Showing posts with label culture of greed. Show all posts
Showing posts with label culture of greed. Show all posts

Friday, May 15, 2009

Lawyers fraudulent fee demands must be curbed by independent fee watchdog as culture of greed prohibits public access to justice

Law Society of ScotlandLaw Society of Scotland does little against fee fraud complaints.With the ongoing revelations from Westminster of a culture of greed revealed among politicians over their expenses claims, shamed into repayments only because of public naming & shaming by the media, calls are now growing for similar shaming of some of our notoriously if needlessly expensive legal firms, as the profession fails to deal with the issue of solicitors exorbitant & fraudulent fee demands to clients.

I reported on this issue in an earlier article here : Lawyers stealing from clients to earn 'double fees' while Law Society looks the other way in vast network of legal aid fraud & embezzlement

Basically, since competition in legal services has not existed in Scotland, ever, and the relevant legislation dating back to 1990 via Sections 25-29 of the Law Reform (Misc Provisions) (Scotland) Act 1990, which would have enabled wider rights of audience in Scottish Courts was withheld from implementation for 17 years to March 2007, solicitors and legal firms have charged clients what they wanted, in an orgy of spiralling greed, rather than allowing market conditions and market competition to set the price of legal services in Scotland.

If for instance, a solicitor wants a second or third home, or a new car, up the costs to clients go, unchecked, and must be paid on threat of legal action or repossession of clients assets .. and solicitors seem to have as easy a time ramping up their bills and claiming expenses for anything they want, just as much as MPs at Westminster loading their expenses claims for everything under the sun, soaking the taxpayer for all they could get – and getting away with it until now.

Just as at Westminster, where the 'Fees Office' set the rules for Parliamentary expenses claims, providing MPs with a justification for their claims for cleaning the swimming pool, moat, or paying everything (including their mortgage allowance) on their second home which of course they must have as one of life's necessities, the Law Society used to set its Table of Fees, by which solicitors could refer back to as justification for supporting their extortionate bills to clients, despite the poor quality of legal work, and high case failure rate.

After the Table of Fees were withdrawn in 2005, legal firms decided themselves how to ramp up the costs of litigation, and up to sky high levels they went as bonuses, cars, new offices, and all manner of perks were paid for out of clients soaring legal bills, while case success rates and quality of legal services remained poor, generating record levels of consumer complaints to the Law Society of Scotland.

Advice from the Law Society's own website currently offers the following : "With the withdrawal of the Society’s Table of Fees, it will not be appropriate to refer to fees recommended by the Society. If, for example in executries, the file is to be feed by an external fee charger such as an Auditor or Law Accountant, the basis on which the external fee charger will be asked to fee up the file needs to be stated to the client needs to be included. If hourly rates are reviewed during the course of the work, the clients will need to be told about any increase or there is a risk that firms will be unable to charge the higher rate."

I can only describe that as hopeless. Clients are hardly ever if ever informed about changes in rates, until the fee demand arrives on their doorstep.

The Law Society's advice continues : "As well as the hourly rate any commission which will be charged on capital transactions or on the sale of a house would need to be included. In any matter where the account is being rendered on a detailed basis, the charges for letters, drafting papers, etc will need to be expressed as well as the hourly rate. They can be in a separate schedule referred to in the basic letter."

Again, this is pure fantasy from the Law Society.

On matters of Executries & deceased estates, the Law Society offers the following : "In executries where the only executors are solicitors in the firm, the information should be provided to the residuary beneficiaries, as they will be meeting the fees out of their shares of the residue. In other executries the information should be provided to the non solicitor executors. "

I have never encountered this taking place in an executry yet, and since the handling of wills & executries by Scottish legal firms seems to produce the highest levels of fraud & embezzlement I have ever seen, the only advice I could give to anyone trying to write a will is keep lawyers and accounts well away from your belongings, because whatever your bequests are in your will, they will never reach their intended beneficiaries in their entirety if a lawyer has anything to do with it.

Even some of the legal profession’s senior members now admit soaring fraud is common among members, as Richard Keen, the Dean of the Faculty of Advocates, hinted in an earlier report I wrote here : Dean of faculty hints at rising fraud claims against solicitors as 'Penman Levy' bites hard into Scots law firms

In my experience of cases, clients who embarked on litigation often find their solicitors are content to write letter after letter to opposing legal teams, for no reason at all, other than to scoop up fees in some cases of £250+VAT for a single letter with four lines of text on it .. and several follow up letters which usually achieve nothing other than to inflate the solicitor's fee demand.

In one example of a case I heard of, there were 42 follow up letters at £150 each which totalled £6,300, with the case remaining unresolved after four years of letter writing and projected court costs of £10,000, all over a boundary fence misplaced by a galactic "5.2 inches" which the defenders in the action were at one stage willing to settle until their lawyer advised they should fight it out and continue sending costly replies to the pursuers costly enquiries.

Both legal firms in that case, in the Scottish Borders, have a good game of ping pong going - pursuers & defenders have paid over £10,000 each over a fence and a dispute, which might be settled quicker if wood worm eat the fence away, than if the two legal firms have their way.

Amazingly both those legal firms handle legal aid work too .. but I wonder, if they are so dishonest with their private clients, can they be trusted to receive public legal aid funds ?

We saw recently how the Law Society of Scotland protects legal aid fraudsters from criminal charges .. just to keep their members on the legal aid bandwagon, as I reported here : Law Society protects legal aid fraudster lawyers from criminal charges as SLAB nets £1.6 million ‘repayments’

The obvious conclusion from this is that solicitors who rip off their private clients, or are subject to complaints involving dodgy fee demands and other financial irregularities should not be allowed to claim legal aid fees.

In the past 12 months, many people have contacted me over their sudden receipt of huge fee demands from their solicitors, usually in the thousands of pounds, for as it usually turns out, non existent work allegedly undertaken two or more years ago, with little or no accounting of what that work actually entailed.

As an example, one demand sent to me by a worried client of an Edinburgh legal firm, who, among their case work, specialise in representing the Law Society of Scotland's Master Policy insurance, protecting crooked lawyers from negligence claims, threatened “legal action in seven days if an account of £23,000 was not paid immediately”. It was the first time the client had seen the bill, and notably there was no explanation of the work, no detailed breakdown, nothing at all to indicate what the solicitor had actually done, other than the words "working on a boundary dispute & drawing up letters".

The client contacted the legal firm, and pointed out they had ceased working on the boundary case in October 2006, due to settlement with the defenders, and that fees had been paid in full at the time, producing a receipt from the firm itself confirming that to be the case.

One of the senior partners of this legal firm then wrote back to the client, informing them "charges for work had been overlooked and not included in the fees at the time, and must now be paid or we will take legal action against you as intimated in our fee note."

The client returned to me, and I advised them to inform the legal firm they had passed on copies of the accounts to myself, and were going to call in the Police. Two days later, a letter arrived from the legal firm explaining "a clerical error had led to the fee note being issued, which has now been withdrawn."

However, not all cases of what can only be described as fraudulent fee demands, end up as easy to resolve as the above example, and, with the financial downturn affecting legal business significantly, I have noticed a huge upswing in legal firms bullying clients with demands for legal fees on work which simply never took place, and cannot be accounted for. When clients dare challenge these fee demands, the legal firm usually backs down, only after a threat of media exposure.

The legal services market, as it currently stands as a market monopoly controlled by the Law Society of Scotland and its members, cannot be trusted to set fees for legal services. These practices must end.

However, not only must it end, given the volume of complaints against fraudulent fee demands from the legal profession, there must be an independent fees commission to watch over the costs of legal services, ensuring access to justice is within the reach of everyone, not just the rich, or those the legal profession itself chooses to represent.

Given the high levels of fraud in solicitors fee demands, there must also be an independent inquiry into how far and how long this has been going on, with a view to the public being paid back money which has falsely been claimed by solicitors for work they never did, or legal services which were mishandled, either incompetently, or deliberately, just to inflate fee demands equating to a level of extortion over clients which cannot be allowed to go unchecked or unpunished.