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Update August
PII helpline open at Law Society
Law Society takes action over family contract tender
Response to SRA Consultation on new OFR handlbook sent to LSB
Legal Aid
30 July
Civil contract tenders: member update
We now have specific figures from the Legal Services Commission (LSC) confirming the impact of the tendering round. Of 2400 family firms, only 1300 have been allocated a contract. Around 30 per cent of firms bidding for social welfare law categories have been unsuccessful.
The LSC stated in January that: 'it is not our intention that the tender round should significantly reduce the provider base'.
Because this was not the intention, the process was not designed to ensure that contracts were allocated on a rational basis across the procurement areas. This is causing significant damage to the network in many parts of the country.
Moreover, the effect of such a massive reduction in the number of firms is that tens of thousands of clients are likely to be forced to find a new family solicitor all at the same time in October. For these reasons, we believe that it is vital in the public interest that the government should intervene to avoid the unplanned and serious consequences of this decision, which must compromise its forthcoming review of legal aid.
Legal challenge situation
We are still awaiting advice from our external lawyers on the question of possible legal challenges. In the meantime, it is of course open to any firm to seek its own advice based on its own particular circumstances. The Society is keeping the situation under constant review and would be pleased to hear from any firms making such challenges.
27 July 2010
Civil contract tender results: Society seeks urgent review
The long awaited announcement of the family and social welfare contract awards has produced some extremely disturbing results. Evidence emerging from across England and Wales indicates that hundreds of existing family providers have not been offered new contracts. This includes many reputable firms who have provided a valued service in their local communities for a number of years. The level of refusals is on a far higher scale than we envisaged and could leave thousands of clients without representation if firms that no longer have contracts close down their family departments or shut down completely. It will also be more difficult for new clients to obtain advice under legal aid.
The Law Society is urgently seeking legal advice on the social welfare and family law tender results. However, even if there is a viable challenge, it is unlikely to provide a rapid solution to the problem firms are facing, which is why the media and Parliamentary lobbying effort is so important. The initial advice on the other civil contract tenders and results indicates that, based on available information, there is no obvious ground on which a challenge with merit could be made at this stage.
Despite how damaging the outcome has been, it is difficult to pinpoint within the mental health and immigration tenders any breach of procurement law or any decision the Legal Services Commission (LSC) has made that would be so irrational as to meet the judicial review threshold. However, the extent of the reduction in the number of suppliers in family and social welfare, which contrasts vividly with the LSC's stated intention that the supplier base would not be significantly reduced, and risks creating major gaps in the supplier base, may give rise to additional arguments that could be mounted. We are actively keeping the situation under review.
It is however vital that each individual firm appeals any unsuccessful tender outcome, whatever the reason, within the prescribed timescales.
We appreciate many of our members have made successful bids but for the reasons outlined above with the consequent effect on clients, we have written to the legal aid minister Jonathan Djanogly requesting an urgent review of the tender results and their effect on legal aid provision.
We would urge practitioners who have been unsuccessful to raise the issue with their local MPs and media.
23 July 2010
Law Society announces transfer of the Solicitors Indemnity Fund run-off claims handling function
The Law Society has today announced the transfer of the Solicitors Indemnity Fund (SIF) run-off claims handling function from Legal & Professional Claims Ltd (LPClaims) to Vision Underwriting Limited (Vision). Vision is a wholly-owned subsidiary of Liberty Mutual Insurance Europe Limited (LMIE) and a member company of Liberty Mutual Group.
This step secures an economic and viable long term solution for the handling of the run-off of SIF claims, a task which is expected to take another ten years to complete on an ever declining basis. Outsourcing claims handling creates cost efficiencies for the Solicitors Indemnity Fund and for the solicitors’ profession which funds it. Under the arrangements, control of the SIF and its indemnity arrangements will remain firmly within the Law Society Group as at present.
Vision has also today announced its intention to offer solicitors’ professional indemnity insurance. Vision intends to market to firms of up to 5 partners in size, both on a direct basis and through the internet.
The Law Society welcomes the arrival of Vision as bringing new capacity, competition and more choice into this market. Vision will be trading online under the title of Legal and Professional Insurance (www.LPinsure.co.uk).
The current LPClaims staff of eight, including the Chief Executive George Raubenheimer, will transfer to Vision.
Desmond Hudson, Chief Executive of the Law Society said: The Law Society has secured an excellent result for the profession, which secures the viability of the handling of SIF run-off claims at a reasonable cost and at a time when we are working hard to keep to a minimum the overheads on solicitors. I am delighted that we have been able to reach agreement with Vision Underwriting Limited and that I am also able to welcome the arrival of another insurer for solicitors.”
Paul Kurgo, LMIE’s Managing Director Commercial Business UK and Ireland said: “This is an exciting opportunity for Vision as it enters a sector of the solicitors market currently experiencing a growing concern about the availability of a competitive market place. I am also pleased that we have been able to secure a professional and highly experienced claims team that has been recognised for the quality of its management of solicitors claims, developed over many years. We aim to build upon this reputation with firms knowing that their claims are in the right hands”.
George Raubenheimer, CEO LPClaims said: “Solicitor firms of 1 to 5 partners will recognise the value, benefits and stability of combining the very best of SIF claims management with that of a large internationally recognised insurer. The profession will have comfort knowing that the run-off of the remainder of the SIF claims will continue to be dealt with professionally and to the highest standards.”
New president Linda Lee installed at AGM with John Wottton as VP and Lucy Scott Moncrieff as DVP
Outgoing President gives update on ABS - see note in Reports.
Council meeting appoints Joint Board with SRA, approves funding for PC fee and Compensation Fund contribution reduced to £19 giving reduction overall for average firm compared to last year. This year PI renewal will be hard and an innovative scheme to help small firms is on offer through Scomo, a firm run by Lucy Scott-Moncrieff.
Update June
The June Council meetings focused around presentations from the chair of the LSB and a contrasting one from the Commissioner for Legal Services in NSW. The LSB timetable was contrasted with the way in which the market adopted similar reforms in Australia. Latest news suggests that the Scottish profession will permit up to 49% ownership of ABS by non solicitors.
The national Law Society Vice President Linda Lee held a lunch withlocal legal aid practitioners on 26 May and met on 16 June with a number of local practitioners who focused on current PI market concerns and market models for adapting to OFR and ABS. They also contributed to an outline for the presidential plan for next year which will highlight the value of legal services and expertise
Update May
The Legal Services Act 2007 is set to change the landscape for legal services.
The Legal Services Board have set a target date of October 2011 for the start of Alternative Business Structures. This means providers of legal services may be owned by commercial enterprises and offer new services alongside their existing businesses.
The Solicitors Regulation authority are responding with a radical overhaul of regulation and intent to move to outcomes focused regulation enabling them to focus on important risks and acting to prevent problems rather than reacting to them. Their latest consultation called Outcomes-focused regulation - transforming the SRA's regulation of Legal services is at www.sra.org.uk
All comments and responses will be welcome. As your Council Member and chair elect of the Regulatory Affairs Board who will prepare the Society reply to this consultation Michael Garson will be pleased to receive views and comments.
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