Category Archives: Legal Press Articles

Blockchain contract – a first for conveyancing firm

An online conveyancer has claimed that it has completed the first digital property exchange using blockchain contracts.

Wiltshire-based Clicktopurchase.com claims that it was able to help a client progress from initial marketing to a verified online exchange within just seven days.

According to the firm, the buyer’s offer was submitted on 5 October and the offer was accepted that same day, with the subsequent exchange of contracts completed via blockchain in a matter of seconds.

Many people are familiar with blockchain’s role as the enabler of cryptocurrencies such as Bitcoin. At its heart, blockchain is simply a digital database or ledger of recorded information.

Where blockchain differs from traditional ledgers is the ability to access more than one – and often thousands – of identical copies, at the same time from anywhere in the world.

As a user changes or updates a piece of information, all other copies of the ledger are automatically updated. There is no central server and the technologies used to code and validate the stored information make cyber-attacks difficult.

So called ‘smart contracts’ often use blockchain technology. Although not officially ‘contracts’ in the legal sense, they are a highly efficient method of performing an automated task following a pre-determined set of circumstances, for example a smart contract can be coded to automatically pay ticket holders compensation if their train is late.

However, it is believed that this is the first instance of blockchain being used to facilitate the conveyancing process.

In a recent blog, Clicktopurchase.com’s Chief Executive, Neil Singer, said that the use of blockchain was “an extremely interesting development for the property industry as a whole.”

He also questioned the future role of HM Land Registry saying: “If you have absolute proof in your digital wallet that you have the right to ownership, then why do we need the Land Registry?”

Meanwhile, HM Land Registry is believed to be exploring the future use of blockchain technology in its proposed ‘Digital Street’ scheme.

GDPR – helping your clients to get up to speed with new regulations

The clock is ticking – from 25 May 2018, businesses across the UK will come under the net of new data protection rules, which if ignored could lead to significant fines and sanctions.

GDPR and its implications have been largely unreported by the media. Despite the fact that in less than seven months, UK businesses will need to be compliant with the new rules, many small and medium-sized businesses remain unaware of the changes ahead.

Recent research found that 55 per cent of small businesses in the UK are still unfamiliar with the regulation.

As you will be aware, any company that holds data, whether it is for previous, existing or future customers or suppliers will need to co-operate with this new legislation or face the prospect of significant fines.

Recently, in conjunction with ICARIS Sentinel, we hosted a GDPR seminar aimed at encouraging businesses to learn how they can prepare for the changes ahead.

If you were unable to attend, slides from our seminar are available to view here and if you would like to share the importance of preparing for GDPR with your clients, we have produced a free guide which is available to download.

Our guide incudes essential facts and must-knows, including:

  • What you should be doing right now to prepare for GDPR
  • The ICO checklist for consent
  • The penalties, in depth
  • How to report a data breach
  • GDPR DOs and DON’Ts

We have also produced a myth-busting quiz which will help your clients to separate fact from fiction and help them understand the ramifications of the new regulations.

MPs call on Government to protect rights of genuine PI claimants

Conservative MPs are calling on the Government to protect the rights of genuine personal injury claimants and has warned that they could lose out if there is a knee jerk reaction to abuses in the personal injury market.

Chairman of the justice select committee, Bob Neill, has also called on the Solicitors Regulation Authority to focus its attentions on rogue personal injury solicitors instead of wasting its energies on arguments with the Law Society over independent regulation.

Mr Neill spoke at a fringe meeting on civil justice at the Conservative Party conference, which was organised by the Social Market Foundation and sponsored by Access to Justice.

He argued that the insurance industry “has got to do a lot more to make its case” regarding whiplash claim reforms.

Whilst admitting that there is “some abuse” he counselled against an overreaction which he warned might “prevent genuine claims coming forward.”

Conservative MP Alberto Costa, a former solicitor, said it was “an inconvenient truth to the insurance industry that while we’ve seen over the last five years a significant decline in soft-tissue injury claims, there’s been not a penny of decline in car insurance premiums.”

He told delegates that “we need to be careful that we don’t take away our rights to damages and diminish the duty of care that we all owe to one another.”

Mr Costa also called on MPs to temper their language when discussing personal injury legal claims, saying that whiplash was a “terrible” name and should instead be referred to more accurately as a soft-tissue injury. “Whiplash is an injury like any other,” he said.

Both MPs also gave their backing to the idea of legal aid supporting early advice in a range of areas.

Mr Neill claimed that the significant reduction in the use of mediation in divorce cases was due to early Legal Aid advice being unavailable to steer the parties in the right direction.

He also confirmed that he intends to fight for a ban on the use of paid McKenzie Friends, but admitted that his Government had “got it wrong” when it introduced employment tribunal fees – which were subsequently found to be unlawful and quashed by the Supreme Court.

Piano treasure hoard – couple’s grand gesture leaves them penniless

The highly-contested ownership of a treasure hoard, valued at a quarter of a million pounds, has been decided by a Coroner in Shropshire.

The hoard of 913 gold coins dating back to the 19th century – the biggest ever found in Britain – was discovered by piano tuner, Martin Backhouse during a routine inspection of a piano belonging to Bishop’s Castle Community College in Shropshire.

Despite a four month inquest, national press coverage, an investigation by specialists from the British museum and 50 potential claimants coming forward, the origins of the hoard could not be confirmed and it was designated as treasure by coroner, John Ellery.

The designation means that the hoard is subject to the provisions of the Treasure Act 1996, meaning that it is divided between the owner of the property, the finder and the Crown, which receives the majority of the proceeds.

As a result, Graham and Meg Hemmings, the couple who owned the piano before donating it to the college will receive nothing from the haul, despite it having been in their home for 32 years until 2016.

However, Mr Hemmings told The Telegraph: “I don’t regret not finding the coins. I think that’s moved on. We’ve got to celebrate that it’s going to be used for a good cause, and that’s how we view it – positively.”

Mr Backhouse told the paper that he would use his share of the proceeds to retire early because he suffers from tinnitus and the remaining funds will go to his children.

The hoard will now be offered to the British Museum and other institutions.

Law Society’s Conveyancing Quality Scheme ‘an abuse of power’ – tribunal rules

A Competition Appeal Tribunal (CAT) has ruled that The Law Society “abused its dominant position” in forcing thousands of law firms to train through its widely-recognised Conveyancing Quality Scheme (CQS).

The news comes after claimants raised concerns that the that the Law Society’s requirement for more than 3,000 firms to ‘purchase’ anti-money laundering (AML) and mortgage fraud training from it as compulsory requirements for their CQS accreditations was ‘anticompetitive’ – a view which was strongly upheld by the CAT.

Mr Justice Roth announced that The Law Society had effectively abused its position of power by “obliging CQS member firms to obtain” the paid-for training.

He added that Nationwide Building Society’s move to make CQS accreditations a mandatory requirement for panel membership in April 2015 unfairly increased the Law Society’s position of power, while simultaneously tying in more than a third of the lending market.

The CAT has granted an injunction to force the Society to re-open the market to competition. Damages are to be decided at a later date – but the costs of the case are estimated to be around £1m, according to reports.

The CAT also rejected the idea that iCQS training was loss-making, after The Law Society produced a “disappointing” series of figures which were found to be “wholly unsatisfactory”.

It said that is was “impossible to reach any reliable view as to whether or not the CQS was loss-making, at least after 2012 when the training income significantly increased”, the CAT said.

In response, Robert Bourns, Law Society president, insisted that: “For the vast bulk of the time CQS training has been available, it has been compliant with competition rules.

“I am certain that in setting CQS up, The Law Society acted in good faith and in the public interest,” he added.

“We note the decision and have and will take steps to avoid similar issues in the future,” he said.

Legal Aid should come before solicitors’ financial viability – Law Society

The Law Society has reminded legal aid solicitors who specialise in criminal law that they can exercise discretion when it comes to accepting cases.

The Society, which regulates law firms in England and Wales, said such solicitors have no obligation to take work if it would threaten the viability of their firm.

While legal aid solicitors are critical in representing people accused of wrongdoing under the Legal Aid Agency’s (LAA) duty rota scheme, the viability of law firms is under threat as the remuneration rates for criminal legal aid work have not been increased since 1998.

James Parry, chair of the Law Society criminal law committee, reminded solicitors that only duty work is obligatory, and all other work may be refused on the grounds that it is “uneconomical”.

“The reduction in funding for criminal legal aid work has created a situation where many solicitors are increasingly required to undertake work that is unremunerated or carried out at a loss,” he said.

This scenario presents a “serious tension” between continuing to undertake legally aided work or to conduct business in a financially sustainable manner, he added.

Firms must carefully consider each instruction, in particular as to whether to accept or refuse such instructions will be contrary to their professional obligations.

Mr Parry continued: “Many solicitors’ practices undertaking this vital work in communities around the country are struggling to survive. Persistent cuts to rates can create a situation for providers where work cannot be carried out to the requisite professional standards without undermining the financial stability of providers.

“We recognised that solicitors need help in identifying circumstances which may warrant a refusal to undertake legal aid work and in doing so to ensure compliance with the Solicitors Regulation Authority’s Code of Conduct. This new practice note sets out the situation as it exists under the contract.”

At Moore Thompson, our legal sector specialists are highly experienced in advising solicitors, barristers and legal practices on a range of tax and financial matters. We can support legal practices by ensuring that you are as tax-efficient as possible, which in turn can help you to achieve greater profitability. For more information, please contact us.

Cross party group of MPs call for Tribunal fee reforms

A Parliamentary report entitled Human Rights and Business 2017, has called for an imminent reduction to Tribunal fees.

Although the report, which was published in April has been put on hold following news of a snap General Election to be held in June, the proposals are likely to be considered by the next Government.

The report, published by the joint committee on human rights, claims that Tribunal fees are “a barrier to victims seeking justice” in relation to “human rights abuses, including discrimination, at the hands of their employers”.

It argues that the fees, which were first introduced in July 2013, “offer impunity for employers abusing human rights”.

In the report, Parliamentarians have accused the Ministry of Justice (MoJ) of complacency and a “lack of engagement,” criticising the Government’s overall approach to business and human rights in general.

In response, Justice Minister Sir Oliver Herald has stressed the prominence of legal aid case funding in relation to certain human rights violations.

But the committee says that more needs to be done to help those wishing to pursue claims against the actions of companies, as opposed to claims against the actions of public authorities.

A Government spokesperson said: “We will study the proposals of the committee in detail and will provide a full response in due course.”

Justice Minister Sir Oliver Herald added that the Government is currently consulting on introducing improvements to the existing Employment Tribunal fee system.

For more information about the tax and financial services Moore Thompson can provide to clients in the legal sector, please contact us.

Why solicitors cannot afford to be complacent about cyber security

Around one in four legal firms have experienced a cyber-attack, according to a new survey published by NatWest.

Researchers who conducted the annual Benchmarking Survey on behalf of the bank, found that of the 269 law firms who responded to the survey, a quarter had fallen victim to attacks by cyber criminals.

The legal sector has become a particular target due to the valuable client data it holds on organisations and individuals as well as the significant sums of client monies it handles.

The increase in cyber-targeted attacks has, in part, led to new tougher data handling regulations which are due to be introduced in May 2018.

The EU’s General Data Protection Regulation will mean that all businesses handling EU citizens’ personal data will have just 72 hours to notify data subjects of a breach.  Experts believe that this will lead to more protection breaches being made public in the future which, in turn, could damage a law firm’s reputation.

The British Chambers of Commerce (BCC) which also conducted a poll of its members to understand the scale of cyber breaches, found that, despite greater awareness about the potential danger that cyber criminals pose, there are still a significant number of firms who are failing to take precautions to protect themselves.

Adam Marshall, the BCC’s director general, said: “Cyber-attacks risk companies’ finances, confidence and reputation, with victims reporting not only monetary losses but costs from disruption to their business and productivity. Firms need to be proactive about protecting themselves from cyber-attacks.

“Firms that don’t adopt the appropriate protections leave themselves open to tough penalties. Accreditations can help firms assess their own IT infrastructure, defend against cyber security breaches and mitigate the damage caused by an attack.”

Sharp rise in cost of Solicitors Disciplinary Tribunal prosecutions, report finds

The latest annual report of the Solicitors Disciplinary Tribunal (SDT) suggests that the costs incurred by the Solicitors Regulation Authority (SRA) associated with prosecuting lawyers on account of rule breaches has risen significantly in the past year.

According to the study, costs of more than £3m were awarded to the SRA last calendar year, up from just £1.7m in 2015 and representative of a year-on-year rise of almost 44 per cent.

The SDT’s report suggests that the “significant increase” can, in part, be explained by the fact that “a number of substantial cases were heard during the period [studied]”.

It adds that, in 2016, “cases lasted longer and were more complex in terms of the investigations carried out by the SRA”.

The study concluded that the nature of the cases had, in turn, had a knock-on effect on the costs and workload of the Tribunal – which sat on 260 days last year, up 41 per cent on 2015.

It found that 76 solicitors were struck off last year, up from 56 in 2015 and 48 in 2014. It also revealed that the annual cost of administering the SDT per practising solicitor chimed in at approximately £20.97 – a small but not substantial year-on-year increase.

At Moore Thompson, our legal sector specialists are highly experienced in advising solicitors, barristers and legal practices on a range of tax and financial matters. We can support legal practices by ensuring that you are as tax-efficient as possible, which in turn can help you to achieve greater profitability. For more information, please contact us.

Probate fee increase put on hold as MoJ runs out of time

The Ministry of Justice (MoJ) has stated that it has run out of time to push through legislation which would have seen a massive increase in probate fees introduced in May.

Fees had been due to increase, significantly in many cases, with a fixed fee of £155 (for those applying through a solicitor) being replaced by a sliding scale. This would have meant estates worth more than £2million would have been hit with a 9,000 per cent increase and would have attracted a fee of £20,000.

However, the controversial fee increase, which had been dubbed a ‘tax on death’ and which attracted opposition from solicitors, charities, a parliamentary committee and even Conservative MPs, has now been placed on hold, with the official explanation being that this is due to the snap General Election announcement which has halted parliamentary business.

There is no confirmation from the MoJ whether this is a temporary delay or will lead to a complete scrapping of the probate fee increase and a senior Conservative declined to say if the scheme would be brought back if the Prime Minister is re-elected.

Regardless of what happens in the future, probate services will remain important aspect of estate planning.

At Moore Thompson we have a long history of assisting legal firms and can work with you to offer your clients financial advice to mitigate their tax burden. If you would like to know more about our services, please contact us.

For further information about our wills and probate service, please contact us.