Brexit Legal Challenge to get High Court Hearing

A legal challenge to the UK’s planned exit from the European Union is to be heard in the High Court. A decision from two judges will see the challenge heard by the High Court over at least two days, which will take place in October.

Since June’s referendum ended with the public narrowly voting in favour of “Brexit,” a number of legal challenges to the UK’s planned exit have been launched. In particular, legal actions against the Brexit process aim to ensure that the Prime Minister does not trigger Article 50 of the Lisbon Treaty – the legal mechanism for a nation’s exit from the EU – without obtaining authorisation from parliament. Doing so, a number of legal industry figures have argued, would mean overstepping the bounds of the Prime Minister’s power.

Leaving the EU, lawyers and legal experts say, would involve overturning UK legislation, and this is something that only parliament and not the Prime Minister has the power to do under UK law. For this reason, challengers argue that the Prime Minister must first obtain parliamentary authorisation before triggering Article 50 and beginning the process of withdrawal from the Union.

It is expected that the legal team representing the government will argue otherwise, suggesting that historic powers of Royal Prerogative entitle the Prime Minister to start the process of withdrawing from the EU without parliament. However, the challengers maintain that triggering Brexit in this way would be unlawful, and that parliament’s consent must still be obtained before going ahead.

While EU leaders have said that if the UK is to leave the union it should do so as quickly as possible, Theresa May has stated that she does not intend to invoke Article 50 before the end of this year. This means that a hearing date in October for the legal challenge should allow time for the matter to be resolved before the process of withdrawal is actually expected to begin.

David Davis, Brexit Secretary, favours a faster timeline. Davis, who took on the role recently after Theresa May became leader of the Conservative Party and restructured the cabinet, has expressed the opinion that the process of leaving the EU should begin “before or by the start of next year.”

Legal challenges have come from a number of quarters. These include legal firms, and a campaign group called Fair Deal for Expats which is made up of British nationals who currently reside in France. The lead case for the High Court hearing, judges decided, should be that of London-based investment manager and philanthropist Gina Miller, a client of legal firm Mishcon de Reya.

MPs Warn of Strain on Criminal Justice System

MPs from the Public Accounts Committee have warned that the UK’s criminal justice system is facing severe strain. The warning came in a newly-published report, in which the committee also criticised the Ministry of Justice for being “too slow” to acknowledge and respond to the situation.

The report expressed reservations about the amount of pressure currently placed on the criminal justice system. In particular it pointed to a drop in Crown Prosecution Service (CPS) lawyers, whose numbers have fallen by 27% since March 2010. The MPs of the committee say that this has created a situation where the CPS “struggles to find counsel to prosecute cases, as the criminal bar has reduced in size.”

A reduction in government spending on criminal justice is also highlighted in the report. Since the 2010-2011 financial year, the amount of government money spent on the criminal justice system by the government has fallen by over a quarter (26%), the report says. This has, the committee claims, “exhausted the scope to cut costs without pushing the system beyond breaking point.”

On top of this, the committee says, the Ministry of Justice has been “too slow to recognise where the system is under stress, and to take action to deal with it.” The report points especially to a rapid rise in “the number of longer, more complex cases, including historical sex abuse.” This occurred at a time following cuts to resources and the number of sitting days, leading to a significant backlog. The ministry failed, the report says, to respond to the situation and implement measures to tackle the backlog in good time.

The Ministry of Justice has since committed to an increase in the number of sitting days in order to deal with such backlogs in the Crown courts. The report said that this move was a welcome one, but nonetheless called it “belated.”

The report also criticised the way spending has been handled by HM Courts and Tribunals Service (HMCTS). In particular, the report was critical of – and expressed surprise at – “limited resources” have continued to be spent by HMCTS on closing courts. Examples highlighted by the committee include £100,000 recently spent on new windows for the soon-to-be-closed Torquay Magistrates’ Court. Furthermore, the report accused HMCTS of not yet having “a credible plan for securing value for money from its estate.”

A Ministry of Justice Spokesperson said that the ministry would “reflect” on the content of the report. This spokesperson then went on to say: “The justice secretary has been clear that our criminal justice system needs urgent reform. That is why we have embarked on comprehensive measures to improve our prisons and courts, backed by over £2bn of investment, to build a swifter, more certain justice system.”

Concerns Over Treatment of Abuse Victims in Family Courts

A new report from national women’s charity Women’s Aid has criticised the experience that survivors of abuse receive in the family court system. In their report Nineteen Child Homicides, which contains the findings of a study by the charity on child deaths in the UK, Women’s Aid said that the way in which those who have been abused are questioned in court can be traumatic.

The report examines 19 cases in which a child was killed. More specifically, the cases used in the study were all examples where a parent with a track record of domestic abuse had gone on to kill their child. It follows and expands on a previous report by the charity which was published in 2004, Twenty-nine Child Homicides, which looked at the killings of another 29 children

The cases studied in the original report all took place during the ten year period between 1994 and 2004, and the 29 children involved came from 13 separate families. The new report looked at cases that took place over the following ten years, from 2005 to 2015. According to the new report, the 19 cases examined “demonstrate failings that need to be addressed to ensure that the family courts, Child and Family Courts Advisory and Support Service (Cafcass), children’s social work and other bodies actively minimise the possibility of further harm to women and children.”

One of the key problems raised in the report is the way that women who have survived abuse must then face their abusers in the courtroom, specifically in light of the significant cuts to legal aid. The cuts have left many people unable to access financial assistance when going to court, and have led to a significant rise in the number of people appearing as litigants in person, representing themselves as they are unable to afford professional legal representation.

In abuse cases, this means that both victims and perpetrators are commonly representing themselves. As a result, survivors of domestic abuse are often forced to face their abusers directly in court, being cross-examined personally by the perpetrator as well as having to cross-examine the perpetrator personally. This situation, the report said, “leaves women in a very vulnerable position where they may not be able to have access to a fair hearing.”

Furthermore, Polly Neate, chief executive of Women’s Aid, criticised a “misguided belief” prevalent within the family court system that once an abusive relationship comes to an end, this automatically means the abuse has come to an end as well.

Contrary to this belief, Neate said: “Survivors frequently report to us that they and their children are re-victimised by their abusers, even after separation, through the family court process.

“This trauma makes it extremely difficult for the non-abusive parent to advocate clearly and effectively for the safety of their child.”

Senior Judge Makes Controversial Gender Comments

Lord SumptionLord Jonathan Sumption, a judge in the Supreme Court, has attracted controversy from a number of legal professionals for comments made about gender. Speaking to the London Evening Standard, Lord Sumption made a number of comments while discussing the issue of gender equality that have been seen as disrespectful to women in the legal profession as well as poorly-judged.

Lord Sumption was discussing the matter of gender equality in the UK’s senior judiciary. Perhaps his most significant comment, which was not the source of controversy, was a prediction that it could take fifty years for equality to be achieved in this section of the UK legal system. He also described the lack of diversity among senior judges in the UK as a “significant problem.”

Nonetheless, Lord Sumption encouraged a patient view and a cautious approach in the shorter term. “It has to happen naturally,” Lord Sumption said. “It will happen naturally. But in the history of a society like ours, 50 years is a very short time.”

Lord Sumption, who became one of the twelve judges of the Supreme Court in 2012, then went on to make several comments about women in legal careers that have attracted criticism from much of the legal profession. Regarding the speed with which the UK’s senior judiciary may move towards equality of gender, he advocated actively taking things slowly as he felt “We have got to be very careful not to do things at a speed which will make male candidates feel that the cards are stacked against them.”

Lord Sumption also said that “There are more women than men who are not prepared to put up with” the demands of a career in the law as a barrister or solicitor, which he said was “incredibly demanding in the hours of work.”

A number of Solicitors voiced their criticisms of these comments. Speaking through social media, Blackstone Chambers barrister Dinah Rose QC said: “The assertion that women don’t make it to the top because of lifestyle choices is a gross distortion.” She also questioned whether Lord Sumption had the expertise to analyse this situation – one that falls within the realms of social science and history – and said that he “knows nothing about the lives of women at the Bar.”

Barrister at 9 Bedford Row Max Harding also voiced his criticisms, specifically of Lord Sumption’s opinion that the legal industry should move slowly with equality for women to avoid upsetting men. He said that the legal system of the UK “was made by men for men & has discriminated positively in their favour for centuries. If I was a woman I wouldn’t wait a day.”

A Supreme Court Spokesperson, however, insists that Lord Sumption’s comments have been misunderstood. The spokesperson said that if his quotes are looked at in full, it becomes clear that Lord Sumption is in favour of equality but believes that the barriers to achieving this are complex, and that “The concern he expressed was against introducing any form of positive discrimination to the judicial appointments system without careful analysis of the full range of potential consequences.”

September 23, 2015Permalink Leave a comment

Separate Business Rule Changes Approved

The Legal Services Board (LSB) has said that recent changes to the separate business rule – specifically a relaxation of this rule – is going to “increase consumer choice.” The proposed changes have now been confirmed by the regulator.

The relaxation of the rule means that law firms and solicitors are now allowed to own and manage other businesses outside the legal profession. The application to relax the rule came from the Solicitors Regulation Authority (SRA), and has now been granted by the LSB which believes it to be compatible with its efforts to reduce the unnecessary barriers that regulation carries.

Previously, firms authorised by the SRA were subject to strict limitations on the links they could have with other, separate businesses carrying out non-reserved legal activities. Now, however, this restrictions have been largely removed, and such firms can actively manage or maintain ownership of such businesses.

The SRA has expressed a desire to create a more favourable and less restricted operating environment for the business that fall within its remit following the introduction of Alternative Business Structures (ABS) and other, similar measures. These have allowed other professional practices to take a multi-disciplinary approach and move into areas traditionally handled by law firms. The relaxation of the separate business rule could allow legal practices more freedom to branch out into other, complementary areas of practice and therefore help them to remain competitive and offer more comprehensive and varied service packages to their clients.

The proposals were not universally well-received in the legal profession, however. The Law Society was a prominent source of opposition to the idea of relaxing this rule, along with the Junior Lawyers Division. These groups have argued that this could lead to an unregulated market within the legal services industry, bringing down standards and potentially harming the reputation of the legal profession.

The LSB admitted that there were indeed “some risks” attached to these changes that consumers would face. As an example, it suggested that by using separate businesses consumers might lose the protection that comes with having a right to turn to the Legal Ombudsman for recourse in case of disputes. Nonetheless, the SRA maintained that these risks had been mitigated, and that the situation would be fully assessed within the next two years.

The Board stated that it believed there were also “risks to consumers in not seeking to reform the current requirements, through maintaining rules that have the potential to stifle competition, innovation and choice.”

Though the rules have been relaxed, they have not been abandoned altogether. Separate businesses are restricted from reserved activities as well as from immigration work, and must not be presented as coming under SRA regulation. Furthermore, only clients who have consented may be introduced to these businesses.

Queen’s Speech Announces New Laws

Queens Speech 2015The Queen’s Speech, a major part of the State Opening of Parliament for the new government following the general election earlier this month, was given earlier today. In it, the Queen set out the plans of the new conservative government, which included a number of legal matters. Several new laws will be introduced and areas of existing law are set for reform.

Many of these are aimed at tackling threats or social problems with which the UK is currently perceived to be struggling. For instance, new legislation will be introduced to deal with legal highs – substances which are legal and are not intended for human consumption of any kind but which can be smoked, inhaled or otherwise ingested to produce a drug-like effect. These substances will, under new laws, be subject to a blanket ban across the UK.

A new counter-extremism bill is also planned. This will be designed to tackle the threat of radicalisation through a number of measures such as new rules about immigration and the power to close down premises which are being used as venues for extremism. It is also expected that the bill will likely introduce banning orders to target extremist organisations which do not qualify as terror groups but which do publicly make use of hate speech. Furthermore, “extremism disruption orders” have been proposed which would function in a similar way to anti-social behavioural orders (ASBOs).

However, from a legal viewpoint the most contentious issue surrounding the new government is the proposed scrapping of the Human Rights Act. In its place, the government plans to introduce a document which has been described as “a British Bill of Rights.” This proposal, which is led by new justice secretary Michael Gove, has come under fire from various quarters and for a number of reasons. Many parties have questioned whether there is any point in scrapping the act when the British Bill of Rights replacing it would be designed to serve a similar purpose, and whether the nascent new legislation could be as well-formed as the comparatively longstanding Human Rights Act. The government claims that the goal is to limit abuse of the Human Rights Act, though some members of the Conservative Party have criticised this reasoning.

At present, it is a consultation on this matter rather than any new legislation which is expected to take place in the near future. The Queen’s Speech confirmed, as some had already guessed, that the proposals have been placed on hold until consultations can be more thoroughly carried out.

Lawyers enlisted to aid AML efforts in fight against organised crime

In any society, organised crime is a serious problem, comes in various guises, and has a vast array of social and economic impacts.

The National Crime Agency (NCA: the successor to the Serious Organised Crime Agency since 2013) recently estimated that organised crime costs the UK economy around £24bn a year. Economics aside, serious and organised crime is a cancer causes great damage to communities and families, and has a long list of victims. For example, drug addicts commit burglaries and muggings to fund their addiction. The sexual exploitation of children often leaves long-term psychological scarring. Not only does serious (often violent) criminal activity act as a deterrent for legitimate businesses, but financial fraud compromises the stability of one of the financial markets and institutions. Further, the ever increasing and potentially biggest threat of all, cybercrime, undermines public confidence in communication and online technologies, and the ever-expanding online economy. Recent Home Office information estimates that there are in excess of 30,000 criminals, in over 5, 000 gangs operating in the UK. Such organised crime gangs are flexible and entrepreneurial, always adapting their activities to stay one step ahead of law enforcement, and exploiting new methods of crime as old avenues are shut down.

In efforts to tackle such organised crime, the NCA has great, sweeping powers and 4,500 officers domestically and abroad. The Agency also works very closely with British intelligence, other government agencies, and local police. The NCA has to date made several (some high profile) arrests, and confiscated many millions of pounds of criminals’ assets. However, the NCA, in calling for ‘constant vigilance’, and in fiercely tackling such organised crime, has realised the limitations of its resources in some areas. As such, 2015 sees both the NCA and other law enforcement agencies are considering enlisting help from an unusual source- lawyers.

Firstly, the proceeds of such serious and organised crimes need to be laundered, and made legitimate, so as to avoid attracting the unwanted attention of law enforcement. In this regard, solicitors can often be unwitting or negligent accomplices as they arrange financial transactions, transfer ‘dirty’ money through client accounts, and deal with legal matters relating to seemingly legitimate companies (through which ‘dirty money can be laundered). According to NCA economic crime command Deputy Director Nigel Kirby ‘this is not just about legal professionals – it’s about the financial industry as a whole. Bankers, accountants, company formation agents and so forth.’ Regarding lawyers and complicity in organised crime Mr Kirby further stated in recent discussions that there are ‘the negligent and the careless [lawyers], who probably really don’t care, turn a blind eye and are probably committing criminal offences under POCA [the Proceeds of Crime Act] and also some regulatory offences. And then there are the unwitting, who aren’t aware of what’s happening.’

This view is shared by the legal regulatory bodies, with all such parties acknowledging the need for attention to good due diligence and proper checks at law firms to prevent such accidental complicity in money laundering. Proper processes need to be established in law firms to tackle such practices. Quoting from Kingsley Napley’s crime and regulatory partner Michael Caplan QC, ‘it is a question of having systems in place… of being aware and ever-vigilant… The reality is that if a solicitor’s office wants to be 100% secure, it’s got to lock itself down and do no business – and that’s very difficult.’

Currently, the Law Society has an anti money laundering (AML) taskforce. Further many law firms (particularly large, national or international firms) have a dedicated department in this regard, and efficient systems checking for AML activities. However, although necessary, such emphasis on extra vigilance and due diligence can be time consuming and costly for small firms and sole practitioners. As such, a balance must be found. Above all, efforts for deep and effective due diligence in transactions and legal matters must be reasonable.

There are also those lawyers who are actively complicit in organised crime. According to Mr Kirby, those complicit ‘can certainly expect the NCA to be targeting them…. We are interested in pursuing those that are complicit at the top end, that we have serious criminal charges to bring against.’ The Deputy Director has further called for strengthened information sharing between the Law Society and the NCA. As regards such information, as organised crime evolves, and organised crime sees new opportunities of crime, it is for law enforcement to keep the legal profession updated as to current methods of organised crime. Further to that Scott Devine, the Law Society’s AML policy adviser, has said previously that the Law Society’s AML role is primarily education and training, and that there are ‘many sources of advice open to the profession… the NCA in the middle of last year commented that the legal profession has more information available to its members that any other. On an international level, we’ve collaborated with other law societies around the world and last year produced a report looking into the vulnerabilities. We worked with the American Bar Association, the International Bar Association and the Council of Bars and Law Societies of Europe, coming up with a report looking across the whole globe. It helps lawyers understand the red flags and what to do once they have recognised them. The role of education cannot be understated here.’

Whilst cooperation between the legal sector and law enforcement is of mutual benefit in tackling organised crime, there are limits to what assistance the legal sector can actually give, that is due to legal professional privilege. Information as regards illegal activity, whether direct or indirect, complicit or not, needs to be made available to the NCA- but in a way that does not breach legal professional privilege.

Discussion, cooperation and dialogue between law enforcement and the legal sector are on-going. What is clear is that in the fight against organised crime, lawyers can be of great assistance- more than they realise. It is getting a two way flow of information, and in establishing a balance in certain regards that is proving to be problematical in implementation. However, the will is there- the will of the legal profession to actively uphold the law that they learn in law school with due regards for the ethics, duties and constraints that their role as legal professionals imposes upon them.

February 13, 2015Permalink Leave a comment

MoJ’s New Duty Police Solicitor Scheme in Court (Again)

The government is seeking to change the terms for police duty solicitors. However, both the new proposals and the tender process itself are greatly troubled.

July this year saw the Ministry of Justice (MoJ) defer the process of law firms tendering for new police station duty provider legal aid contracts. After initially intending to start the tendering process at that time, the announcement came after the then Law Society President Nicholas Fluck wrote to Lord Chancellor Chris Grayling MP advising him that such a deferral was in the best interests of the new contracts. According to Mr. Fluck, the planned start of the tendering process in July did not give firms enough time to adequately prepare and submit bids.

As a result, late July saw the MoJ release draft contract terms and specifications, along with a summary of the changes in the new contracts. Further, under the revised timeframe, the formal tender process will now begin in October instead ‘in order to give bidders sufficient opportunity to absorb this information.’

Amidst the changes from the old 2010 police duty solicitor contracts, and the new 2015 contracts, the new arrangements introduced a system of two contracts; one contract for own client work (available to all qualifying  law firms), and another one for duty contracts, only available to a limited number of firms. In order to bid for duty solicitor contracts, law firms need to have an existing own client contract; the tender process for own client contracts ended in May.

The new system is expected to commence on 1st July 2015. In announcing the revised tender process timetable, a MoJ spokeswoman stated that “we will also be providing market engagement opportunities to support firms in preparing for new contracts during August. In September we will publish a further round of tender information to help bidder preparations… We have always been clear that we will do everything we can to support the transition to the new arrangements and to provide bidders as much time as possible to prepare.” At the time, the MoJ had also insisted that, although verbal guidance had been issued that the tender process for new police station contracts would open in the summer of 2014, there had been no fixed date.

The new duty solicitor contracts have attracted great criticism from the Law Society and related legal oversight bodies. As such the postponement was welcomed- even though the eventual introduction of the new contracts are not. The Law Society still has unresolved reservations and issues arising from the details of the new contracts, the main one being the proposed two contract ‘dual contracting model.’ Further, the new model would see a reduction to 525 of such police contracts. That is less than half of the current number. With reduced contracts available, many firms fear that they will lose out in the tender process. Not only will this affect their companies, and the earnings of individual lawyers, but many fear a reduced access to legal representation for those in custody.

Indeed, the tender process itself has drawn more criticism. Late December saw the Law Society file for a judicial review of the tender process. A previous judicial review application by the London Criminal Courts Solicitors’ Association (LCCSA) and the Criminal Law Solicitors’ Association had been heard earlier in the year. Burnett J had upheld the LCCSA’s claim, and found that the Lord Chancellor’s decision making process had been so unfair as to be unlawful due predominantly to the failure of government to consult a special report on duty police solicitors prepared by KPMG. The MoJ did not appeal the judge’s ruling in the judicial review.

Following the judicial review application, new Law Society president Andrew Caplen said of the application that: “In our opinion, the process creates a serious risk of market failure which could have major implications for society as well as the profession. Our claim supports many of the arguments put forward by the Criminal Law Solicitors’ Association and London Criminal Courts Solicitors’ Association, and we hope to combine both claims into one hearing… We know that our members have concerns about their livelihoods, but also more widely about the impact the outcome of the process will have on access to justice for the most vulnerable in our society.”

The hearings in the judicial review are expected early in 2015. Whatever the outcome, it is quite clear that the proposed new contracts, and dual contracting model, are not welcomed by criminal solicitors, for a variety of reasons. The outcome of the government’s efforts to impose the new system remains to be seen.

December 19, 2014Permalink Leave a comment

Diversity League Tables for Legal Sector Released

The latest Diversity League Tables from Black Solicitors Network were release yesterday evening. The annual league table ranks UK law firms in terms of the diversity of their workforce. This year’s table was produced through the involvement and analysis of 41 firms in total, with each having 480 fee earners on average.

Firms are analysed on a number of specific factors that relate to diversity, and ranked within those categories. The overall league table is then produced based on each firm’s ranking in the individual tables.

This year’s league table was dominated by the (relatively) smaller firms. Many of the highest spots went to firms which, compared to others taking part in the league table, were at the smaller end of the spectrum.

For example, the league table for “demographic diversity” was topped by Fasken Martineau. With barely over 70 fee earners, this firm is very much among the smaller practices to participate in the league table. In almost every table, Fasken Martineau managed to finish among the top five places. The only exception was the league table for gender diversity at partner level.

The top spot on the overall diversity league table, produced from the results of the other tables, went to Matthew, Arnold & Baldwin. This firm has risen rapidly up the rankings over the course of recent years, having come tenth in 2011’s table. Matthew, Arnold & Baldwin has an office in London and another in Watford, and earned its top spot based on its high positions in the tables for “demographic diversity” and “policy and practice.” The firm has scored consistently well in the latter category over recent years, while significant improvements in the “demographic diversity” table have been a key driving force behind its rise in the overall rankings.

O’Melveny & Myers also managed an enviable achievement. This is another relatively small firm, with just 50 fee earners. However, it took the top spot in the league for number of ethnic minority partners, with 25% of its partners coming from a minority background. Most impressively, this marks the fifth consecutive year that the firm has topped the table – a new record. The firm’s high score on this table was also a key factor in the firm finishing in second place on the overall table.

180 chambers were approached for participation in the survey, but disappointingly only 16 responded. This is down from 29 last year, meaning the number of chambers taking part has fallen by almost half. The chambers’ diversity league table was topped by Matrix Chambers.

Possible £100 Million Income Drop for Family Law Firms

law firmHigh street family law firms could face a potential drop in their income of more than £100 million as the delayed effects of legal aid cuts hit, according to a recent estimate. The reason for the sudden drop  is that cases funded by legal aid which started before the cuts took effect are now set to leave the system, and will not be replaced by fresh publicly-funded cases.

The estimate was made by supplier of divorce and separation services (LSM). LSM based their estimates on the latest figures provided by the Legal Aid Agency (LAA). These figures suggest that the Ministry of Justice is on target in its goal to cut the amount of money spent on solicitors fees, and this means that the amount paid to family law firms through legal aid is expected to show a £100 million drop compare to 2012/2013 before the cuts took effect.

So far, family law firms seem to have remained relatively untouched by cuts to legal aid as a result of publicly funded cases continuing to work their way through the system. Excluding cases to which the legal aid situation does not apply, 2013/2014 saw a drop of just 7% in legal aid fees received by high street solicitors for family law cases. They received a total of £132 million from the Legal Aid Agency last year, compared to £143 million in 2012/2013. However, this is believed to be nothing more than a delayed effect, and the larger part of legal aid funded cases are now due to leave the system soon. According to LSM’s estimates, this could lead high street family law practitioners to finally feel the effects of the cuts unless they can replace this income with an increased number of privately funded cases.

1,208 law firms are expected to be hit by this problem, and the total loss of income is estimated at £109 million. This means that, on average, each firm is facing a potential shortfall of £90,000. If this cannot be replaced with private fees, redundancies may strike lawyers and other staff at these firms.

Marc Lopatin, a trained mediator and the founder of LSM, suggests that the imminent drop in income could turn out to be “actually an opportunity for impacted solicitors to innovate and bring down the cost of family law services.” He goes on to say that “hourly rates of more than £200 per hour put thousands off and divorce solicitors will need to find new ways of their fixing fees for a meaningful service if they’re going to attract new business and survive in their current numbers.”