Newsletter – October 2020

From the CEO

Recent events have caused us, as a nation, to think differently about access to justice. Court closures, delays and new ways of working have made life uncertain for many lawyers and their clients. Technological solutions create opportunities as well as risks. And unregulated providers of legal services step in to fill gaps and meet client needs. The question of what it means to be a regulated lawyer – to be held to higher professional standards than our peers – has never been more significant. All eyes are on the future of legal regulation as we head toward 2021.

Earlier this year, Professor Stephen Mayson published his final report on legal services regulation. While recommending wholesale reform to the regulatory landscape, he accepted that this was unlikely in the short term, and felt that immediate smaller-scale changes were both necessary and possible. His report highlighted a risk of significant detriment from unregulated persons advising on costs issues without having the specialist, up-to-date knowledge and experience of an authorised Costs Lawyer. He also noted the risks from solicitors and barristers “dabbling” in the complex and specialised area of costs. He concluded that only authorised experts should conduct costs litigation.

Also in 2020, the Competition and Markets Authority returned to its legal services market study, originally conducted in 2016. In September the CMA issued a call for inputs, which will be used to assess whether sufficient progress has been made in implementing the market study’s recommendations. The CMA will consider Professor Mayson’s conclusions, including whether and how the growing unregulated sector should be brought into the regulatory tent, including in relation to costs work.

At the same time, the Legal Services Board has been developing a strategy for the legal services market, looking at the structure and scope of regulation and its ability to respond to future challenges. As part of this, the LSB will review the list of legal services that require regulatory authorisation: the so-called “reserved legal activities” list. As you know, conducting litigation and exercising a right of audience are on that list (and are activities that Costs Lawyers can carry out). Advising on costs is not currently on the list. Given Professor Mayson’s conclusions, we believe it should be.

These events create a unique opportunity for growth and change that could bring significant benefits to Costs Lawyers, their clients and the public. As always, we continue to engage and influence, to achieve the best possible outcomes in our part of the sector. If you have evidence or examples from your own practice that could help us do that, please contact us and share your stories.

Kate Wellington

CEO

Regulatory News

New guidance on referral fees and contingency retainers

We have recently updated our Guidance Notes on Referral Arrangements and Referral Fees as well as Contingency Retainers (Conditional Fee Agreements and Damages Based Agreements).

Take a look at the guidance on Referral Arrangements and Referral Fees if you use, or are thinking about using, arrangements under which you refer work to someone else or accept referrals from a third party. The guidance sets out when you can pay and receive referral fees and highlights issues that you should keep in mind.

While many Costs Lawyers will have experience advising on CFAs and DBAs, our updated guidance on Contingency Retainers looks at factors you should consider when entering into contingency fee agreements with your own clients, linking these to your professional obligations.

Using Third Party Managed Accounts (TPMAs) to deal with client money

We have published a new Guidance Note on Handling Client Money, which makes it clear that Costs Lawyers can take advantage of TPMAs to deal with their clients’ money, as long as they do so safely.

Under the CLSB Code of Conduct, Costs Lawyers are not permitted to handle client money directly. This rule is designed to protect clients while also relieving Costs Lawyers of the additional regulatory burdens that holding client money would attract. Our guidance has been updated to clarify when Costs Lawyers can and can’t receive money from clients, covering a range of practising arrangements.

The guidance also establishes that it is permissible, under the Code of Conduct, for Costs Lawyers to use a Third Party Managed Account (TPMA) to deal with client money. When using a TPMA, the client’s money is held by a third party on agreed terms, rather than by the Costs Lawyer directly.

If you think a TPMA could be a good option for you or your firm, please read the introductory advice in the Guidance Note before appointing a TPMA provider.

Practising fee confirmed

The practising fee for Costs Lawyers will remain at £275 for 2021, following approval from the Legal Services Board earlier this month.

We are conscious that COVID-19 is presenting unprecedented challenges for businesses across the economy. Against that background, we want to ensure that the practising fee is affordable and proportionate for all regulated Costs Lawyers. This is why we decided to maintain the practising fee at the current rate of £275 for 2021.

We would like to thank everyone who responded to our consultation on the fee. A summary of consultation responses can be found in our application to the Legal Services Board, which is available on the Legal Services Board’s website along with their decision.

Practising certificate renewals start next week

You will receive your application form to renew your Costs Lawyer practising certificate by email next week. Please set up [email protected] as a “safe sender” in your email account.

Completing your CPD in 2020

If you have not yet achieved your 12 CPD points for 2020, there are still two months left to do so. If you have booked a CPD activity that will take place before the end of the year, you can include this in your CPD record when applying for a practising certificate.

There is a list of free and low cost remote CPD opportunities on our COVID-19 advice webpage.

If you have been personally and exceptionally impacted by COVID-19 this year, and this has prevented you from achieving 12 CPD points, please read our CPD dispensation guidelines for more information about when dispensations might be available.

CLSB board is recruiting new Chair

We are currently recruiting for a new lay Chair of the CLSB board. The incoming Chair will replace Steve Winfield, who is due to retire early next year after seven years of service. Applications close on 1 November 2020.

If you know of a non-lawyer who is an exceptional leader and who would be interested in the role, please do share the Application Pack available on our website.

Spotlight on… being a lawyer with a disability

In this newsletter, we turn our spotlight on disability in the law. Professor Debbie Foster and Dr Natasha Hirst – founders of the research project Legally Disabled? – ask why disabled people are seemingly unexpected in the legal profession, and provide advice for Costs Lawyers on creating a culture of inclusion and access.

Data suggests that organisations already employ a significant number of disabled people who have chosen to conceal their identity. This suggests that talented and already productive disabled employees are likely under-performing and under-achieving because they fear requesting workplace adjustments. The profession is not only failing them, but there is an economic cost because their skills are under-utilised. Proactively creating an inclusive and welcoming workplace is key to encouraging disabled people to feel safe to discuss their needs with their employer.

Read More

Up and Coming…

Expect more from us shortly on:

  • CPD in 2021 and beyond
  • Look out for your practising certificate renewal form in your inbox
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