Monday, June 21, 2010

Holyrood’s Justice Committee votes against majority non-lawyer ownership of law firms, saves investors from Scots legal world's organised crime gangs

Justice CommitteeScottish Parliament’s Justice Committee voted against non-lawyer ownership of law firms. INVESTORS can breathe a sigh of relief at the result of a vote at the latest Justice Committee hearing of the Scottish Government’s beleaguered Legal Services Bill, where last Tuesday, MSPs voted through an amendment written by the Law Society Scottish Government to restrict non-lawyer ownership of Scottish law firms to 49%, throwing out the Scottish Government’s initial proposals that non-lawyers could end up owning 100% of law firms if the ‘alternative business structures’ as originally proposed in the Legal Services Bill had become law.

The problem with the original proposal, allowing non-lawyers to invest or even totally own a Scots law firm raised the question who would actually want to buy in to any Scottish law firm with the kind of poor regulatory & client treatment record which is so typical of providers of legal services in Scotland’s currently solicitor only dominated legal services market ?

Who for instance, would want to invest in a law firm with over thirty partners which is currently facing 21 separate complaints investigations (5 of those involving embezzlement of client funds), 20 negligence claims, 9 claims against the Guarantee Fund & 2 criminal investigations ?

Luckily for the law firm in the above typical example, and noting many others have similarly poor complaints records, they wouldn’t have to disclose such information to potential investors and of course, the Law Society of Scotland would never volunteer such detailed information which may slightly discourage any investors with an ounce of common sense from touching a Scottish law firm with a barge pole …

This is certainly one vote on the Legal Services Bill which may well end up saving outside investors a lot of money, as most Scots law firms are seen as poorly performing & untrustworthy, holding among the worst rates of client complaints & consumer dissatisfaction in the modern world, where it has become more the norm than the exception for clients to be ripped off after engaging the services of even the most famous law firms in Scotland’s legal services marketplace today.

The Justice Committee’s latest stage two debate on the Legal Services Bill, during which several amendments were debated as well as the non-lawyer ownership issue (Amendment 317), can be read in full here : Legal Services (Scotland) Bill: Stage 2

robert_brownRobert Brown MSP (LibDem) voted in favour of restricting outside control of Scots law firms. Robert Brown, speaking in favour of Amendment 317, put forward by the Law Society to restrict outside ownership of law firms said : “Amendment 317 is designed to ensure that there is a majority holding in the hands of solicitors or other regulated professionals. It is the compromise position that was debated and supported by the Law Society of Scotland. I hope that it has the merit both of being reasonable and, as the convener indicated, of being common ground on which the profession can regroup, to some extent.”

Mr Brown continued : “I do not pretend that it is the perfect solution—there are issues with all the potential solutions—but it provides further protection against outside control, which is, rightly, of concern to many solicitors. Last week we debated issues relating to the rights of minority investors. It is certainly the case that influence is as relevant as control. Nevertheless, amendment 317 would put a brake on the extent to which law firms can be taken over by outside interests. The committee should apply that brake.”

I for one am certainly in agreement with Mr Brown on this issue. Unsuspecting members of the public & potential investors must be protected from pumping their money into some law firms whose business models border (or even surpass) that of organised crime. Perhaps an amendment should be raised prohibiting law firms from accepting any outside capital investment, thus saving a lot of people from a severely dodgy investment in very dodgy law firms …

Fergus EwingFergus Ewing, Minister for Community Safety argued in favour of external ownership of law firms. The Scottish Government’s Community Safety Minister Fergus Ewing, once again apparently standing in for the Justice Secretary Kenny MacAskill who has all but disappeared from the Legal Services Bill debate put forward the Scottish Government’s view, claiming the Legal Services Bill would usher in effective regulation : “I emphasise that the bill contains a particularly Scottish solution. It is important that we have a robust regulatory regime. I can recall having been involved in debating no more robust regulatory regime as a member of the Parliament for the past decade. That regime will also be obtained at virtually no expense to the taxpayer. That contrasts with the position down south, where the Legal Services Board's implementation costs to 31 December 2009 were £4.58 million and its budget for running costs in its first full year, which began in April 2010, is £4.74 million. Similar costs here would not be as high as that, but would be comparable.”

Mr Ewing, you must be kidding. Regulation without expense to the taxpayer ? Even the Scottish Legal Complaints Commission received a whopping £2million from the taxpayer, effectively a public gift to the legal profession which your Ministerial colleagues now refuse to talk about or demand returned to help protect public services now on the verge of being slashed due to the UK’s budget deficit.

SLCC LAW SOCIETYLaw Society of Scotland & Scottish Legal Complaints Commission are anti-client when regulating complaints against lawyers. Robust regulation of the legal profession in Scotland is simply not possible, as all reforms to regulation to the present date have been compromised by the Law Society and so willingly voted through by politicians in the Scottish Parliament. The new broom of the Scottish Legal Complaints Commission (SLCC) has become little more than the anti-client front organisation for the Law Society of Scotland and rogue lawyers the Law Society always wanted it to be, leaving the reforms of the LPLA (Scotland) Act 2007 firmly in the rubbish bin. The same is already happening with the Scottish Government’s plans for a ‘robust regulatory regime’ for the Legal Services Bill which has been steadily re-written by the legal profession itself.

Without much surprise, the Law Society of Scotland welcomed the Justice Committee’s vote to retain Law Society member majority ownership of law firms, thus ensuring the society’s continued influence & control over consumers choice of legal services in Scotland.

Jamie Millar, President of the Law Society of Scotland, said: “A number of key amendments were debated today and I am very pleased that the committee has agreed that there should be a majority ownership of new legal services providers by solicitors and other regulated professionals. It’s clear that MSPs on the committee have listened carefully to the issues and concerns raised by the profession and others, particularly those about external ownership, and what has been agreed today is very much in accordance with the Society’s own policy on ABS ownership.”

Lord Hamilton judicialThe Lord President Lord Hamilton is once again ‘a buffer’ between the Government & legal profession to maintain lawyers independence (from independent accountability). Mr Millar also said that the Society was pleased that the role Lord President of the Court of Session was to be enhanced and that his consent would be required in the appointment of approved regulators. He echoed the comments of Robert Brown MSP who said the role of the Lord President was an important ‘constitutional buffer’ (in other words, a well practiced drain-blocker, immovable by any means in existence) between the government and the legal profession and necessary to preserve the independence of the profession.

With the dreaded inclusion of the Lord President in all of this, at the behest of the Law Society of course, lets hope the Lord President doesn’t take 40 years to come to a decision (as he did with McKenzie Friends) on whether approved regulators (the Law Society of Scotland being the only ones applying) are functioning properly or not – and since the Law Society hasn’t managed to regulate the legal profession properly in the past 60 years, we doubtless can expect a continuance of the Law Society of Scotland’s style of crooked self-regulation when or if the Legal Services Bill manages to pass into law.

So, obviously the Law Society is pleased with it’s re-write of the Legal Services Bill after all that fuss & pantomime between so-called ‘factions’ of the Scots legal profession wanting to break away if they didn’t get their way … and then getting themselves elected to the Law Society’s ruling council after things went their way ….

My advice to consumers ?

The Legal Services Bill as it is being re-written by the Law Society of Scotland, will not benefit consumers of legal services in Scotland one bit, so much that now, some of the consumer organisations which are responsible for the Legal Services Bill’s very existence, now choose not to issue comment on the bill's progress nor have those same consumer organisations chose to campaign against any of the Law Society sponsored re-writes of the Legal Services Bill, which was initially claimed would bring free choice of legal services to consumers in Scotland.

Clearly, for honest, dependable legal services, consumers are going to have to look elsewhere, as the Scottish legal profession under the regulation of the Law Society of Scotland & SLCC couldn’t be trusted with an exploded oil well, which I’m sure they would argue was nothing to do with them as similarly appears to be the case in each of the 5000 complaints & grievances filed or expressed by clients against solicitors & advocates each year in Scotland.

My advice to investors looking at putting their money into Scottish law firms ?

Take your investments elsewhere ! There are billions more opportunities and safer havens around the world for your money than investing in Scots law firms with poor regulator records who would much rather dance the tune of the Law Society of Scotland than give you a good, stable, dependable return on your investment. You would be well advised to avoid investing in what many corporate & private clients of Scots law firms, through their own bitter experiences of using solicitors in Scotland dub ‘the organised crime of the Scottish legal services market’.

You can read my own coverage of the Legal Services Bill here : Legal Services Bill for Scotland - The story so far

35 comments:

Anonymous said...

"Who for instance, would want to invest in a law firm with over thirty partners which is currently facing 21 separate complaints investigations (5 of those involving embezzlement of client funds), 20 negligence claims, 9 claims against the Guarantee Fund & 2 criminal investigations ?"

Admittedly not such a great investment opportunity !

Anonymous said...

Who came up with the stupid idea of investing money with lawyers firms ????

Its bad enough being forced to use the reptiles for legal stuff but handing money over to invest in their firms ????

Anyone would have to be certifiable to do it !!

Anonymous said...

I'd rather burn my money which is what people do when going to a lawyer anyway so I agree - definitely a bad idea for an investment.

There are 10,000 lawyers in Scotland,right ? so thats 10,000 potential Bernie Madoffs just waiting to do ponzi schemes on all their investors.

Anonymous said...

If fools and their money are willing to invest in crooked law firms the odds are the investors are probably criminals themselves.

Anonymous said...

I dont think Mr Brown meant to protect investors from handing over their money to rogue lawyers but I take your point.
The appalling firm you used as an example in your third paragraph is based in Edinburgh or Glasgow ?

Anonymous said...

Oh dear now the lawyers are themselves short of money so are out looking for new targets.How right you are Peter anyone who invests in a law firm must be out of their bloody minds !

Anonymous said...

Invest in a law firm. Crazy idea, try John O'Donnell's firm he is good at making money vanish. The Law Society are good at covering everything up.

Anonymous said...

My advice : Clients should immediately withdraw their funds from any legal firm or solicitor who may be holding monies on their behalf. If you have funds being held by your solicitor, make it your priority this week or as soon as possible to ensure the safety of your wealth, or you may end up losing it.


AN EARLIER WARNING FROM MR CHERBI.

Anonymous said...

Organised crime is exactly what lawyers are in Scotland.DONT TRUST ANY OF THEM TO DO THE RIGHT THING FOR YOU BECAUSE MONEY ALWAYS COMES FIRST!

Anonymous said...

Everyone knows that the Scottish legal profession is effectively unregulated - courtesy of the Law Society of Scotland and the SLCC - and controlled by its outside insurance provider - the disgraced company Marsh.

Fergus Ewing is equally clear about his favoured position, namely 'glove puppet' for the aforementioned, while Mr MacAskill's silence on the issues is deafening - probably trying to think of an explanation for Mr Megrahi's continuing good health.

And where are the Consumer organisations? Why is Consumer Focus Scotland not offering to participate in the regulation of the profession, or suggesting an alternative to the Law Society - the OFT would be one possibility and could just possibly break the suffocating cycle of parocialism fostered and encouraged by the present Lord President.

Anonymous said...

It sounds like Fergus is arguing for investment in law firms.Quite simply a recipe for disaster.

Anonymous said...

Why bring in the Lord President into this when this is nothing more than a business venture for lawyers ?

Smacks of corruption to me and if Lord Hamilton has any sense he would avoid it like the plague.If not then we know whose side he's on although from your McKenzie Friend reporting I think we can already guess that!

Good expose as always Peter.

Anonymous said...

http://newsimg.bbc.co.uk/1/hi/scotland/tayside_and_central/10367114.stm


A casualty doctor who tried to lure two primary schoolgirls into a car has been warned he could face a life sentence.

Leslie Mitchell, from Carron, Falkirk, approached the girls, aged 10 and 11, as they were returning home from school.

The 56-year-old, who calls himself a "recovering paedophile", now faces a lifelong restriction order after the judge condemned the "predatory nature" of his crime.

Sentence was deferred until September.

Anonymous said...

Such a remarkable analysis Mr Cherbi which I'm sure should take care of any lingering thoughts investors have in putting their money into solicitors firms.

Peter Cherbi said...

# Anonymous @ 13:59

I wouldn't advise it ...

# Anonymous @ 14:33

Oh I'm sure they will find someone .. or perhaps embezzle the money instead which is what usually happens under the Law Society's current self regulatory regime ...

# Anonymous @ 14:52

A good comparison .. 10,000 Bernie Madoffs ...

# Anonymous @ 15:23

Probably yes ...

# Anonymous @ 15.35

Edinburgh and Glasgow !

# Anonymous @ 16:10

Yes, quite ... Mr O'Donnell is an expert in taking the money and getting away with it from what I read in the Sunday Mail ...

# Anonymous @ 16:13

Indeed yes .. advice I still recommend all clients of solicitors in Scotland follow ...

# Anonymous @ 16:32

Very good points, and I agree the OFT would be a possibility for regulation given the Law Society has proved over its entire existence it cannot regulate solicitors while also representing the client's interests ...

The Legal Services Bill is I hear, now nicknamed the "Legal Services Bull" ... perhaps an indication of how much people regard it now ...

# Anonymous @ 16:55

Bringing in the Lord President ensures the legal profession's point of view or policy pursuits are always paramount ...

# Anonymous @ 18:07

Nothing remarkable about it really .. its staring everyone in the face, but with weak politicians and a far too powerful legal profession I'm sure some idiots will be persuaded to put their money into what must rank as some of the most corrupt law firms in the 'developed' world ...

Anonymous said...

A certain solicitor from an Edinburgh law firm who are in favour of abs was recently in Dubai to drum up investment capital for his firm.I dont know how well the meeting went but you can rest assured those attending his meetings would give even the most dim minded person cause for concern.

Anonymous said...

Anonymous said...

Organised crime is exactly what lawyers are in Scotland.DONT TRUST ANY OF THEM TO DO THE RIGHT THING FOR YOU BECAUSE MONEY ALWAYS COMES FIRST!

21 June 2010 16:23

amen to that ! fugging parasites in suits

Anonymous said...

As someone else already said this is a crazy idea to invest in a firm of lawyers.Actually I think this is probably THE worst investment idea I've ever heard of.Whoever dreamed it up should be fed to the sharks.

Anonymous said...

I'm in agreement with you on Fergus Ewing's argument of low cost regulation - quite impossible considering the kind of business we are talking about here and its turnover.

The Legal Services Bill should be voted down to give the SNP a bloody nose on their disgraceful handling of the Scottish justice system although as you well know just about every Scottish Executive and Scottish Office team before them have also mishandled the Scottish justice system to the favour of the legal profession !

Anonymous said...

I think its getting to the stage where the Law Society are going to order your death.I'm being serious.

Anonymous said...

How much are the SNP getting for promoting investment in solicitors firms ?

Anonymous said...

Criminals have been investing in law firms for years,the Law Society knows it,the Police know it and nothing is done.All bought and paid for by criminal investors eager to stay out of jail.

Peter Cherbi said...

# Anonymous @ 19:12

Anyone I know ?

# Anonymous @ 20:33

Yes, exactly ... a billion pound business cannot be regulated on a shoestring and a fiver, as Mr Ewing seems to think will be the case ...

# Anonymous @ 21:13

I'm sure its their nightly dream ...

# Anonymous @ 22:57

Dirty business usually attracts dirty money ...

Anonymous said...

Just the same over here kid - the mafia own their own attorneys although I always get the feeling from your blog its the attorneys who own their own mafia in Scotland

Anonymous said...

"21 separate complaints investigations (5 of those involving embezzlement of client funds), 20 negligence claims, 9 claims against the Guarantee Fund & 2 criminal investigations"

Imagine putting that as a sound investment proposition.Barmy !

Anonymous said...

Let's not forget that no less a person than Douglas Mills spoke in defence of Sir Fred - the shred - Goodwin after the RBS fiasco, claiming that poor Fred was the victim of a 'witch hunt'.

What's the betting that banks return the favour and invest some of OUR money in Scottish Law Firms.

Anonymous said...

Anonymous said...

How much are the SNP getting for promoting investment in solicitors firms ?

21 June 2010 21:45

My thoughts exactly although those saying the bill might not pass - I'm sure the Tories will help the SNP along if they need the votes to get it through.

Anonymous said...

Sounds like they are making the Lord President 'part of the business' so how much is he getting paid to be this constitutional buffer ?

Anonymous said...

Speaking of the Tories I see they just raised VAT to 20%!
Yet another reason to stay away from lawyers who will probably add another 5% to their bills to make it 25%!

Anonymous said...

What an outrageous idea handing money over to lawyers as an investment.
I wouldnt and if RBS does it I will close my account there.Hope others do the same

Anonymous said...

Who leaked the info about the law firm facing 21 complaints etc ?
I'm sure they will be in for the high jump !

Anonymous said...

Anonymous said...

I think its getting to the stage where the Law Society are going to order your death. I'm being serious.
-----------------------------------
If the Law Society resort to violence they are like the National Socialist German Workers Party. The Law Society murdering Peter will cause a massive increase in publicity and highlight them for the thugs they are.

Lawyers and their supporters better not harm Peter Cherbi, it will be the rock they perish on.

Anonymous said...

I agree Peter this Legal Services Bill is useless for anyone wanting a choice of lawyer or non lawyer but I'm sure it will pass now the Law Society have helped write it differently probably all the msps who vote for it will get a nice wee present at Christmas for doing their bidding once more.

Peter Cherbi said...

Thanks for all your comments & emails on this article so far ...

To answer some more of your comments :

# Anonymous @ 22 June 2010 01:38

quite so ...

# Anonymous @ 22 June 2010 10:53

Indeed yes ... and I'm sure the banks will happily oblige a few law firms with extra finance, whether its an 'investment' or on the back of unsuspecting clients who still allow their solicitors to handle their funds ... and not forgetting the well trodden path of looted wills & executry estates - a highly profitable speciality of the Scottish legal profession ...

Anonymous said...

I would also close my account if I knew my bank was 'investing' my money in solicitors. The sooner we see the re-introduction of straightforward savings banks the better.