David Prosser: At last it's time to bring lawyers to book
Saturday 22 October 2005
Thank heavens that the Government is finally seeing sense and launching an independent complaints service for people who have a dispute with a solicitor. The Law Society, which currently regulates the legal sector, is predictably concerned by the Department for Constitutional Affairs' view that a new watchdog is necessary. But this reform is long overdue.
For years, consumer groups have argued that the Law Society takes too long to deal with complaints and, more seriously, that consumers don't always get a fair deal. The Law Society also acts as the professional body of solicitors, so complainants often feel - rightly or wrongly - that they are victims of a whitewash, with lawyers watching each other's backs.
It doesn't really matter whether people are right to be so cynical. In an area as important as legal services, a complaints service must be totally scrupulous, but it must also be seen to be fair. Otherwise, people's faith in the legal profession will be dangerously undermined - many consumers already feel that there is little point complaining about the service that they have received from a solicitor.
In the financial-services industry, there was a similar system of self-regulation until 1997, when the new Labour government launched the all-powerful Financial Services Authority and the independent Financial Ombudsman Service. And yet, until now, the same standards have not been applied to the law.
An improved complaints service is also crucial because the Law Society does not currently police the activities of the growing number of claims companies. These firms, which encourage people to take legal action in order to win compensation, often on a no-win, no-fee basis, sometimes provide an excellent service, but there are also cowboy operators. Despite suspicions about such sharks - and concern about Britain following the US model of a compensation culture - the Government is anxious to encourage claims-handling companies, as part of its ongoing efforts to slash the Legal Aid bill. But it's no good asking people to forgo state support for legal action unless they can trust the legal representatives to whom they must otherwise turn.
It would help if people had better access to legal advice. Currently, most people have no idea how to find a solicitor. The Government is keen to allow lawyers to team up with other professionals, including accountants and surveyors, to provide "one-stop shops" offering a range of legal and non-legal services. This principle needs to be extended. There is no reason why banks, or even supermarkets, should not be allowed to launch their own legal practices, as long as their solicitors are policed as effectively as stand-alone lawyers. There was a time when you could find a firm of local solicitors on most high streets. Enabling, say, Tesco, which already offers comprehensive financial services, to branch out into legal work would provide better access to the law for huge numbers of people.
How much longer can the farce of Equitable Life's legal action against its former directors and advisers go on? So far, the life insurer has dropped a £700m claim against its former auditor, Ernst & Young; half of a £1.8bn claim against 14 former directors; and the cases against four of these ex-employees. Yet Equitable is still racking up legal costs against 10 former directors, in the hope that it won't be saddled with their lawyers' bills. How the insurer thinks it can possibly win these cases, having dropped so many identical actions already, is impossible to know.
Every penny that Equitable spends fighting legal action comes out of policyholders' funds. Its customers can ill afford further erosion of their savings.
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