Advocates offer specialist legal representation and advice to clients of solicitors and of members of certain other professional bodies. Thus practitioners in Scotland, in the cities and in rural areas alike, are able to serve their clients by drawing on a pool of independent lawyers who are both skilled court pleaders and also advisers on a wide range of legal problems both general and specialist. Collectively, Advocates offer an unrivalled range of skilled, independent, objective legal services. The fact that they have no contractual relationship with clients helps them to maintain a valuable extra degree of detachment relative to all of the services which they provide. The advantages of a full-time commitment to advocacy cannot be over-estimated. These include enhanced litigation skills, greater reliability in advisory work and the ability to take on cases of any duration. Rights of Audience 4 2
3 7. Section 24 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (which inserts 25A of the Solicitors (Scotland) Act 1980) enables qualified solicitors, subject to compliance with the rules of Council of the Law Society of Scotland, rights of audience in the Court Of Session, the House Of Lords and The Judicial Committee Of The Privy Council. 8. Rights of audience for advocates are described in the career brochure on the Faculty s website 5 The advocate has a right of audience before the House of Lords and the Supreme Courts of Scotland the Court of Session (civil cases) and the High Court of Justiciary (criminal cases). Certain solicitors with extended rights of audience may also appear in these Courts. Advocates have, jointly with all solicitors, a right of audience before the lower courts the Sheriff Courts (civil and criminal cases) and the District Courts (minor criminal cases). Advocates may also appear before a host of tribunals and disciplinary bodies, such as Industrial Tribunals, Planning Inquiries and Arbitration. England and Wales 9. The Ministry of Justice decided against defining legal services by lawyers in the Legal Services Act 2007 Act as previous attempts to do so in the past had fallen through. Instead Clause 12 of the 2007 Act defines reserved legal activity and legal activity as extracted below: 12 Meaning of reserved legal activity and legal activity (1) In this Act reserved legal activity means (a) the exercise of a right of audience; (b) the conduct of litigation; (c) reserved instrument activities; (d) probate activities; (e) notarial activities; (f) the administration of oaths. (2) Schedule 2 makes provision about what constitutes each of those activities. (3) In this Act legal activity means Legal Services Act 2007 (c. 29) Part 3 Reserved legal activities (a) an activity which is a reserved legal activity within the meaning of this Act as originally enacted, and (b) any other activity which consists of one or both of the following (i) the provision of legal advice or assistance in connection with the application of the law or with any form of resolution of legal disputes; (ii) the provision of representation in connection with any matter concerning the application of the law or any form of resolution of legal disputes. (4) But legal activity does not include any activity of a judicial or quasi-judicial nature (including acting as a mediator). (5) For the purposes of subsection (3) legal dispute includes a dispute as to any matter of fact the resolution of which is relevant to determining the nature of any person s legal rights or liabilities. () 24 makes provision for adding legal activities to the reserved legal 5 Page 3 3
4 TP TP PT PT HTUwww.legislation.qld.gov.au/LEGISLTN/CURRENT/L/LegalProA07.pdfUTHT LPBRG 2 Australia activities. 10. The Legal Profession Amendment (Incorporated Legal Practices) Act 2000TP PT, whose Schedule 1 inserts Division 2A into Part 3 of the Legal Profession Act 1987, amends the 1987 Act to enable solicitors in New South Wales to incorporate their legal practices. It defines legal services as legal services means work done, or business transacted, in the capacity of a solicitor The Legal Profession Act 2007TP PT which establishes the Legal Services Commission, the legal profession and legal services market in Queensland provides in Schedule 2 two definitions: in-house legal services mean legal services provided to a corporation or a related body corporate by a person employed by the corporation concerning a proceeding or transaction to which the corporation or the related body corporate is a party. legal services means work done, or business transacted, in the ordinary course of legal practice. 12. It is notable that the English definition of reserved legal activity is broadly similar to the reserved activities in section 32(1) of the Solicitors (Scotland) Act 1980 while the definition of legal activity is extremely broad, and would encompass many services which are currently provided by non-lawyers, such as advice on tax, planning and welfare benefits. The Australian definitions are essentially tautologous legal services are what lawyers do. Options 13. The policy options offered as the Group s starting point to prescribe legal services in ABS firms come within the regulation in Scotland are to: seek to identify a new, broader definition of the legal services which are subject to regulation, or retain the current approach - that there are certain things which only solicitors and advocates can do, and other provisions which allow under certain circumstances others to undertake some of these responsibilities. HTUhttp://www.parliament.nsw.gov.au/prod/parlment/nswbills.nsf/291e2aaa fca25a02001d957d/1d35 0a3f9b5daa8ca !OpenDocumentUTH 7 4
5 14. Were we to try to define legal services, it seems likely that we would come up with a definition along similar lines to that of legal activity in the Legal Services Act However, were we to specify that regulation applied to such legal services, it would greatly widen the scope of regulation, arguably with a disproportionate and burdensome impact (e.g. on voluntary advice agencies). 15. Our current thinking is to favour retaining the current approach, namely that The professions of solicitors and advocates should be regulated by the Law Society and Faculty of Advocates respectively There should continue to be certain services which only solicitors and/or advocates can undertake, broadly defined as now It should remain open to others to apply for rights of audience or the ability to operate as licensed conveyancers or executry practitioners, under the procedures set out in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 There will be other services which solicitors and others can undertake subject to specific regulation, which may be carried out by the Law Society and Faculty, such as financial services. 1. However we are open to consideration about whether some forms of service offered by non-lawyers might require further regulation e.g. will writers, debt advisers and claims companies. 17. This is a pragmatic approach which is likely to be relatively simple to provide for in legislation. However, it is slightly untidy, particularly in retaining the 1990 Act provisions. 18. It effectively means that ABS s will only be subject to regulation if they have a solicitor, advocate, licensed conveyancer or executry practitioner in them. 19. There are also issues about how regulation of an entity involving such a practitioner will operate, which will be discussed in subsequent papers. At this stage, we are only seeking to establish the basic scope of the legislation. The Group is asked To agree the option for defining regulated legal services in Scotland to be recommended in the consultation paper. To consider what provision, if any, needs to be made for legal services not provided by solicitors, advocates, licensed conveyancers or executry practitioners. Rosemary Polland Legal Profession Bill Manager 03 October
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