Tuesday, July 31, 2007

OFT put Executive on the spot by recommending lifting of restrictions in Scottish legal services

The Office of Fair Trading has predictably come out in favour of the Which? 'super complaint' and is recommending the opening up of legal services markets in Scotland.

This will ultimately benefit both the legal profession and the public, although from today's media exposure so far, which sees the Law Society of Scotland apparently caught off guard on this, the policy of the profession's regulator is that of maintaining resistance to the changes recommended by the OFT.

Perhaps the 'knights of the square table' at Drumsheugh Gardens were hoping their campaign against the Which? 'super complaint' had worked, notwithstanding the apparent occasional threat to the Scottish Executive that if such changes were implemented .. all 'friendly' deals with the Executive would be off, including the Legal Aid case boycott affair.

The view of one happy campaigner is expressed HERE after shredding the Cabinet Secretary for Justice yesterday on similar issues HERE

Over to the OFT for the details, and reporting on the issue from the Herald Newspaper.

OFT response to super-complaint recommends lifting restrictions in the Scottish legal services market

110/07 31 July 2007

The OFT has today made recommendations to the Scottish Executive and the legal professions in Scotland to lift restrictions which could be causing harm to consumers.

In Scotland there are restrictions on advocates' business structures, solicitors and advocates providing services jointly, third party entry into the market, and direct consumer access to advocates. The decision to recommend lifting these restrictions follows a super-complaint from Which? that called for these restrictions to be removed.

Download full response to the super-complaint (pdf 139 kb).

Which? argued that the current restrictions against such practices prevent legal services providers in Scotland from adapting their business to best fit the needs of Scottish consumers. The OFT concluded that the restrictions are unnecessary and believes that there would be benefits to consumers if they were lifted – such as efficiency gains and higher levels of innovation in the provision of legal services. The OFT is now looking to the Scottish Executive to outline its approach to removing these restrictions in Scotland, and the Scottish Executive has agreed to respond formally to these recommendations within 90 days.

Sean Williams, OFT Executive Director of Markets and Projects, said:

'There should be real benefits to Scottish consumers in allowing solicitors and advocates to adopt the most efficient businesses structures. I hope the Scottish Executive can work with the profession to remove restrictions that, in our view, are unnecessary and prevent solicitors and advocates from innovating to meet the needs of consumers.'

Kyla Brand, OFT Representative in Scotland, said:

'Scotland's legal services are hugely important for individuals and businesses – they underpin economic success and have always done so. The OFT wishes to see them grow and innovate, competing on equal terms with providers across the UK. We are committed to working with the parties in Scotland to make the system work better for all.'


1. The right to submit super-complaints was created by section 11 of the Enterprise Act 2002. A super-complaint is defined under section 11(1) of the Act as a complaint submitted by a designated consumer body that 'any feature or combination of features, of a market in the United Kingdom for goods or services is or appears to be significantly harming the interests of consumers.'

2. On 8 May 2007 Which? submitted a super-complaint to the OFT about credit card interest calculation methods. See Which? website for details. Section 11(2) of the Act requires the OFT, within 90 days of receiving a super-complaint, to publish a reasoned response saying what action, if any, it proposes to take.

OFT backs consumer watchdog’s call for reform of Scottish legal services
LUCY ADAMS, Chief Reporter July 31 2007

An investigation into concerns that Scots are not getting sufficient access to affordable justice and legal representation has concluded that the current regulatory regime is "restrictive" and harmful to consumers.

The Office of Fair Trading (OFT) has upheld calls by Which?, the consumer watchdog, for a reform of the legal services market in Scotland, The Herald can reveal.

A "super complaint" lodged with the OFT in May by Which? recommended it address fears that the current regulation of Scottish legal firms is hindering competition in the market, restricting choice and pushing up the price.

The OFT has upheld that complaint and now the Scottish Executive has agreed to prepare a formal response within 90 days. However, any reform of the legal services market in Scotland could threaten the Scottish legal profession's closely guarded right to self-regulation.

Under reforms planned for the sector in England, banks and supermarkets will soon be able to join forces with law firms to provide legal services.

However, Which? believes north of the border there has been little appetite for exploring, let alone implementing, alternative ways of doing business from the legal profession and the executive.

Following a review by Sir David Clementi in England, organisations such as Tesco and the RAC should, from next year, be able to offer legal services alongside sandwiches or roadside assistance.

The changes, supported by the OFT, are intended to make the legal profession more responsive to consumer needs.

In Scotland activities such as conveyancing, litigation and obtaining confirmation in executries must be undertaken by solicitors. Other services such as will-writing can be done by people other than solicitors, but in practice that happens infrequently.

Following moves to liberalise the regulations on legal firms south of the border, HBOS, which has two million customers, launched a new service offering "everyday legal products" to customers at what it claims will be considerably lower fees than those offered by High Street solicitors. The service is being rolled out through the bank's Halifax arm in England and Wales. However, Joel Ripley, head of Halifax Legal Solutions, said last year there are plans to extend it to Scotland.

The Halifax service, which will include discounted conveyancing, will preparation and a 24-hour legal helpline, is also set to provide access to a website where customers can prepare their own documents, including tenancy agreements and letters of complaints about faulty goods. These will be reviewed by qualified lawyers.

Customers will pay an annual membership fee of £89 which will give them free access to the helpline.

Sean Williams, an executive director of the OFT, said: "I hope the Scottish Executive can work with the profession to remove restrictions that in our view are unnecessary and prevent solicitors and advocates from innovating to meet the needs of consumers."

The OFT is now looking to the Scottish Executive to outline its approach to removing what it sees as "restrictions" and the Scottish Executive has agreed to respond formally within 90 days.

A spokeswoman for Which said: "We are delighted by the decision of the OFT."

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