ABS - the next phase

The Scottish Government published its public consultation entitled “Wider Choice and Better Protection – a Consultation Paper on the regulation of legal services in Scotland” earlier this month.

The Government indicated in September 2008 that its legislative programme would include a Legal Professions Bill. The principal purpose of this bill would be to facilitate the introduction of alternative business structures. The Government also indicated that the bill would be preceded by a consultation paper which would be published in early 2009, setting out the issues and proposals. This note sketches how the Society dealt with the alternative business structure issue from its inception, which predated the Scottish Government’s announcement by more than a year.

The Society’s own policy paper “The Public Interest: Delivering Scottish Legal Services” was published in April 2008 and was approved at the Society’s AGM in May 2008.

The Alternative Business Structures Working Party had been formed in January 2007 to develop this policy and, after consultation with the profession and following approval by Council, promoted the view that the legal profession in Scotland should be able to offer its services through structures which best meet the demands of modern society and a global economy, and that practitioners should be free to retain their traditional business model but that that should not be their only choice.

The AGM in May 2008 approved the policy that alternative business structures should be permitted “subject to an appropriate system of regulation being in place and once the necessary and regulatory changes have been implemented”.

That policy gave renewed vigour to the Alternative Business Structures Working Party to explore the various options and issues presented by ABS.

In the past two years, the working party has met frequently as the debate on ABS and how they should work in Scotland has developed.

The working party, which since the First Minister’s legislative statement in September has become the ABS and Legal Profession Bill Working Party, is chaired by Richard Henderson, the Society’s President and comprises: Michael Clancy, Bruce Ritchie and Philip Yelland from the Society’s executive; and Alan Campbell, James Dickson, Ruthven Gemmell, Ranald Lindsay, Hubert Ross, Ian Smart and Eileen Sumpter representing the profession.

In that context the working party mirrors the process which the Scottish Government’s Legal Profession Bill Reference Group has embarked upon.

During October 2008 the Cabinet Secretary for Justice, Kenny MacAskill MSP announced that he was to consult some of the major stakeholders in the legal profession to develop the Government’s plans for the profession.

The Bill Reference Group has considered options for the forthcoming Legal Profession Bill which will introduce alternative business structures for legal services in Scotland.

The Group has met five times in the past three months, and issues considered include how best to protect the core values of the legal profession and ensure high quality of service, how to regulate firms which combine legal and professional services, and how best to support access to justice in the new environment.

The Group’s findings have helped to inform the formulation of the public consultation published earlier this month. The consultation paper contains chapters on:

• The background to reform Alternative business structures Who will covered by the bill?
• The principles of regulation
• The regulatory approach
• Ownership of legal services
• The governance of the Law Society of Scotland
• The regulatory position of the Faculty of Advocates;
• and Claims management companies.

The consultation period will run until 3 April 2009. This is an important consultation and all members of the profession should take the opportunity to read the consultation and respond to the questions asked. It would be helpful if those who respond to the consultation could copy their responses to katiehay@lawscot.org.uk to help inform the Society’s response on behalf of its members.

The Bill Reference Group comprises:

• Professor Alan Paterson OBE, Director of the Centre for Professional Legal Studies, Strathclyde University
• Richard Henderson CB
• Richard Keen QC, Dean of The Faculty of Advocates
• Lindsay Montgomery, chief executive of the Scottish Legal Aid Board
• Sarah O’Neill, principal policy advocate at Focus (formerly the Scottish Consumer Council)
• Sue Aspinall, principal case officer, Market & Project (Professions), Office of Fair Trading
• Which? and the Institute of Chartered Accountants of Scotland are also being consulted through correspondence.