Re Bostalls Ltd waiver - letter from the Law Society to the by jay16344


									From the President

Peter J Williamson
Solicitors Regulation Authority Board
8 Dormer Place
Leamington Spa
Warwickshire CV32 5AE

13 November 2007

Dear Peter

Bostalls Ltd – Waiver

As you will be aware, the SRA decided on 8 November 2007 to grant the application of
Bostalls Ltd for a waiver of rules 8.01(h) and 12.01(1)(f) of the Solicitors’ Code of Conduct
2007 so as to permit the participation by solicitors employed by Bostalls Ltd in a Criminal
Defence Service scheme known as CDS Direct. CDS Direct is a telephone advice service
funded by the Legal Services Commission for clients who are eligible for publicly funded
services. Hitherto, the service has operated on the basis that the accredited representatives
and solicitors running the service were seconded to and directly supervised by solicitors
employed by the Commission’s Public Defender Service. The Commission is now intending
to extend the service in a number of ways.

First, the service will cease to be a pilot and will become permanent. Secondly, for certain
categories of offences publicly-funded clients will have no option other than to use CDS Direct
for advice, assistance and representation at the police station. Thirdly, the service will extend
not just to telephone advice, but also to the provision of assistance and representation to
police station detainees in the form of liaising and negotiating with the police. Fourthly,
solicitors involved in the scheme will, in the case of the CDS Direct contract awarded to
Bostalls Ltd, be directly employed by a non-solicitor commercial company.

As you will also be aware, there is considerable concern in the profession at these planned
extensions of the CDS Direct scheme. It is in recognition of that concern that the SRA
afforded the Society the opportunity to make written representations to it in relation to Bostalls
Ltd’s application for a waiver, an opportunity which we utilised.

As Bostalls Ltd is a non-solicitor commercial company, it is unarguable that such a waiver is
needed if it is to participate in the service in the way the Legal Services Commission intends.
The principle that a solicitor may not act for members of the public save through a solicitors’
practice is a long-established one, and is now embodied in Rule 12.01(f) of the new Code of

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Conduct. While Rule 13 contains certain narrow exceptions to this principle, none of them
apply to the proposed participation of Bostalls Ltd in CDS Direct. Rule 13.07 applies to
commercial telephone advice services only. The services provided by CDS Direct will extend
beyond advice. Rule 13.10 replicates the special statutory exemptions afforded to the Legal
Services Commission by the Access to Justice Act 1999. But none of these apply here, as
the proposed CDS Direct arrangements do not involve the direct provision of services by the
Legal Services Commission itself, nor by a body established and maintained by it. Bostalls Ltd
is a pre-existing independent commercial company.

Against that background, I have to say that there is considerable concern within the Society
and the profession over the SRA’s decision. It seems to us that the principle behind Rule
12.01(1)(f) is an extremely important one. It protects solicitors from inappropriate commercial
influences and pressures. It ensures that solicitors can always act independently and in their
clients’ best interests. It embodies one of the core values of an independent legal profession.

While Parliament has now legislated for alternative business structures, this was strictly on the
basis that outside involvement in legal practice requires a special regulatory regime with
appropriate client protections. These include regulatory powers over the non-lawyer entities
providing legal services, as well as over their non-lawyer owners and managers. This is the
entire purpose behind Part 5 of the Legal Services Act 2007. As you will be aware, the ABS
regime is not due to come into force for some while yet.

We cannot see how the fact that CDS Direct is a scheme funded by the Legal Services
Commission really makes a difference here. It is true that the Access to Justice Act 1999
affords the Legal Services Commission considerable scope to utilise different forms of service
provision. But these do not extend to alternative business structures, in the sense in which
they have since become understood to mean, that is to say commercial non-lawyer ownership
and management of businesses providing legal advice, assistance and representation to
members of the public. For, despite any contractual relationship they may have with the Legal
Services Commission, that is what Bostalls Ltd is.

Furthermore, it is difficult to see an area in which a client’s access to independent legal
advice, assistance and representation is more pressing than under the CDS Direct scheme.
The scheme will operate as an integral part of the criminal justice system. It will provide
defence services to members of the public whilst detained against their will by the police at
police stations. In those circumstances, they have a right accorded by Parliament under
Section 58 of the Police and Criminal Evidence Act 1984 to consult with a solicitor privately
and at any time, which is a fundamental civil right. Whilst at present at least the scope of the
scheme will be limited to less serious criminal offences, this does not make the need less
serious for clients whose livelihoods and reputations could depend on their access to proper
legal advice, assistance and representation.

We know that the SRA does not grant waivers lightly. Of their very nature, waivers can only
be granted in exceptional circumstances. Waivers are a mechanism by which an unintended
consequence of a prescriptive rule can be overcome. But, that said, a waiver should not
violate the fundamental principle of client protection underlying the rule of conduct from which
the waiver is being sought. There is clearly a risk with waivers that if they are granted too
easily and too routinely, the fundamental principle will be eroded. As the SRA will no doubt be
aware, there is perhaps no area in which this could be more at risk of happening than with the
restrictions on employed practice. As implementation of the ABS regime begins to approach,
the pressure from commercial interests to establish legal businesses in advance can only

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As regards rules 12.01(1)(f) and 13, SRA waivers guidance therefore requires not only that a
waiver application show some exceptional public benefit why the waiver should be granted,
but also that arrangements will be in place to ensure that there are adequate client protections
which are equal to those afforded in private practice.

In recording the Society’s concern at this decision, I accept, of course, that the Society has not
seen the basis upon which the SRA has made it. All we have seen so far has been the actual
terms of the waiver and not the detailed reasons which led to it.

In this regard, I know that the SRA is committed to transparency and accepts that, as a public
body, it must be accountable for its decisions in the public interest. I wish, therefore, to make
a number of requests to you for information.

First, could you give me the detailed reasons for the SRA’s decision? We would be
particularly interested to consider the SRA’s assessment of the exceptional public benefit that
will be derived from the grant of this waiver and its assessment of the ways in which client
protections will be maintained under the CDS Direct scheme.

Secondly, we have been informed by the SRA that, following long-standing practice, its Rules
and Ethics Committee gave a policy steer in relation to the waiver application. Could we see
the terms of that committee decision?

Thirdly, could you indicate to me whether the SRA has undertaken any special monitoring of
the adequacy and effectiveness of the supervision arrangements that have in fact operated in
the CDS Direct pilot scheme that has been operating for the last two years or so?

Fourthly, could you indicate to me whether the SRA has any plans specially to monitor the
adequacy and effectiveness of the supervision arrangements that will operate in that part of
the CDS Direct scheme that will be run by Bostalls Ltd?

Fifthly, could you indicate to me what steps the SRA will be taking to monitor Bostalls’
compliance with the twelve conditions which have been attached to the waiver?

Sixthly, we have received a letter dated 8 November 2007 from the Head of Direct Services
Programme at the Legal Services Commission in which he refers to the ‘legal action likely
between Bostalls and the SRA’. Could you confirm whether or not either the Legal Services
Commission or Bostalls Ltd actually threatened the SRA will legal action over the waiver

Finally, the level of concern about this decision is such that I feel I must ask the SRA to
consider suspending the operation of the waiver until such time as those concerns can be
properly addressed.

With kind regards.

Yours sincerely

Andrew Holroyd OBE

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