Martin Partington: Spotlight on the Justice System

One poorly understood development in the civil litigation field is that of litigation funding. This refers to the practice of the provision of financial resources to a claimant so that litigation can proceed. Litigation Funding is the arrangement through which a litigant obtains the financing of all or part of its legal costs from a private, commercial Litigation Funder who has no direct interest in the proceedings. In return, and assuming the case is won, the funder will receive an agreed share in the proceeds. If the claim is, however, unsuccessful, the funder will lose its money and nothing will be owed to it by the litigant.

The share in the proceeds is negotiated between the funder and the litigant. This financial reward of the funder can take a variety of forms. It typically consists of either a percentage of the damages recovered, or a multiple of the amount advanced by the funder, or combination of these options. Litigation Funding provides a cost effective financing tool that must be taken into consideration by solicitors when planning the funding of a case. Solicitors will have to bear this in mind when advising on this issue.

The Litigation Funding market in the UK has, in the last decade, experienced increased mainstream attention due to its potential to provide a valuable means for access to justice, particularly for SMEs.

However, Litigation Funding is not a substitute for legal aid. This financing tool is currently limited to commercial cases of a high value. It is not suitable for consumer cases, personal injury cases or generally claims that do not carry a sufficiently high level of damages.

For more information go to http://associationoflitigationfunders.com/

Despite its relative newness, there have been complaints that the  current legal services regulatory landscape is too complex and burdensome. These complaints have been raised by stakeholders through a number of routes, including the Cabinet Office’s Red Tape Challenge.To obtain more information about the challenges legal service providers face the Ministry of Justice has decided to conduct a review of the legal services statutory framework.

The review will consider what could be done to simplify the regulatory framework and reduce unnecessary burdens on the legal sector while ensuring there is still appropriate oversight. It will consider the full breadth of the legislative framework, covering at least 10 pieces of primary legislation and over 30 statutory instruments.

The Press Release announcing the review states that the MoJ are also open to comments on the interaction between the legislative framework and the detailed rules and regulations of the approved regulators, licensing authorities and the Legal Services Board and Office for Legal Complaints, although these are not owned by MoJ.

The first stage of the review is a ‘call for evidence’ from stakeholders. The evidence provided to the MoJ will be analysed to identify potential ways in which the framework might be simplified. MoJ are interested in hearing legal service providers’ concerns with, and ideas for reducing, regulatory burdens and simplifying the legal services regulatory framework.

The closing date for the call for evidence was 2 September 2013. There are no indications of what the outcome of this process will be, but developments will be noted in later blogs on this site.

Source: http://www.redtapechallenge.cabinetoffice.gov.uk/moj-review-of-legal-services-regulation/

Those coming new to the study of law are facing a rapidly changing legal profession. The ability to create Alternative Business Structures (ABS) is one of the factors driving this change. At present there is little in the way of organised research to enable students to find out what the impact of their creation is on the ways in which legal services are delivered. But the Legal Futures website (see links at the side of this page) is a good place to start finding out what is happening.

I last wrote about developments with ABS in March 2013. I was commenting on the report of the Solicitors Regulatory Authority on its first year of operation. I noted that the number of ABS licensed by the SRA was then over 100.

Since then, numbers have continued to rise. Now (August 2013) the current total is 183. And there are some big beasts waiting in the wings who have started the process of applying for a licence under the scheme. Most notable is the application by the Direct Line Insurance company – the largest motor insurer in the UK – to apply for an ABS licence. This has been done in partnership with a legal practice Paribas Law – which itself was one of the early firms to achieve an ABS licence.

At least part of the reason for Direct Line seeking to do this is that, with the abolition of referral fees (from which it derived a lot of income) it now wants to provide the legal services that arise out of accident claims itself.

But developments in the ABS are not limited to high profile applications such as Co-op Legal Services or BT or now DLG Legal Services (which is the commercial name being used by Direct Line in its application).

At the other end of the market a number of existing providers of legal services at the social welfare end of the market have been contemplating how ABS might help them sustain their services, facing as they are huge cuts in publicly funded legal aid. Leading the field here is the legal advice charity in Leicester, which in April 2013 became the first not-for-profit organisation to set up an alternative business structure (ABS). The Community Advice and Law Service (CALS) won approval to launch Castle Park Solicitors Community Interest Company, whose profits will go to support the continuing work of the charity.

Research carried out by Warwick University earlier this year suggested that around 20% of existing advice centres are likely to explore this option. It is far to early to conclude from this example that the ABS will fill the funding gap left by reductions in legal aid. But it does show that those lawyers who are dedicated to providing legal services to the poor are being innovative in the light of public expenditure cuts.

To date I have only commented on ABS approved by the SRA. But it should be remembered that the Council of Licensed Conveyances also has authority to license ABS applications for companies supplying conveyancing services. To date, 38 licences have been granted.

For information about ABS available in Legal Futures, see http://www.legalfutures.co.uk/tag/alternative-business-structures

For information about SRA licences see http://www.sra.org.uk/solicitors/firm-based-authorisation/abs-register/register.page

For information about CLC licences see http://www.clc-uk.org/absregister.html

The report from the Legal Education and Training Review, Setting Standards: The future of legal services education and training regulation in England and Wales, was published in late June 2013. I have been mulling over how I should treat it in this blog for some time. It is long – over 370 pages. It contains 26 recommendations. To be honest it is not an easy read.

For those readers of this blog who those coming new to the study of law – who as you know are my ‘target audience’ – you can rest assured that there are no immediate changes to Legal Education that will be made.

The reason for this is that the Review did not have any remit to direct what changes should be made to the system of legal services education and training (LSET) that exists in England and Wales. It merely sets out its views on factors that should be taken into account by the professional regulatory bodies that established the review in the first place: the Solicitors Regulatory Authority, the Bar Standards Board and ILEX Professional Standards. These bodies will have to decide what they are going to do with the report and this will take some time. Any changes to legal education and training arising from this report will not occur for a number of years.

That said, there are recommendations in the review which will be introduced and which will affect both law students and qualified professionals in the years ahead. I set out here a summary of what I regard as the main recommendations

1. Competence

The review recommends that there should be a more detailed definition of what it means to say that a person has the competence to be a lawyer. To achieve this, there needs to be a robust and systematised range of outcomes and standards, coordinated between the professions, which would demonstrate that initial competence is achieved.

• Learning outcomes should be prescribed for the knowledge, skills and attributes expected of a competent member of each of the regulated professions.
  
• Such guidance should require education and training providers to have appropriate methods in place for setting standards in assessment to ensure that students or trainees have achieved the outcomes prescribed.
• Learning outcomes for prescribed qualification routes into the regulated professions should be based on occupational analysis of the range of knowledge, skills and attributes required. They should begin with a set of ‘day one’ learning outcomes that must be achieved before trainees can receive authorisation to practise.
  

Introduction of the idea of ‘day one’ learning outcomes is probably the most innovative aspect of the report. It would enable those who had demonstrated that they had acquired the skills determined to be needed on ‘day one’ of a person starting to practice should be able to achieve the authority to practise from that date. This could mean, for example, the end of 2 year training contracts for solicitors. New solicitors could be authorised to practice once they demonstrated their core competence.

2. Content

As regards the content of courses,

• LSET schemes should include appropriate learning outcomes in respect of professional ethics, legal research, and the demonstration of a range of written and oral communication skills.
• The learning outcomes at initial stages of LSET should include reference (as appropriate to the individual practitioner’s role) to an understanding of the relationship between morality and law, the values underpinning the legal system, and the role of lawyers in relation to those values.
• Advocacy training across the sector should pay greater attention to preparing trainees and practitioners in their role and duties as advocates when appearing against self-represented litigants.
• Learning outcomes should be developed for post-qualification continuing learning in the specific areas of professional conduct and governance, management skills and equality and diversity (not necessarily as a cyclical obligation).
• There should be a distinct assessment of legal research, writing and critical thinking skills  in the Qualifying Law Degree and in the Graduate Diploma in Law.

There are also more detailed recommendations about the need for better training in will writing and advocacy (for solicitors) and the use of mediation (for barristers)

3 Supervised practice

The Review regards periods of supervised practice as important. Thus

• LSET structures which allow different levels or stages (in particular formal education and periods of supervised practice) to take place concurrently should be encouraged where they do not already exist.

I strongly agree with this idea; the understanding of law is enhanced by seeing its application in practice. But the review does not recommend that this be a mandatory feature of LSET.

• Supervisors of periods of supervised practice should receive suitable support and education/training in the role. This should include initial training and periodic refresher or recertification requirements.

4 Continuing professional development

The review is most unhappy about current arrangements for undertaking CPD. It says, bluntly, that “The majority of CPD schemes in the legal services sector are out-of-line with recognised best practice in professions generally and by comparison with ‘leading edge’ schemes for lawyers in other jurisdictions… The potential importance of CPD to ensuring continuing competence highlights the need to create schemes that are effective at supporting useful learning and reflection, and provide appropriate quality assurance.” It recommends a series of changes to make CPD more effective. I am sure that these recommendations will be taken forward.

5 Apprentices, paralegals and work experience

The Review makes a number of interesting comments on the importance of developing apprenticeship schemes (similar to those already offered by CILEX) to permit a non-graduate route of entry to the legal profession. At least part of the motivation for these recommendations is that such routes to entry may be more affordable than the current norm of a three year degree followed by a further year of professional study

It also notes that law firms are increasingly using para legal staff to provide legal services; it does not at this stage think there is any need to regulate paralegals, It makes a further interesting suggestion. ” In the context of the significant and substantial changes to both the private and public funding of legal services, there may be a role for independent paralegals in delivering well-priced quality services outside the currently regulated market. Further work should be undertaken to explore the potential of licensed paralegal schemes.” This could well create a context for the development of new forms of legal practice.

To ensure that those seeking work experience get a fair chance of getting an internship or other work experience, the Review recommends:

• In the light of the Milburn Reports on social mobility, conduct standards and guidance governing the offering and conduct of internships and work placements should be put in place.

6 Next steps

Given that this review is the start of a process, it also recommends:

• A body, the ‘Legal Education Council’, should be established to provide a forum for the coordination of the continuing review of LSET and to advise the approved regulators on LSET regulation and effective practice.

• In the light of the regulatory objectives and the limited engagement by consumers and consumer organisations in the research phase of the LETR, it is recommended that the regulators ensure that appropriate consumer input and representation are integrated into the consultation and implementation activities planned for the next phase of the LETR.

My question is whether these recommendations will in fact match a world in which increasing numbers of Alternative Business Structures are being created, and in which the cost of legal education is so high. What do you think?

To read the report go to http://letr.org.uk/the-report/index.html

As part of the programme of reform of the Family Justice system, the Government has just announced a consultation on how professional standards of those giving expert testimony in family cases might be improved.

The Consultation Paper states:

‘Experts play an important role in assisting the court by providing advice on matters requiring specialist expertise outside the knowledge of the court. In family proceedings relating to children, they may come from many different professions and disciplines including doctors, nurses, psychologists and independent social workers.
‘The standards in this paper are a response to a recommendation made by the Family Justice Review that standards should be developed for expert witnesses in the family courts.’

What the paper proposes are ‘high level’ standards to which those called as experts in family cases would have to agree to. As the paper says:

‘The Ministry of Justice proposes that, in publicly funded family proceedings relating to children, solicitors may only instruct experts who meet the relevant standards. In both publicly and privately funded cases, the expectation is that parties will provide sufficient information to satisfy the court not only that an expert is needed, but also that the proposed expert meets the standards.’

The standards, which have been drawn up by the Family Justice Council,  cover areas including:

• the expert’s area of competence and its relevance to the particular case;
• maintaining expertise through Continuing Professional Development activities;
• statutory registration or membership of an appropriate professional body;
• applying the standards to overseas experts;
• compliance with the Family Procedure Rules and Practice Directions;
• seeking feedback from solicitors and the courts; and
• good practice in relation to fees in publicly funded cases

The Consultation runs until 18 July 2013. The Government hopes they will become effective later in 2013.

For more detail go to https://consult.justice.gov.uk/digital-communications/expert-witnesses/consult_view