Category Archives: Legal Press Articles

Solicitors should keep up to speed with changing consumer habits

Solicitors are being reminded to consider the fact that legal services consumers are likely to show differences in the ways in which they choose their ideal solicitor depending on the kind of legal issues they require assistance with.

According to a report from the Solicitors Regulation Authority (SRA), almost three quarters (71 per cent) of consumers hunting for a conveyancing solicitor will typically spend anywhere up to an hour researching their options – with 15 per cent of consumers predominantly interested in obtaining pricing information.

The study suggests that consumers looking for these services are likely to select their ideal solicitor based mainly on price and affordability.

However, the Law Society has warned that this is less likely to be the case when it comes to other, more complex, areas of the law – where consumers may prioritise experience and expertise over price.

“On the basis of our own research across different areas of law, I would advise the SRA not to extrapolate from one area of law to draw conclusions across the whole marketplace,” said Law Society President Joe Egan, criticising the SRA’s report.

“In addition, people’s priorities and decisions change as their legal situation becomes more complex – the experience of the solicitor, their skill-set and regulatory protections were valued over price the more complex an issue became,” he said.

The comments come at a time when law firms are facing new pressures to openly publish pricing and other information about their services, as part of a move spearheaded by the SRA.

However, while the SRA argues that “more clearly signposted information on price could help people,” the Law Society insists that liaising with a solicitor directly and discussing price and other issues head-on are the “most appropriate” ways for clients to agree on and receive a high quality service in line with their expectations.

Survey suggests law is one of the UK’s ‘top paid’ professions

A new study suggests that law is one of the best-paid professions in the UK.

According to the research, which was carried out by salary comparison website Emolument, approximately 30 per cent of UK solicitors earn £100,000 or more a year – making law officially one of the highest-paid professions in the country.

In fact, the ‘earning power’ of the legal sector ranked second in the survey, just behind the financial services sector, where as many as 60 per cent of professionals earn £100,000 or more.

The legal sector was also followed closely by the insurance, energy and mining and pharmaceuticals sectors – which all ranked in joint-third place.

According to Emolument, the average solicitor will need a minimum of approximately 11 years’ practising experience before they can expect to receive a six-figure salary.

Interestingly, however, of all professions studied as part of the survey, this 11-year period is actually the shortest time a worker can hope to secure a £100,000 salary, the research reveals – with workers in most other sectors having to work much longer before they can attain top pay grades.

However, the survey also found that pay inequality appears to be rife in the legal sector – particularly among law firms in London and South East England.

It found that while some firms were paying top salaries to many Partners and Senior Associates in certain practice areas, firms elsewhere were struggling to pay the National Minimum Wage (NMW) to trainees and paralegals.

The news comes at a time when separate research carried out by legal news website Legal Cheek suggests that a third of trainee solicitors are being paid less than the Law Society’s recommended minimum wage of £20,913 per annum.

Conveyancing firms hoping to expand in 2018

A new sector report suggests that a large number of British conveyancing firms are hoping to expand this year.

According to the latest research from the Council for Licensed Conveyancers (CLC), more than half (53 per cent) of firms are expecting a substantial increase in work volumes over the next 12 months, which will inevitably require a larger workforce to cope with rising demand.

Meanwhile, a further 10 per cent of firms are hoping to diversify and “branch out” into new or niche areas of work this year, the report shows.

CLC’s research indicates that confidence in the sector is strong – as evidenced by the fact that many conveyancers have also increased their prices and fees in the past year.

The report reveals that 48 per cent of firms increased their prices in 2017, in comparison with only four per cent of firms that decided to reduce their fees.

The average price charged for the purchase of a freehold property was £636, comparable with £592 for the sale of a freehold property. 

When handling a leasehold transaction, these prices increased to £747 and £690 for a purchase and sale respectively.

Commenting on the findings, CLC Chief Executive, Sheila Kumar, said the report generally “painted a positive picture” of the sector. 

Our legal sector specialist at Moore Thompson can provide a diverse range of tax and advisory services to solicitors and law firms. For more information about any of our services, please contact our team.

Law firm was negligent after failing to issue tax avoidance scheme warning

The Court of Appeal has ruled that a law firm was negligent after it failed to warn a client of the significant risks posed by a tax avoidance scheme.

Client, Iain Barker, was left with an £11.3 million tax bill following a successful challenge by HM Revenue & Customs (HMRC).

As a result, Mr Barker issued proceedings against Baxendale Walker Solicitors along with its founder, Paul Baxendale-Walker.

Initially, a judge concluded that the legal advice given was “probably correct”. The case was subsequently taken to the Court of Appeal which has now ruled that although the law firm was not negligent in its interpretation of tax law, the client should have been warned of the risk and the likelihood of an HMRC challenge.

The tax avoidance scheme involved the sale of shares in Mr Barker’s company. A scheme, known as an Employee Benefits and Shares Trust (EBT), was set up offshore. Company shares were then ‘gifted’ to the EBT. A sub-trust was also created with beneficiaries including members of the Barker family, although they would not have been able to benefit until Mr Barker’s death.

Court of Appeal judge, Lady Justice Asplin, stated in her ruling: “The lawyer as part of the legal advice he is providing, must evaluate the legal position and determine whether, in all of the circumstances, he should advise his client that there is a significant risk that the view he has taken about the substantive matter in question may be wrong.

“It would have been obvious to any reasonably competent solicitor practising in this area that there was a real risk that HMRC would take the post-death exclusion construction point at some stage and if necessary, would pursue it through the tribunal and court system,” she said.

Baxendale Walker Solicitors has since closed down and Mr Baxendale Walker was struck off as a solicitor in 2007. Last year he was fined after being found guilty of impersonating an official from HMRC in dealings with the Solicitors Regulation Authority.

Government is urged to limit fixed costs

The Government is being urged to revise Lord Justice Jackson’s recommendation to extend fixed recoverable costs, by limiting them to fast-track claims.

The calls for the Jackson proposals to be curbed, follows a survey carried out by the Association of Costs Lawyers (ACL).

Although 52 per cent of respondents said it was ‘fair enough’ to extend fixed costs across fast-track cases, they felt strongly that the proposals should go no further.

Arguing for a limit on fixed costs, many cited the fact that the costs budgeting process has improved significantly over the past 18 months

The survey also revealed that solicitors need to keep a tighter rein on costs and were putting themselves at risk of significant financial losses by not updating their budgets.

Only 5 per cent of costs lawyers said budgets were always observed; 65 per cent said they sometimes went over, while 29 per cent admitted they had clients who always exceeded their budgets.

The ACL advised that solicitors should be updating their budgets if required as the case progresses and said the survey points to the fact that the legal sector still has a long way to go.

ACL chairman Iain Stark said: “Costs lawyers know better than anyone that budgeting is becoming embedded in civil litigation and it will only keep on improving.

“It is true that many solicitors still need guidance but, with judges now far more confident in exercising their costs management powers, we are positive that it will make a real difference in controlling costs.

“That being the case, do we really need the upheaval and satellite litigation that fixed costs would cause as lawyers push for the highest fee available?

“They work on the fast-track because solicitors can cope with the ‘swings and roundabouts’ of having some cases that require more work and others that require less than the fixed cost allows. However, that calculation does not work with more complex cases.

“Costs lawyers have an interest in maintaining budgeting, of course, but as a profession we have worked hard to make the process work and, while there is still some way to go, we are proud of what we have achieved.”

Electronic Wills consultation closes

The Law Commission is preparing its recommendations to the Government, in respect of the introduction of Electronic Wills, following the close of a consultation exercise in November last year.

The consultation covered all aspects of making a Will, but crucially included questions relating to the making of Electronic Wills, which do not require the input of a qualified lawyer.

Law Commissioner, Nick Hopkins, told the Independent: “Making a will and passing on your possessions after you’ve died should be straight-forward. But the law is unclear, outdated and could even be putting people off altogether. Even when it’s obvious what someone wanted, if they haven’t followed the strict rules, courts can’t act on it.”

However, with the increasingly complex nature of modern families, there is doubt about the general suitability of the proposals. As more and more second marriages take place, for example, advice is likely to be needed on how to ensure a surviving spouse can benefit from property without jeopardising the inheritance of children from a previous relationship.

Equally, there are specific considerations for cohabitees and even those with relatively straightforward financial affairs may need advice on how to most effectively bequeath their estate in accordance with their wishes.

The Law Commission will publish its recommendations in spring 2018.

Equal pay row could trigger deluge of claims

The widespread incidence of gender pay gaps in both the public and private sector could trigger a deluge of legal claims.

The issue was first highlighted earlier this year when the BBC published a list of its most highly paid presenters and celebrities. 

Coupled with the Supreme Court’s ruling on employment tribunal fees, this could lead to an increase in unfairly paid employees seeking advice on their options for legal redress.

Following the introduction of tribunal fees in July 2013, the number of equal pay claims dropped by around a third.

The Supreme Court’s ruling, that employment tribunal fees were indirectly discriminatory and therefore unlawful, should not encourage claimants who believe they have a case to now pursue a claim.

Despite the fact that the BBC received such a negative press when the gender pay gap story broke earlier this year, it would appear that they are not the worst culprits. The BBC recently commissioned a report into pay differences throughout the Corporation and discovered a gender pay gap of 9.3 per cent – roughly half the national average.

Their data, if reliable, suggests that there are many more employees from other sectors, who have been unfairly discriminated against, which could lead to an upturn in legal claims.

New research reveals the majority of law firms are not ready for GDPR

A new survey has revealed that three quarters of law firms are still not ready for the EU general data protection regulation (GDPR) which comes into force in May 2018.

The survey of 150 IT decision makers in the legal sector, conducted by IT provider, CenturyLink, also found that one in five law firms admitted to experiencing an attempted cyber-attack in the last month and that less than a third of IT directors felt they were compliant with all cyber-security legislation

From May 2018, any firms found to be breaching GDPR rules will face hefty fines of up to €20 million or 4 per cent of their turnover.

In addition to fines, data protection failures could also be punished with sanctions by the Solicitors Regulation Authority.

The research suggested that use of the cloud by law firms could help improve data security as the technology is maintained by the provider.

Recently, in conjunction with ICARIS Sentinel, we hosted a GDPR seminar aimed at encouraging law firms 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.

We have also produced a myth-busting quiz which will separate fact from fiction and help explain the ramifications of the new regulations.

Landmark ruling could protect EU workers rights in the UK

A High Court landmark ruling may have significant implications for the agricultural and rural sector after it clarified the rights of both EU citizens and those marrying third-country nationals.

The case followed an attempt by the UK authorities to deport a man whose wife had dual Spanish and British nationality.

London’s High Court was asked to provide clarification regarding EU law and how it applied to the Algerian man who had been residing in the UK with his wife.

The Court ruled that the husband had a “derived” right of residence through his wife. After deliberating the case for five months, the judges stated that the Home Office had been wrong to refuse a dual British-Spanish citizen the right to have her Algerian husband live with her in Britain.

The European Court of Justice (ECJ) further ruled that the woman retained the right, under EU law, to a family life, and specifically, to have her husband live with her even if he was from a third country.

The decision means that EU citizens applying for British passports and those married or considering marriage to a third-country national, do not lose the right to bring a foreign-born spouse to the UK.

In recent months the agricultural sector has reported a reduction in the availability of EU workers.

The latest figures from the Office of National Statistics show that more than half of the change in net migration can be accounted for by a decrease in net migration of EU citizens which in August 2017 showed a significant decline of 51,000.

Although many EU citizens who are currently living and working in the UK remain concerned about their status post-Brexit, this recent ruling by both the High Court and the ECJ will go some way to clarifying an individual’s rights under dual citizenship.

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.