Department of Constitutional Affairs - The Future of Legal Services: Putting Consumers First
Response by Thompsons Solicitors - January 2006
Thompsons is the most experienced trade union and personal injury firm in the UK with a network of offices across the UK, including the separate legal jurisdictions of Scotland and Northern Ireland.
Thompsons only acts for trade union members and the victims of injury, never for employers or insurance companies. We represent around 8,000 trade union members every year in employment rights cases and at any one time the firm will be running 70,000 claims.
The firm participates regularly in government consultations on legislative issues. It is not our intention in this response to deal with every issue that this White Paper raises, but rather to address those areas that we believe will have particular impact on our trade union clients, and therefore on our work.
In our response to David Clementi’s review of the regulatory framework for legal services, we said that the Government should only determine which legal services should be included or removed from the regulatory framework in full consultation with the providers of legal services, including the trade unions.
Trade unions remain the largest single provider of legal services, including employment advice and representation, support for work and non-work related personal injury claims for members and their families, free legal advice, conveyancing and wills.
Thompsons provides specialist legal services to the unions and supports them in their campaigning work which has succeeded in changing the law in favour of the claimant in many cases. Indeed the aims of the DCA set out in Chapter 3 can already be found in the trade union legal services model.
- The unions provide high quality legal services delivered to suit the consumer, not the provider.
- The services provided by specialist lawyers to the unions are closely monitored and quality controlled by the union client.
- Union legal services foster innovation and diversity by being truly independent and therefore prepared to pursue ground-breaking cases.
We are concerned that the unions have not been fully consulted on the regulatory framework and are not mentioned in this White Paper. It is not clear how these proposals will impact on the unions in the short, medium or long term, but it is vital, in the interests of providing fair and proper access to justice, that nothing is done to prevent the trade unions from continuing to provide free, high quality legal services to their members and their members’ families.
The Legal Services Board
Thompsons agrees that the current structure for the regulation of legal services is cumbersome. We support the principle of simplification. But it is equally important that it is accessible, responsive and transparent. This is acknowledged on page 27 of the White Paper.
Thompsons has personal experience of the lack of transparency in the current system. A Law Society investigation into, we believe, our handling of miners’ compensation claims has been ongoing for many months. Yet throughout the process we have experienced a lack of information from the Law Society about what it is they are investigating. We have in fact learnt more from the press than we have our own regulatory body.
Whilst we are entirely confident that our actions on behalf of the mining unions in the North East, Scotland and Wales have been proper and that this is an attack on union legal services generally, the lack of transparency in the process cannot be helpful for either side. It sows confusion and mistrust. A firm being investigated can better assist if it understands the nature of the complaint made against it.
Definition of legal services
Trade unions provide the sort of non-adversarial approach to disputes that the government champions. Government policy actively encourages individuals to be employed and thereby more engaged with society. To in any way threaten the positive work done by trade unions to protect jobs and individuals at work would undermine this policy position.
We are extremely concerned about the suggested definition in Appendix C of the “boundaries of legal services”. If this definition is adopted, the work of trade unions may be threatened. Unions provide all the legal services contained within the definition, namely:
- “advice, assistance and representation in relation to the operation or exercise of legal rights and the performance of legal obligations” and
- “advice, assistance and representation in relation to all forms of resolutions of legal disputes”.
The exclusion of advice not given in the course of business may apply to trade unions if it is considered that they are not a business. But no definition of what is “a business” is provided in this White Paper. Clarification is urgently needed so that trade unions are exempt from regulation by the LSB and can carry on their work.
When a union member has a problem at work, their union will represent them. They will represent them at shop floor or tribunal level. Union reps are trained negotiators and many will have received training in employment law. They are not, however, qualified lawyers.
Most workplace issues are dealt with industrially, with the union rep giving advice to the member about their legal rights and, perhaps, representing them at an internal discipline or grievance hearing, or at a tribunal if the case proceeds that far.
There is no need for a lawyer to become involved at this stage. Indeed it can be counter-productive. A union rep can always seek advice from the union’s full time officer or legal officer. And the union’s lawyers can give advice on the issues without becoming involved in the case.
Trade union law firms such as Thompsons are only brought in by the unions to act in a case when all the negotiating procedures and avenues have failed. A lawyer is usually instructed because the only option is compensation, not re-instatement or some other remedy. That is how it should be.
Trade unions must be allowed to continue to negotiate and provide legal advice and representation. Society will not benefit from a system that prevents this sort of legal representation. If unions are forced to refer every request for workplace/legal advice and representation to lawyers because their work comes within the definition of legal services, the lawyers, not society, will be the only beneficiary of this White Paper.
Alternative Business Structures
Thompsons does not have a problem in principle with the introduction of ABS/MDPs, as set out in Chapter 6 of the White Paper. However, we are concerned that there is a regulation or safeguard in place to protect the consumer, ensure that they have access to independent justice, and prevent anti-competitive practices.
The White Paper acknowledges the need for a “fitness to own” test. The Legal Services Board (LSB) will have rules dealing with conflict of interest. However, we are concerned that the White Paper does not acknowledge how the market may be affected and distorted by allowing those with an interest in the outcome of personal injury litigation to buy into law firms whose independence must then be compromised.
We are not satisfied that a percentage level of ownership will prevent this situation, as any interest by an insurance company in a personal injury law firm must run the risk that the access to independent justice for the injured person is compromised.
How can a law firm that receives its work from one source, is paid by one source, and is owned by that source be truly independent and fair in the advice that it gives?
Whilst the Office for Fair Trading could ask the LSB to look into such a situation, this is a cumbersome route when this review of Legal Services is specifically aimed at reducing over-burdening regulation.
It is acknowledged that there will be a route for consumers to complain on a case by case basis, but by then the firm’s structure will already have been set up. If it is wrong for one organisation to dominate the telecoms industry or the supermarket sector, then equally it must be wrong for, say, the insurance industry to dominate the personal injury legal services market. This should be an over-arching principle, and not a matter left to be taken up by consumers on a case by case basis.
20 January 2006
For further information:
Director of Policy and Public Affairs
Great Russell Street
020 7290 0009