Just not Keen on 'taxation without representation'

Published on Sunday 16 March 2008 19:27

SOLICITORS can expect to pay a levy of around £400 a year to fund the new independent body being set up to handle legal service complaints, it has emerged. The Scottish Legal Complaints Commission (SLCC) is consulting the Law Society of Scotland and Faculty of Advocates on its budget proposals – including the levy that the professional bodies will have to collect from their members.

The figures, which have still to be finalised, would see most solicitors pay an annual levy, estimated at 420. Combined with the practising certificate fee – which is currently set at 735 a year – the cost of continuing to wear the badge of solicitor is likely to rise to more than 1,000 a year.

But it is likely that in-house solicitors, who make up around a quarter of the profession, will be offered a significant discount to reflect the fact that they rarely receive complaints. The In-House Lawyers Group has won support from the council of the Law Society of Scotland in recommending its members to pay a third of the levy, or around 140.

Newly qualified solicitors are also set to receive a 50 per cent discount, in line with the fact they pay only half the practising certificate fee during their first three years. As the commission is due to open in October, half-way through the financial year, all lawyers will be asked to pay a half-year levy to cover costs for its first six months.

Advocates will also have to pay the levy, at a rate being estimated at around 332 a year. But Richard Keen, QC, the dean of the Faculty, revealed he has written to Kenny MacAskill, the justice secretary, to express his "fundamental concern" about the prospect of "taxation without representation".

Keen points out that advocates have no member sitting on the commission, and have generated far fewer service complaints (just 26 a year) than solicitors (around 3,500).

"We are not represented on the commission, but we are being asked to pay its budget," he says. "We are being asked to pay an annual levy on a per capita basis. The illustrative figure is 166 per person (for six months]. That means the Faculty is going to have to pay around 160,000 a year to the commission. That is not so they can deal with 26 complaints, because they are only dealing with service complaints. We are talking about something of the order of ten complaints that are going to be dealt with."

He adds: "What concerns me is we may have created an enormous mallet to crack a very small nut as far as the Faculty is concerned. We are paying far, far more than solicitors in order to have this commission deal with service complaints and yet we are the ones with absolutely no representation on the commission. That appears to me to be inequitable."

Keen added the levy would end up being reflected in the fees charged to clients.

"We have to remember that every layer of bureaucracy has a cost, and someone has to meet that cost, and generally it ends up being the consumer," he says.

Philip Yelland, the Law Society of Scotland's director of client relations, says the rate of the levy would reflect the fact the commission was going to cost double what was originally forecast.

"The budget is still at a draft stage," he says. "One of the things we have been very conscious of is that the cost of the commission is significantly in excess of the original (estimate]. When this went through the finance committee of the Scottish Parliament, the figure was 1.5 million. It is now around double that.

"I think the commission will cost what the commission costs, and they have to set a budget that is fair and reasonable."

But he acknowledged its initial budget could not include what revenue might be generated by case fees – as it is not possible to forecast how many complaints it will deal with – and the commission will have an ongoing responsibility to consult the profession annually.

"They will have an additional source of income which will be case fees," he says. "That is something that clearly, in year one, they can't include in their budget." While the Law Society of Scotland will no longer handle service complaints, solicitors should not expect to see a reduction in the cost of their practising certificate, he adds.

"To say a levy at 400 per annum would mean 400 could come off the practising certificate would be an unrealistic expectation," he says. "If they start on 1 October, our role won't stop. We have still got conduct complaints to deal with (and] we are being given additional powers to deal with unsatisfactory professional conduct."

The society will also need resources to address the impact of the commission's decisions on standards, he says.

But Yelland adds the society is already working closely with the commission to ensure a "smooth transition" from the new complaints handling system.

"We have had a very good positive constructive discussion with them," he says. "They are setting up a new body and judging how many complaints they will get.

"They have clearly recognised that we have been dealing with service complaints since 1989 and they have been very keen to learn from us.

"They have been very keen to talk to us, and we have been very keen to pass on our experience and the information that we have."

Jane Irvine, chairwoman of the commission and the current Scottish Legal Services Ombudsman, says work is ongoing to set the levy and rates. But she adds that the commissioners recognise the need to "budget wisely".

"Members of the SLCC are currently working on setting a budget for the first year of our operation, and considering how case fees should be charged," she says.

"In doing this, we are extremely conscious that we owe duties to everyone who will use our service to create an efficient and effective body, so we must be adequately funded and operate a practical case fee system.

"We want to create systems that work effectively and lead to early resolution of complaints. We also recognise we owe duties to the legal profession and to their clients to use the independence we have to plan commercially and budget wisely, as ultimately our costs will be levied on the legal profession."

Janet Hood, chairwoman of the In-House Lawyers Group, says she is pleased the Law Society of Scotland is supportive of a substantial discount. She concedes the cost is "hardly a bank-breaker" for most employers, but argues that in-house lawyers rarely generate complaints.

"We are hoping to pay about a third of what the commission fees will be," she says. "I do hope the commission will listen to not only the In-house Lawyers Group but to the Law Society of Scotland. And if there are lawyers with the commission, they will be in-house lawyers too."