Chancery Lane calls for delay in implementing civil justice reforms

The Law Society has called on the Justice Secretary to delay the introduction of proposed civil justice reforms by six months.

Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is due to come into force on 1 April 2013.

In a letter to Chris Grayling, Law Society President Lucy Scott-Moncrieff said: “The 1 April 2013 deadline is far too soon when the necessary regulations and changes to the Civil Procedure Rules have yet to be published.

“The implementation will require considerable changes to the case management systems, work processes and business planning of law firms such that it is highly unlikely that most firms will be able to cope. The result is likely to be significant difficulties for the operation of the civil justice system.”

Scott-Moncrieff warned that the legal profession and the legal system would need time to assimilate the changes if they were to be implemented smoothly.

The letter identified a number of reasons why the transition was unlikely to be smooth (in contrast to the introduction of the Woolf reforms). They were:

• The RTA Portal Company had expressed doubts about its ability to meet the deadline of April 1 2013 to bring in the changes needed to encompass employment liability and public liability claims. The protocols for the process were not yet complete either.
• The rules governing qualified one-way cost shifting had yet to be approved. “Understanding these rules will be crucial to the advice that solicitors will give to claimants and defendants on their actions in these claims. It will be difficult for the profession to receive the necessary advice and guidance on the implications of the rules in the time.”
• The Law Society had been invited by Ministry of Justice officials for further discussions about the rules governing conditional fee arrangements and damages-based agreements “which suggests that the regulations will not be available until early in the new year”.

The Law Society President warned that law firms would need to ensure their business model was secure.

She said: “We doubt whether firms will be able to make the necessary adjustments in order to enable them to develop arrangements which are both fair to clients and enable them to make a legitimate profit.

“Furthermore, many of our member businesses are at risk because they are unable to produce satisfactory business plans which are being requested by their banks. This could, in certain cases, result in the banks refusing to continue with business funding loans and overdraft facilities.”

Scott-Moncrieff argued that the rushed implementation of LASPO would inevitably lead to regulations that were “ambiguous, poorly consulted upon and which may well not work”.

She added that the changes could see solicitors confused or unable to adjust in time to the reforms, and provide poor advice and/or retainers that were disadvantageous to their clients and themselves.

The Law Society President also suggested that pressing ahead with the reforms could lead to unintentional breaches of rules and significant satellite litigation “which will simply add to costs, create further uncertainty and increase the work of an already overburdened civil courts system”.

The letter meanwhile said there were “real concerns” about the effect of the referral fees ban, which Chancery Lane supports, on the legal services market and, again, about how law firms will adjust in time for its introduction.

Scott-Moncrieff criticised a “substantial lack of clarity about the precise extent of the ban”.

She pointed out: “It was only on 18 October this year, with the publication of the SRA consultation on the subject, that the first indications of the approach to be applied by the regulators became clear. There remains substantial ambiguity about what activities the regulators will and will not regard as being covered by the ban.”

The letter also criticised the failure to publish changes to the Civil Procedure Rules needed to implement the Jackson reforms in relation to offers to settle and proportionality.

“These concerns are a recipe for chaos,” the Law Society President concluded. “Premature legislation may lead to major damage to personal injury lawyers and to claimants. There is no fiscal urgency to make the reforms quickly and every reason for them to be implemented to a timescale that can be managed by all.”

She said a delay until 1 October 2013 would be more realistic and appropriate.

A copy of the letter was sent to the Master of the Rolls and the chairman of the Solicitors Regulation Authority.

Philip Hoult