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         Services of Solicitors
             in Scotland

                 A Report on the Supply of
       Services of Solicitors in Scotland in Relation
               to Restrictions on Advertising

            Presented to Parliament in pursuance of
            Section 83 of the Fair Trading Act 1973

        Ordered by The House of Commons to be printed
                       28th July, 1976

                       £1.15 net
ISBN 0 10 255876 0
       Members of the Monopolies and Mergers Commission

J G Le Quesne Esq QC (Chairman)
Sir Alexander Johnston GCB, KBE1 (Deputy Chairman)
E L Richards CBE, MC, TD2 (Deputy Chairman)
G F Ashford Esq QBE
R G Aspray Esq
Professor T Barna CBE
Sir Dallas Bernard Bt, Fcis2
Lady Bowden
Sir Max Brown KCB, CMC1
J S Copp Esq
Sir Roger Falk QBE
John Gratwick Esq1
Laura Margaret, Lady Hall2
Dr Francis Edgar Jones MBE, FRS2
T P Lyons Esq
Mrs Caroline M Miles
R G Opie Esq CBE
C T H Plant Esq QBE
Lewis Robertson Esq CBE1
S A Robinson Esq
J S Sadler Esq
Miss Rita Stephen MBE
Professor Harry Street2
Professor B S Yamey CBE2
            Miss Y Lovat Williams (Secretary)

  Wote by the Department of Prices and Consumer Protection: Sir Alexander Johnston
completed his term of appointment on 30 April 1976 and Sir Max Brown succeeded
him as Deputy Chairman on 1 May 1976. Mr J Gratwick and Mr L Robertson have
ceased to be members of the Commission, and Mr C J M Hardie has been appointed a
member since the report was signed.
   These members formed the group which was responsible for this report (see
paragraph 2).

Chapter                                                                     Page
          Introduction       ...                                              1
   1      The Law Society of Scotland; solicitors in Scotland ...     ...     4
   2      Current restrictions on advertising; collective advertising ...     8
   3      The views of interested parties                                    13
   4      The views of the Council of the Law Society of Scotland ...        17
   5      Conclusions                                 ...   ...   ...        25

   1       Rules of the legal profession in other countries    ...    ...      i
   2      List of bodies and individuals who provided us with views and
          information                                         ...    ...      Iv
                          List of abbreviations

Abbreviations and short titles used in the report and appendices are given


CAB                       Citizens' Advice Bureau

CABx                       Citizens' Advice Bureaux

NACAB                     The National Association of Citizens' Advice

The Scottish LAG           The Scottish Legal Action Group

Short titles

The Council                The Council of the Law Society of Scotland

Our 1970 general report   The Monopolies Commission: A report on the
                          general effect on the public interest of certain
                          restrictive practices so far as they prevail in rela-
                          tion to the supply of professional services.
                          (Cmnd. 4463 of October 1970.)

The Society                The Law Society of Scotland.
   1. On 24 July 1974 the Director General of Fair Trading sent the following
reference to the Commission:

  Fair Trading Act 1973
  Monopoly references
  Solicitors' services and their advertisement

  The Director General of Fair Trading, in exercise of his powers under
  sections 47(1) and (2), 49(1) and 50(1) of the Fair Trading Act 1973 (here-
  after called 'the Act'), hereby refers to the Monopolies and Mergers Com-
  mission the supply of services of solicitors in Scotland.

  The Commission shall investigate and report on the questions whether a
  monopoly situation exists in relation to such supply and, if so:

  (a) in favour of what person or persons that monopoly situation exists;
   (b) whether any steps (by way of uncompetitive practices or otherwise) are
       being taken by that person or those persons for the purpose of exploiting
       or maintaining the monopoly situation and, if so, by what uncom-
       petitive practice or in what other way;
   (c) whether any action or omission on the part of that person or those
       persons is attributable to the existence of the monopoly situation and,
       if so, what action or omission and in what way it is so attributable; and
   (d) whether any facts found by the Commission in pursuance of their
       investigations operate, or may be expected to operate, against the public

  The Commission shall, for the purpose of this reference, limit consideration
  to agreements and practices relating to the advertising by solicitors of their
  professional services, whereby they conduct .their affairs as mentioned in
  section 7(2) of the Act.

  The Commission shall report on this reference within 18 months from the
  date hereof.

  Director General of Fair Trading
  Dated this 24th day of July 1974

   2. The then Chairman of the Commission acting under Part II of Schedule 3
of the Fair Trading Act 1973 directed that the functions of the Commission in
relation to the investigations under the reference should be discharged through
a group consisting of six members of the Commission, with Mr E L Richards as
Chairman. The names of the members who formed the group are indicated in
the list of members which prefaces this report.
   3. We received certain submissions in writing from the Council of the Law
Society of Scotland, the governing body of those supplying the services falling
within the reference, and its representatives attended two meetings in Edinburgh
for the purpose of discussing these matters with us.

   4. We also invited evidence from bodies and individuals who we considered
 might be interested in the supply of these services. We received a number of
 submissions and we took oral evidence from the National Association of
 Citizens' Advice Bureaux. We invited the Council to make suggestions for
"bodies from whom we might seek evidence; no such suggestions were received.

   5. We informed the Council on 13 March 1975 of our provisional conclusion
that a monopoly situation, as defined in section 7 of the Fair Trading Act
1973, existed in favour of solicitors in Scotland in that the total supply of the
services covered by the reference was by persons who so conduct their affairs
as to restrict competition in that all solicitors in Scotland accept the restrictions
on advertising as laid down by the Council of the Law Society of Scotland.
The nature of the restrictions is described in paragraphs 28 and 29. In accord-
ance with our usual practice we asked the Council for comments on:

   (a) a detailed statement of actions and arrangements of solicitors in Scotland
       with respect to advertising restrictions relevant to questions affecting
    . the public interest;
   (b) a statement of issues, which, in the view of the Commission, arose out of
       those actions and arrangements which might be relevant to questions
       affecting the public interest;
   (c) a summary of the complaints and criticisms relating to the advertising
       restrictions which the Commission would be considering.

   6. For the purposes of this inquiry we have treated the term 'advertising
restrictions' in the same way as in paragraph 215 of our 1970 general report.
We regard it as covering practices which are restrictive of (i) advertising and
promotion in the commercial sense (ii) canvassing (or 'touting') and forms of
self advertisement that might attract business (iii) the dissemination of informa-
tion about professional business. We explained to the Council that it was our
intention to use this interpretation. We use the term 'collective advertising' to
mean advertising undertaken by a professional body on behalf of the profession
as a whole; it is thus synonymous with the terms 'corporate advertising' or
'institutional advertising' used by some of our witnesses. We use the term
'-individual advertising' to mean advertising by an individual member of a
profession or by a firm. The distinction between collective and individual
advertising sometimes seems to be regarded as equivalent to the distinction
between informative and promotional advertising. This is not so. Collective
advertising can be promotional and vice-versa. Indeed, on one view, it is
virtually impossible to give information without some overtones of persuasion.
   7. Curiously enough there is no authoritative or generally accepted definition
of 'touting' in the context of this reference. The term seems however to be used
in the sense of canvassing of business by personal contact, with at least a
nuance of 'unfair' attraction of such business. An example of the current use
is that a solicitor is not 'touting' if he writes to his existing clients informing
them of a change in legislation which may affect them and on which they may
need legal advice. If, however, he were so to write to others, including the
clients of other solicitors, he would be 'touting'.

   8. We use the term solicitors to mean both individual solicitors and firms
of solicitors, unless the context requires otherwise.

   9. We wish to record our appreciation of the assistance given to us by the
Law Society of Scotland and by others who have provided us with views and
information, a list of whom is at Appendix 2.
                                  CHAPTER 1

         The Law Society of Scotland; solicitors in Scotland

The Society; numbers of, and services supplied by, solicitors in Scotland

  10. The Society was established on 1 November 1949 by the Legal Aid
and Solicitors (Scotland) Act 1949, and the Society's constitution has effect
as if enacted in,that Act. The Society is the professional association and the
governing body of the solicitors' branch of the legal profession in Scotland;
membership is compulsory. At 31 October 1975 there were 4,262 members
of whom 3,661 held practising certificates. Of these 2,600 were in private
practice as principals and 400 as qualified assistants with professional firms.

   11. Solicitors are general practitioners in the law and offer a wide range of
services. Their practice includes general family business; commercial business
and agricultural business; conveyancing in connection with the purchase and
sale of estates, farms and houses, and commercial and industrial heritable (real)
properties of all kinds; the preparation of leases, loan agreements and
mortgages; the administration of Trusts (there is no Public Trustee hi Scotland);
the preparation of wills and the administration of estates of deceased persons;
and assisting the settlement of matrimonial disagreements. Their practice in-
cludes such matters as company and commercial law and tax business, or
specialised matters such as banking, bankruptcy and liquidation (there is no
Official Receiver in Scotland). Their practice also includes services in con-
nection with litigation, civil and criminal, including advocacy in those courts
where solicitors have a right of audience, namely all the courts of Scotland
except the Court of Session (where they have a right of audience only in respect
of business dealt with at vacation courts) and the High Court of Justiciary.
They appear frequently in important litigations, criminal and civil.

   12. The solicitor in Scotland also often acts as a general man of business.
The following are examples. Work in connection with buying and selling
houses and other types of heritable (real) property, normally done in England
by estate agents, is habitually carried out in Scotland by solicitors. A number
of Scottish solicitors carry on the administration (factoring) of landed estates
and farms; this work in England would handled by land agents
or accountants. A number carry out the function of advising on investment and
insurance matters.

   13. The Society controls admissions to the Roll of Solicitors in Scotland
and issues practising certificates annually. It formulates and enforces rules for
regulating the professional practice and conduct of solicitors. In general terms
a solicitor in Scotland has two statutory monopolies. First, only a qualified
solicitor holding a practising certificate may appear and plead in those courts
where he has the right of audience or may practise in the Court of Session,
excluding only the rights of party litigants and all members of the Faculty of
Advocates (the Solicitors' (Scotland) Act 1933 section 20 and the Solicitors'
(Scotland) Act 1949 section 19). Secondly, solicitors in Scotland have a
statutory monopoly relating to the preparation of those writs and other matters
specified in section 39 of the Act of 1933 excluding the rights therein of
members of the Faculty of Advocates.

Membership and composition of the Council
   14. The Council consists of 40 members directly elected from 13 geographical
constituencies together with a maximum of 7 co-opted members; all members
of the Council are solicitors. There are at present 6 co-opted members of the
Council; these members are appointed for one year but are eligible for
re-election and are normally re-elected. The elected members serve for three
years and are eligible for re-election. The Council elects a President and Vice-
President annually. Under section 20 of the Legal Aid and Solicitors (Scotland)
Act 1949 the Council may make rules for regulating the professional practice,
conduct and discipline of solicitors. Any such rules require the approval of
the Lord President of the Court of Session. Failure to comply with such rules
may be treated as professional misconduct.

Rules of the Society
  15. Rules relating, inter alia, to advertising were made by the Council in
1964 and 1969 (see paragraph 28).

Committees concerned with advertising
   16. The Council maintains two standing committees which have the primary
responsibility for evolving policy in this field.

The Professional Practice Committee
   17. This Committee has the responsibility of advising the Council as to
general standards of professional behaviour and ethics and, on its policies
being approved by the Council, of putting them into practice in dealing with
individual enquiries or complaints. One of the Committee's duties relates to the
application of the existing statutory Practice Rules and the Society's general
policy restricting promotional advertising. The Committee also has the function
of dealing with complaints which arise, either at the instance of members of the
public or between individual solicitors, as to practices which are adopted or
devised by an individual solicitor or firm of solicitors.
The Public Relations Committee
   18. This Committee has responsibility for advising the Council in arriving
at policy in order to maintain and improve communication:
     (i) between the Society (and therefore the profession) and the public at
    (ii) between the Council and individual members of the Society; and
   (iii) between the solicitor and his client.
   19. In general the Public Relations Committee concerns itself with improving
the flow of information. So far as the profession and the public are concerned
it accepts the need for informative publicity about the range of services offered
by the profession. It devises and promotes ways and means whereby such
publicity can be undertaken on a collective basis.
  20. So far as the Council and the members of the Society are concerned, the
Committee maintains a continuing interest in receiving the views of the
profession in every field of professional interest. Conversely the Committee
conveys to members of the profession information about matters currently
being discussed or determined by the Council which are likely to affect their
professional lives so as to stimulate reaction, favourable or otherwise.

   21. So far as the individual solicitor and his client are concerned, the
Committee recognises that some basic understanding of what a solicitor can
do and is actually doing is, for both client and solicitor, of the greatest
importance in establishing and maintaining mutual trust. It therefore seeks
to devise and promote ways and means whereby, in its view, a reasonable flow
of information to the client can be maintained.
  22. The Council also maintains four other committees, some part of whose
activities relates or may relate to advertising.
    (i) The Legal Aid Committee
         This standing committee recommends policy on advertising the Legal
        Aid Scheme.
   (ii) The Committee on Purchase and Sale of Heritage
        This ad hoc committee has responsibility for recommending to the
         Council the policy to be adopted by solicitors in advertising heritable
        property for sale in Scotland on behalf of clients.
  (iii) The Committee on the Future of the Profession
         This ad hoc committee is charged with the duty of considering the
         future pattern and development of the profession, its relations with
         other professions, its ability to adapt to modern business methods and
         machinery and its capacity to meet changes in the needs of the
  (iv) The Committee on Law Centres
         This ad hoc committee was constituted to advise the Council on the
         policy to be adopted with regard to legal advice centres and law
  23. Most of the above mentioned committees of the Council largely consist
of members of the Council itself with occasional co-options of non-Council
members. The Committee on the Future of the Profession, however, consists to
a material extent of co-opted non-Council members.
  24. The committees vary in size from 12 to 18 members and are appointed
annually. The standing committees meet not less than once a month and are
each serviced by a small full-time department presided over by a Deputy or
Assistant Secretary to the Society.

   25. The committees' recommendations are contained in printed Minutes
which are circulated to the entire Council and require its approval, usually at
the immediately succeeding monthly Council meeting. A summary of principal
recommendations is printed and distributed to all members of the Society
with the Society's monthly Journal.    '
  26. The fundamental principal observed by all these committees is that
there is a distinction to be drawn between conveying essential information to the
public about the profession of solicitors as a whole on the one hand and
promoting the business of a particular firm of solicitors or an individual
solicitor on the other.

How the Council obtains the views of the profession
   27. As mentioned above, the Council's Public Relations Committee has the
responsibility of promoting communications between the Council and individual
members of the Society. In this it reflects the importance which the Council
attaches to sounding out the profession at large on matters of policy. The
Council told us that this is achieved in a number of ways. These include the
f ollowing:
   (i) Four years ago the Council decided to hold its Annual General Meeting
       in a conference setting. More time was made available for discussion
       of matters of general interest at the formal General Meeting and
       provision was made for simultaneous seminars on subjects of more
       specialised concern.
   (ii) Individual local faculties or societies of solicitors have been encouraged
        to submit resolutions, motions and topics for consideration at the
        Conference and Standing Orders have been revised and re-revised to take
        account of the response to this approach.
  (iii) The Council has also recently completely redesigned and expanded its
        monthly Journal. It frequently contains controversial views in contribu-
        tions and correspondence in addition to more traditional articles and
        general information.
  (iv) The views of individual members are frequently solicited by the Council
       by direct communication through the Society's secretariat on specific
       matters of importance, through the agency of local societies and
       faculties or, more informally, by individual Council members in their
       respective constituencies.
   (v) The secretariat in addition requires to deal increasingly with correspon-
       dence from individual solicitors. This correspondence includes the
       expression of comments and opinions not only on the activities of the
       Law Society in particular but also in relation to legal practice in general.
       The secretariat in addition receives a substantial volume of enquiries
       from solicitors mainly about administrative matters. This correspondence
       is referred to the appropriate committee for attention.
  (vi) The Council has promoted in recent years a series of study weekends
       and seminars devoted to general or specialised aspects of law and
       professional practice at which the views of members attending are sought
       and often forcibly given. Although it is not their primary purpose, these
       seminars furnish most valuable intelligence to the Council on a great
       variety of topics.

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