Call for end to lawyers''closed shop'

A RADICAL overhaul of Scotland's legal system to give consumers greater choice and a cheaper service will be recommended today by the UK's competition watchdog.

The Scotsman has learned the Office of Fair Trading (OFT) wants to lift restrictions on the way lawyers operate in Scotland, opening up the profession to competition for the first time.

That would pave the way for high-street banks and even big supermarket chains such as Asda and Tesco to enter the market.

The Scottish Executive has agreed to respond to the OFT within three months and ministers are expected to accept the recommendations and deregulate the legal profession, bringing in full competition.

If that happens, it will revolutionise the way law services are provided and dismantle the closed arrangements between solicitors and advocates that have existed for centuries.

The OFT move was prompted by a "supercomplaint" filed by the consumer group Which? It argued that the strict controls on how legal professionals in Scotland were allowed to practice hindered market innovation, restricted consumer choice and might have led to higher prices.

At present, solicitors are not allowed to go into partnerships with non-solicitors, constraining companies from other fields from offering legal services and stopping solicitors from setting up joint groups with accountants or surveyors - groups that Which? believes could offer cheaper services to consumers.

Also, solicitors are the only people allowed to instruct advocates, a restriction that the OFT believes simply adds another layer of bureaucracy and cost to the process.

The OFT will recommend today that all these restrictions are swept away and the watchdog has made it clear it wants early and definitive progress from the Executive.

Kyla Brand, the OFT's representative in Scotland, said last night: "We are asking that there should be clear progress on this. There should be some policy statement by the end of the year."

She confirmed that, if the OFT's recommendations were implemented in full, it could mean the complete deregulation of the profession and the introduction of new players, such as supermarkets or banks. But she stressed that would depend on the way ministers and the legal profession decided to implement the changes.

The OFT did not take a definitive view on the call for an independent regulation body for the profession, taking control of solicitors away from the Law Society of Scotland. Ms Brand said this should only be decided once the Executive and the legal profession had decided to proceed on the lifting of regulations.

Kenny MacAskill, the justice secretary, is on holiday and was unavailable for comment last night. But yesterday, he wrote an article for The Scotsman making it clear he expected to drive through change in the legal profession and that the status quo was no longer an option.

The legal services profession in England is already some way down the road to deregulation, and there have been fears that Scotland could be left behind if it was not able to compete on a "level playing field".

Julia Clarke, from Which?, was delighted with the OFT's decision. She said: "They have confirmed our view that the current system of regulation is failing consumers. We now hope the restrictions will be lifted."

A spokesman for the Faculty of Advocates, which had given a cold reception to the Which? supercomplaint, would only say: "The faculty cannot comment upon a rumour."

Michael Clancy, of the Law Society of Scotland, which had called for no action by the OFT, said: "The supercomplaint was an important document and the society made its views known about the content of it."

Q & A: LEGAL 'SUPERCOMPLAINT'

Why was a complaint made?

Which?, the UK's largest consumer body, submitted a "supercomplaint", as defined in the 2002 Enterprise Act, to the Office of Fair Trading.

Which? asked the OFT to recommend removal of current restrictions within the legal services sector, including those on non-legal ownership of firms - allowing outside companies to own and run law firms - and access to advocates, which generally has to be through a solicitor. The argument was that existing business structures and working practices restricted consumer choice and could inflate prices.

Did Which? want to see anything else done?

Yes. It has a vision of an independent Scottish Legal Services Board to watch over regulation of solicitors and advocates or to take regulation completely out of the hands of the Law Society of Scotland and the Faculty of Advocates.

Was Scotland being singled out for reform?

No. England and Wales have led the way in many of the areas under consideration and legislation is currently going through the Westminster parliament to apply south of the Border.

What did the Law Society of Scotland make of the supercomplaint?

The society called for no action by the OFT, while recognising that some larger law firms in Scotland supported the introduction of alternative business structures as a way of trying to ensure a level playing field with English counterparts.

How strongly did the society make its feelings known about the supercomplaint?

Its chief executive, Douglas Mill, stated: "It is disappointing Which? has produced a document which has no evidential base and which does not contribute in a meaningful way to the debate on the legal services market in Scotland."

Was the Faculty of Advocates more tempered?

Not really. It warned of access to justice coming under "serious threat" and the dean, Roy Martin, QC, said: "It is not appropriate simply to translate arrangements passing through parliament in Westminster directly into Scotland. It may be said that the purpose of the supercomplaint is no more than to try to create a uniform regulatory regime throughout the UK for no reason other than regulatory consistency."