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CONFEDERATION OF SOUTH WALES LAW SOCIETIES
PRESIDENT’S REPORT - OCTOBER 2016 I left the drafting of this edition’s President’s letter deliberately late. Due to a printing hiatus, my musings for July did not make it into print. Rather, you were all treated to an illuminating article on the wonders of Pershore. I make it plain from the start that, erudite though that article was, it was none of my doing. Although I have visited the fair town of Pershore on several occasions in my youth, have visited their local swimming pool on one occasion and generally enjoyed the hospitality of this quaint market town, I cannot in honesty agree that it would be my choice of a holiday destination. However, others may well differ. Thus in truth I had left the drafting of the July version of this letter late. This may account for the aforementioned printing hiatus. However, I did want to include a first review on the Confederation party on 15th July. Sadly now this is somewhat ancient history in September, but the remains of what follows were my erratic thoughts in July, shortly prior to departure on holiday for 2 weeks There was at that point in July an end of term feeling in my office (my personal office I mean, not the office generally!), as I was due to depart on leave with 2 weeks in France to look forward to. Additionally, the weather had by then finally accepted the arrival of summer and we were basked in a mini heat wave if you recall. It is at times like that, with the temperatures nudging 30 degrees, that I can sit smugly in my office, turn the air conditioning down to a cool 21.5 and chill! Sadly, the forecast was temporary and a return to more usual summer weather duly arrived shortly thereafter! Still, I managed to enjoy it whilst it lasted. I duly attended the Monmouthshire Law Society ball at the Celtic Manor on 24th June 2016. This year it was held in the Augusta Suite of the golf club, rather than the main hotel, thought the event did not suffer for that. Once again it was a well attended, lavish affair, ably organised and executed by the Monmouthshire Society. Credit must go to Clive Thomas and all his team for another highly successful and enjoyable evening. 4
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I have already made mention of the Confederation party on 15th July. This was held in the more relaxed and informal setting of Llandaff Rowing Club, an organisation with which I have a passing acquaintance! The weather was not as kind as it could have been. Numbers were not as numerous as one had hoped. However, all who attended seemed to me to have a good night. My wife and I eventually called it a night at around midnight. We were not the last to leave with a group of hard core revellers still revelling. The pace was a hard one and seemed set to continue into the wee small hours. Oh to be that age and have that stamina again! My thanks to all our sponsors of the event without whose generous support we would struggle to run it. The Presidential diary was suspended over the summer holiday period. Alas, that is all but forgotten as the return to the daily grind has caught up with even the latest holiday makers in my firm. I was able to attend the Civil Update Day run by the Confederation at Cardiff City Football Stadium on 15th September. You always know when you have attended a worthwhile course when you come away having learnt something new. I learnt several new things from the array of first class speakers we were honoured to have attending that day. It was with a tinge of sadness that we witnessed the swansong at this event of H.H. Judge Seys-Llewellyn Q.C, DCJ for Wales. The DCJ has been a loyal supporter of this event since his appointment. His commentary from the perspective of the bench has been invaluable to local practitioners over the years. His contributions this year were no less erudite, entertaining and informative. I am sure that the chair for the day, Michael Imperato, will not object to me repeating his observation that it was worth the course fee just to hear the Judge speak, This was equally so this year. On behalf of the Confederation, I wish the DCJ well in the future and thank him most sincerely for all the support he has afforded the Confederation over the years. LEGAL NEWS
Other speakers were equally well received, including the inimitable Mark Harvey. Again well worth the course fee if you practice in PI and related matters. My warm thanks to all the speakers who made the day such a success. For Family and Criminal Law practitioners, we are once again holding our Update courses in October and I urge you to attend – Booking Form on pages 10 and 11. Although a little old hat now, but still current, the Brexit debate continues. I will end therefore with my observations, intended for the July edition, on this point as they remain worthy of inclusion I think. At the time of the May edition of this magazine, the Brexit referendum was on the horizon. What an outcome that brought. I will confess to being a staunch remain voter. I did struggle to understand the logic of the leave representatives prior to the event. I note that, subsequent to the event, they all appear to have resigned and cleared off! It is clear from the fallout from this event that a lot of what was spoken of as gospel has turned out to be significantly not. I struggle to understand how any person, politician or otherwise, can so bend and distort the truth simply to fit a political end and then think they will be taken seriously. Not only has this been shown to be the case, many people who voted to leave are now having second thoughts in the light of the revelations post-referendum. I did hear one interview with a leave voter who, when asked to comment on why they had voted to leave, was heard to reply “Well, I can’t stand that Cameron. It’s time we had a change from the Tories anyway.” I leave you to your own conclusions in the light of that comment! If people did not clearly understand the issue in the referendum, we have only the politicians to blame for that. Neither of the competing campaigns can claim any glory for the manner in which they were conducted. The resulting mess is a true testament to that shambles. The subsequent political fall out has been both quick and breath-taking. We already have a new Prime Minister.
I wish her well in what will be some of the most testing times in recent British history. Am I the only one to appreciate the shrewd move of appointing Boris Johnson as Foreign Secretary? Being a cynic, I have imagined the conversation behind closed doors at number 10: Theresa May: Right Boris, you got us into this mess so you can get us out of it. I’m appointing you Foreign Secretary so you can sort out the Brexit deal. Johnson: Ahh... er... well... I don’t know that this is really my cup of tea Prime Minister. Thanks awfully and all that but.. May: Oh no matey, you don’t get away with it that easily! Your name’s not Farage is it? You engineered this, you sort it. And no, I’m not going to accept your resignation when the going gets tough Well, one can dream cannot one? In truth, the political landscape has changed beyond recognition in almost the blink of an eye. For the Profession, this may well be a good thing, several initiatives being shelved at least temporarily if not permanently in the fall out that has ensured. I will shed no tears for the loss of Nigel Farage, though I suspect we will rue the day that David Cameron exited stage left at least as far as our representation on the world stage is concerned. The current political disintegration in the Labour party makes the Brexit fight in the Conservatives look like a children’s squabble. More is yet to come there I fear! In truth, we live in very interesting times. I am sure there are more twists and turns to come on all this in the future. The Brexit process is likely to be more akin to death by a thousand cuts than a quick exit, but the people have spoken. We are a democracy. We must now put our efforts to making work that which our democratically elected representatives have been told to do. I will watch the process with interest! In the cold light of day, I trust you all enjoyed a peaceful and relaxing summer break. n Jonathan Hine JonathanH@jacklyndawson.co.uk
CARDIFF AND DISTRICT LAW SOCIETY
PRESIDENT’S LETTER I have had a busy but enjoyable first few months in my role as President of Cardiff and District Law Society since taking up office in May. My first major event was a very successful and well attended Managing Partners’ and Directors’ lunch in June sponsored by Lloyds Bank and AON. We discussed some of the key issues affecting the profession and business generally over lunch including Brexit, access to justice, the growth and importance of technology to the profession, uncertainty in relation to the regulatory regime and increased competition. Hopefully everyone who attended enjoyed the lunch and found the discussion of interest. Since then I have had a very productive and positive meeting with the local JLD Committee. If the Society is to thrive in the future we need to engage effectively with our young lawyers as they are the future members, Council Members and Presidents of the Society. I was impressed by the enthusiasm and commitment of the JLD to the profession. We are planning to work together on a number of initiatives including launching a new bursary/ award for excellence for young lawyers within the region to be presented at the Annual Dinner in May, a ceremony for newly qualified solicitors in the Autumn to recognise their achievement in qualifying (see page 9) and a young professionals networking event aimed at young professionals from across the region. In early September the Society organised a free fitness open day for members at EazyGym which went down well. I hope that we will be able to repeat the event later in my year – perhaps just after Christmas! I also provided material for an article on the legal profession in Wales which appeared in the August/September edition of Wales Business Insider. I have also held several meetings with sponsors and had a very useful meeting with Leighton Reed, the current President of the South Wales Society of Chartered Accountants to discuss matters of mutual interest to our respective professions in the region. This edition of Legal News may reach 6
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you just before our Quiz and Curry night at the BT Sports Cardiff Arms Park on 13 October. The event is being sponsored by compare-ATE and is in aid of my two charities for the year -#staystrongforows and Velindre Cancer Centre. Rick O’Shea is our host for the night. Rick is a fantastic presenter and celebrity speaker and is superbly entertaining. I am sure it will be a lot of fun and hopefully we will raise a considerable amount of money for two great causes. I hope you can make up a Team – details on page 19. On the wider picture, the legal and economic environment continues to be challenging for the profession. Brexit and its implications will of course dominate the news for the foreseeable future. There remains a considerable amount of uncertainty about how the result of the referendum will be put into practice. The shape of the UK’s relationship with the rest of the world may not become clear for months or years to come, particularly given the necessary secrecy of the negotiations. On current projections the UK will not trigger Article 50 of the Treaty for the Functioning of the European Union until 2017 meaning the Brexit date would not be until 2019 at the earliest. We are therefore in a type of “phony” war at the moment and will be for some considerable time to come. I recently attended a Law Society Brexit Roundtable Meeting at the Law Society Office in Wales hosted by Robert Bourns, President of the LEGAL NEWS
Law Society. The message from the Law Society is that the UK remains open for business, the English common law is still and should be the law of choice in international commerce and England and Wales is the most attractive jurisdiction for the resolution of disputes. The Law Society anticipates that there will be a surge in demand for legal expertise and guidance post the referendum. There may indeed be more advisory work for solicitors in the short to medium term. However, there could potentially be less transactional work particularly as anecdotally many commercial and property transactions have been put on hold for the time being. Uncertainty is never good for business and neither is it for the legal profession. Another pressing issue at the moment is the recent proposal from the SRA on future regulation of the profession. On 1 June the SRA released consultations on Looking to the Future: Flexibility and public protection and Looking to the Future: Accounts Rules Review. The consultations review the regulatory framework for solicitors and firms and make a number of proposals, including that the Solicitors’ Code of Conduct be replaced with two separate, shorter and simplified codes: a code for solicitors and a code for firms. The concern is that these proposals are likely to create consumer confusion and harm, will not address the actual unmet legal needs in the market, nor assist with access to justice. Cardiff and
District Law Society has responded to the consultation on behalf of our members. A copy of the response has been placed on the CDLS website in the Members’ Section. Enid Rowlands and other members of the SRA Board will be coming to visit Cardiff on 12 October at the invitation of the Society. This will be an ideal opportunity for members to quiz our Regulator on its proposals for the future of the profession and any other regulatory issues. I am hoping for a good attendance at this event and some vigorous discussion. This event will be held at the Radisson Blu Hotel, Bute Terrace, Cardiff CF10 2FL, from 4.30pm to 7.30pm; please let Michael Walters (michaelwalters1@ hotmail.co.uk or 07774 756297) know by 10th October if you would like to attend. Watch out for future events in the pipeline for the Society. This will include our very successful and popular Children’s Christmas Event sponsored by Synergy Costs Limited, a Five-a-side football competition and a programme of seminars/workshops on compliance as part of our new training offering for the membership. As ever if you have any ideas or suggestions on how we can improve our services to our members or if you would like to get actively involved in the Society please do not hesitate to contact me at paul.hopkins@ geldards.com. n Paul Hopkins paul.hopkins@geldards.com
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FEATURE
The Wales Bill – What does it mean for You? The Wales Bill currently before the United Kingdom Parliament raises many complex and hotlydiscussed issues of constitutional law. This article does not aim to address those! Instead, it aims to set out, in factual terms, the main implications of the Bill for readers: As citizens of Wales; As tax-payers; As lawyers and business-people. The Bill could, of course, still change
legislate for a Land Transaction Tax (=
For planning lawyers, it is also worth noting
ness”, let alone considerations of
during its passage through Parliament.
Stamp Duty Land Tax) and a Landfill Tax,
that the Bill would transfer power over
effectiveness or enforcement.
References to the Bill and the Explanatory
and power to vary the rate of income tax
development associated with electricity
Notes are to the version introduced in the
in each tax-band (but not the bands
generating projects above 350MW from
The Bill defines “the private law” as
House of Lords on 13/9/16.
themselves, or allowances or reliefs).
Welsh local planning authorities to the UK
“the law of contract, agency, bailment,
Secretary of State (clause 37).
tort, unjust enrichment and restitution, property, trusts and succession”.
What does the Bill mean
The Bill does make one change in
for you as a citizen?
relation to tax – but to process, not
The civil law itself
The headline is that the Bill would allow
substance – removing the requirement
The Assembly can, currently, change the civil
Family law
the Assembly to make potentially radical
for a referendum before the Assembly
law, as it applies in Wales, provided that:
Family law and family proceedings are
changes to itself, and the way it is elected.
could vary income-tax rates.
• the purpose of the change addresses
reserved matters. They are also outside
one of the “subjects” listed in Schedule
the Assembly’s competence at present.
The Assembly would gain legislative competence over the number of Members;
What does the Bill mean for you as
7 to the Government of Wales Act 2006
However, the Bill appears to remove the
boundaries and numbers of Assembly
a lawyer and a business-person?
(GOWA), or
Assembly’s current competence to legislate
constituencies and regions; the franchise
As you would expect, this constitutional
• the change is consequential on, or
on welfare advice to courts, representation
– who is entitled to vote; and the method of
Bill does not make any changes to the
incidental to, another provision that
etc for children ordinarily resident in
voting (e.g. first past the post or some form
rights or obligations of private actors. It
relates to one of those subjects, or
Wales and their families, and Welsh family
of proportional representation). Assembly
is essentially concerned with the powers
• the change enforces a provision of
proceedings officers (see paragraphs 174-
legislation on these matters would require
of the Assembly and of the Welsh
that kind, or is appropriate to make such
177, proposed new Schedule 7A to GOWA).
a “super-majority” to pass - at least two-
Government. However, at least some
a provision effective.
thirds of all Assembly Members, i.e.
of these new powers will eventually
currently 40 (clause 9).
translate into new laws for Wales, on
This is the cumulative result of section
competence over adoption, apart from
Currently,
the
Assembly
has
full
which you may wish to offer advice.
108(5) of GOWA and the judgment of
inter-country adoption. Under the Bill, it
One legal issue which will arise is the vexed
Moreover, the new powers are likely to
the Supreme Court in the case of the
would appear to have competence only
question of votes for prisoners, on which
mean more divergence between the
Agricultural Sector (Wales) Bill ([2014]
over the narrower concept of “adoption
point the UK is currently in breach of the
law applicable to England and the law
UKSC 43).
agencies and their functions” (with the
European Convention on Human Rights
applicable to Wales - which should mean
(see Hirst v UK [2005] ECHR 74025/01).
increased opportunities for lawyers with
The position under the Bill is almost the
a sound knowledge of both.
same, but may mean slightly narrower
continued exception of inter-country adoption).
competence for the Assembly. The
Timing of the proposed changes
about proposed changes to Parliamentary
The principal new areas of powers for
Assembly would be able to change
These can only be guesstimates, but
constituency boundaries, with Wales
either or both the Assembly and the
what is described as “the private law”
Royal Assent could be expected by
looking likely to lose around 25% of its
Welsh Government relate to elections
(see para. 3 of proposed Schedule 7B
spring 2017, with most of the new
MPs. As a result of the Parliamentary
to the Assembly (mentioned above) and
to GOWA, to be inserted by Schedule
powers coming into force about a year
Voting System and Constituencies Act
local government in Wales, sewerage,
2 to the Bill) so long as the purpose of
later, perhaps around the start of the
2011, Assembly constituency boundaries
onshore wind-power, other electricity
the change did not relate to a reserved
financial year 2018.
will no longer change automatically
generation (on and off-shore), various
matter (as listed in proposed Schedule
if
transport matters, e.g. speed limits,
7A to GOWA, to be inserted by Schedule
A small number of new powers under
marine licensing, ports and harbours.
1 to the Bill).
the Bill are due to come into force
Parliamentary constituencies in Wales
However, the Assembly would also lose
Supreme Court case-law has established
by the UK General Election scheduled
some powers as a result of the Bill.
that the purpose of a provision will not
for 2020, even if the Assembly does
The extent of these losses is a matter
“relate to” a reserved matter if it has only
Of course, a UK General Election before
not pass legislation changing its own
of dispute, due to the complexity of
a “loose or consequential connection”
the Bill has been passed – perhaps
constituency/regional boundaries.
comparing
devolution
with that matter (see, notably, Imperial
to obtain a mandate for a Brexit
settlement with the regime that would
Tobacco Ltd v the Lord Advocate
negotiating position - would mean that
What does the Bill mean for you
be introduced by the Bill. However, in
([2012] UKSC 61). So the Assembly will,
the Bill fell. Such are the pleasures of
as a tax-payer?
some areas, the reductions appear
effectively, retain the ability to change
lawyering in a political context! n
Essentially, no change. The Bill does not
fairly clear – for example, removal of
the private law in “consequential”
give the Assembly any new tax powers
the ability to modify employment law in
ways. It is more difficult to say whether
Elisabeth Jones
in addition to those conferred by the
a devolved context, and a shrinkage in
“consequential”, in this context, will
Chief Legal Adviser
Wales Act 2014, i.e. competence to
competence over adoption law.
encompass the concepts of “incidental-
National Assembly for Wales
There has been a lot in the news recently
Welsh
Parliamentary
ones
do.
Therefore, we appear likely to see
earlier, e.g. the power for the Assembly
non-alignment between Assembly and
8
OCTOBER 2016
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the
current
to change its own name.
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ADMISSIONS CEREMONY
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Cardiff & District Law Society will be holding an Admissions Ceremony for all those solicitors practising in Cardiff & District who have been admitted to the Roll during 2015/2016. We hope that the evening will give you an introduction to the Society and the benefits of being a member, as well as providing an opportunity to network with contempories and members of the Society’s Council. All newly-admitted solicitors receive free membership to the Society for the first 2 years after their admission and the Society would like to take this opportunity to mark your entry to the
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profession. The evening will be held at The Park House, Park Place, Cardiff at 6.00pm on 2nd November 2016. If you would like to attend, please contact Michael Walters, as below, with details of your date of admission. n Michael Walters Cardiff & District Law Society DX 33029 Cardiff 1 michaelwalters1@hotmail.co.uk.
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FEATURE
Costs management – has it done what it said it would do on the tin? This is part one of a two-part summary of the talk given by Stephen Averill, Phoenix Legal Services, at the Confederation Seminar on 15th September 2016. Costs management was intended to assist the parties and court in controlling costs. The regime expects both parties to prepare and manage budgets throughout the life of multitrack cases and the losing party has the pleasure of picking up the cost of this together with their own costs. Incurred work will not be managed by the process as that is not its purpose. The purpose is to look at the work anticipated to be carried out. The parties have a duty to consider each other’s budget, attempt to agree them and then prepare a Budget Discussion Report. The parties then attend court and time is spent arguing about the un-agreed phases of the budget. Whilst this process is meant to be light touch there are a
12
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lot of inconsistencies with the court’s approach. So savings achieved on the phases are likely to be cancelled out by the increased time spent getting them approved. Sometimes though the fight is worth it as a party’s unreasonable budget will be reduced significantly but by and large it just becomes an added expense to the litigation. One of the key outcomes of the Jackson reforms was the anticipated reduction in detailed assessments. In 2012, during the pilot scheme, HHJ Simon Brown QC (a proponent and keen advocate of costs budgeting) presided over the case of Safetynet Security LTD -v- Coppage ((2012) EWHC B11). Having given judgment
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for the Claimant, he stated that since their costs were within the budget approved by the court, a detailed assessment would be an unnecessary and expensive course of action to take. Costs were awarded in the Claimant’s favour for the amount of the budget. Shortly after the Jackson reforms came into play on 13th May 2013 and the case of Slick Seating systems (1) GL Events SA (2) -v- Adams (1) Leamark Ltd (2) LA Structures (3) Jones (4) – another matter which made it to Trial before HHJ Brown QC and in which the same approach was adopted. Costs were again ordered as per the budget without further argument, either in front of the Judge
or at a future detailed assessment hearing. The impact of these cases was felt throughout the costs profession as it was seen as a benchmark for future cases which would be settled without there being a need for a detailed assessment. Fast forward three years and the reality, however, is rather different. Lord Justice Briggs in his final report from the Civil Court Structure Review said that the recent introduction of costs management appears unlikely to have the hopedfor effect of reducing the number of detailed assessments. As was reported on the website Legal Futures in July of this year he went on to
FEATURE say: “I am, however, now advised by the Senior Costs Judge that a sufficiently discernible trend is emerging, which points depressingly away from a conclusion that any such reduction in detailed assessment is likely to occur.” Briggs LJ identified three reasons for this outcome: • Costs management only fixes the future costs from the time of the case and costs management conference (CCMC), leaving the costs incurred before then still requiring detailed assessment after trial. “This implies no criticism of the CCMC process, which would be hopelessly unwieldy if costs already incurred needed (otherwise on an exceptional basis) to be subjected to a form of after the event adversarial review”; • “There are a substantial number of cases where reasons (which cannot be dismissed as fanciful) are advanced for departing from the court-imposed or agreed budget”; and • Most cases settle before trial, but not at some convenient date which coincides with a completed phase of work for which costs have been budgeted. “The result is that large parts of the work remain subject to detailed assessment in the absence of a budget which neatly fixes their amount.” Lord Justice Jackson’s big picture view of multi-track cases was that these would be managed effectively and efficiently throughout a budgeting process. This process would lead to certainty between the parties and ultimately would lead to a significant reduction of cases that would have to be assessed by the court. A sensible and sound vision you would think. Time has taught us that this was really a grab at utopia. Of the cases that are issued and enter into the costs management process, a small percentage will settle or be discontinued before the court is able to make any Costs Management Order. The court will not have given any view on the budgets even if these had been prepared before settlement. Cases that get through the first CCMC will be subject to
Costs Management and the parties’ budgets will be approved by the court. The vast majority of cases will be concluded between the date of the CMO and the start of the trial. The successful party will then prepare a bill of costs breaking the work down into the various phases showing separately the costs incurred to the date of the approved budget and those costs subsequently incurred after the budget was approved. The bill of costs could therefore consist of a great many parts. There are 11 phases if you include Mediation; more if the court has approved any contingent phases and a number of the phases will have incurred and estimated costs in them. A rather small percentage of cases make their way to trial and the successful party will usually be awarded the costs of the action. So, will the court then assess those costs summarily based upon the budget? Very unlikely as practitioners’ understanding of the new rules has grown and new challenges have been formulated. The main reasons a court will not determine the costs at the end of the trial is that it will not have dealt with the incurred costs at the time the CMO was made nor will it have made any decisions on the hourly rates being claimed. So we are back to the process of drafting a phased bill in perhaps 8 to 22 or more parts. Changes in the way the case was funded will require separate parts. This turns the bill into a bit of a monster, not just in terms of size but also in terms of the cost to prepare. The receiving party must also prepare a Precedent Q document which summarises and compares the costs claimed in the bill against those from the budget. What both sides need to realise is that the litigation process has actually become more expensive despite the reforms’ aim of managing and reducing costs. n This article will be continued in the December issue of Legal News. Stephen Averill Director Phoenix Legal Services LEGAL NEWS
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FEATURE
Environmental Due Diligence for Commercial Transactions With all commercial property transactions, limiting clients’ exposure to the contractual or other legal risks relating to the purchase is paramount. 2. Confirmation of current use For commercial searches Google Earth and Streetview are reviewed to validate or query current land uses as these can have implications on report outcome, for example, finding refuelling pumps in garages. 3. Historic & Operational Risk Residential searches only consider historic risk, on the principle that they are now living accommodation. Commercial searches have to consider operational risk. This is a key consideration in the “Environmental Damage Regulations” risk assessment, which involves much more analysis and time.
This includes the consideration of any possible environmental risks or damage relating to the site or property, such that they can be managed appropriately both at point of transaction and in future in order to maximise the value of the investment. From a lawyer’s perspective, such analysis is critical in order to demonstrate that proper due diligence has taken place. Environmental issues that are identified at a later stage can prove costly, therefore applying strict rules relating to environmental analysis and due diligence at the outset is key to effectively managing transactions for all parties. Today, with more and more data available electronically, the way in which we can research environmental risk is evolving. Environmental searches were originally brought to market to 14
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help solicitors comply with the Law Society’s warning card on Contaminated Land (Part IIa Environmental Protection Act 1990). Times have however changed and now we have greater access to a wider range of environmental data, which although outside of the Part IIa, could still impact the purchaser’s decision to proceed with the transaction. Typically, lawyers should consider contamination risk or pollution, including radon, as well as analysing multiple categories of flood risk, ground stability and subsidence and any large-scale infrastructure projects in the vicinity of the site. One significant change in the market is the option for lawyers to access ‘all-in-one’ environmental search reports. Uniquely, Landmark Information Group now offers a report (RiskView Commercial) that combines a traditional PDF analysis and maps pinpointing risks along with LEGAL NEWS
an interactive online portal, which displays all of the required data more clearly than ever, helping to ensure efficient workflow and properly informed decisions. Having the ability to assess multiple risks from one report offers peace of mind, plus it provides a new level of consistency for practices who wish to apply standardised due diligence on all commercial transactions, via one fixed-price environmental assessment service. While searches for all property transactions are evolving and improving, there remain notable differences between residential and commercial reports: 1. Site boundaries Residential searches can be based on a buffered point geometry, whereas commercial sites are always based on the site boundary, which means a larger and more complex area is analysed.
4. Search Radius Typically search areas are larger for commercial searches; the logic of why is to accurately determine the sensitivity of a site. Residential site sensitivity is generally always high given the land use, however commercial is open to definition. Therefore the required search area for the presence of water abstractions, for example, is 1km. 5. Extended Timeframes Necessary consideration of site area, current and intended use and wider examination of environmental data means that assessing environmental risk for commercial sites is more complex and time consuming than residential searches. This is to ensure the correct interpretation and professional opinion regarding contamination liability is fully achieved. www.landmark.co.uk
FEATURE
The SRA Risk Outlook 2016/17 Around July every year, the Solicitors Regulation Authority publishes their Risk Outlook for the year ahead. It focusses on what the SRA see as the priority risks facing the sector and the public, and can be quite a mixed bag. It also outlines what they would be concentrating on in any regulatory dealings they may have with firms. This year is not much of a departure from previous years, with only one new risk identified. How can a firm use the Risk Outlook? In the first instance, we’d normally ask a firm to hold a mirror up to itself, and then examine its operations, policies, procedures, client and employee data, to see whether it has gaps in any of these that could expose it to one or more of the risks identified in the Risk Outlook. Once that’s done, the next step would be to develop a response plan. Whether there are gaps or not, it’s usually a good idea to have some notes that explain why there weren’t any risk gaps (which would be unlikely for most firms). The usual nominee for this activity in a firm would be the COLP and/or COFA, as the risks can be closely related to the SRA Code of Conduct. One thing is certain, and that is, in the current legal services market place, firms cannot be complacent about any type of risk, but in particular those identified by its regulator… So what are this year’s risks? The SRA identified 7 risks in its 2016/17 Outlook, the numbers below don’t indicate any prioritisation regarding one risk over another; 1. Lack of Access to Legal Services 2. Standards of Service and considering Vulnerability 3. Information Security 4. Independence and Integrity 5. Protecting Client Money 6. Money Laundering 7. Diversity 16
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1. Lack of Access to Legal Services This is the new risk identified by the SRA for the coming year. It stems from one of the headline points in the document “Only a third of people with a legal problem seek professional advice. And only 1 in 10 will take advice from a solicitor or barrister.” While there appear to be multiple barriers referred to in the Outlook, the SRA believe evidence suggests that cost is one of the biggest barriers. 2. Standards of Service and considering Vulnerability This is an evolution from a risk identified in last year’s Outlook, where the SRA have considered the risk in their role as a protector of consumers. If a legal firm client is vulnerable, then a poor standard of service can have an even more profound effect than for a client that is not vulnerable. It is therefore even more important that a vulnerable client is identified as soon as possible in any interaction with a solicitor to ensure that an appropriate service level can be agreed at the outset. 3. Information Security In this version of the Outlook, Information Security has been combined with bogus firms, both of which continue to be a threat to the sector and to the UK economy as a whole. The Information Commissioner’s Office is quoted saying that “Solicitors are at risk of data loss due to their reliance on paper files containing highly sensitive information. Security of paper-based systems is always limited: paper can be lost, requires archiving and cannot be encrypted.” Of course, this is not the only risk LEGAL NEWS
around information security, as criminals become more and more sophisticated in their attacks on computer systems or become adept at impersonating institutions over the phone, resulting in the so called “Friday afternoon fraud.” 4. Independence and Integrity More than anything else, independence and integrity is central to the rule of law, and from the SRA perspective, damaging to the interests of consumers and the public if a firm does not maintain either. The SRA see trends for either independence or integrity being compromised in litigation and corporate law. For litigation, Personal Injury, a long time risk area for Legal Services, is seen as a particular problem area, while for corporate law, concerns feature around clients seeking to impose terms onto firms, which can seriously restrict the firm’s freedom to act. 5. Protecting Client Money For this risk, the SRA state that the number of law firms who misuse client money is low, however the impact where it is misused can be disproportionally high and therefore law firms should have considered, detailed protections to ensure client money is safe. What some firms may not realise is that a failure to protect client money can have an effect on the overall sector by forcing higher contributions to the Compensation Fund, something that benefits nobody, and may lead to increased cost and a bigger barrier as outlined in 1 – lack of access to legal services. 6. Money Laundering Money Laundering is a mainstay of risk for the SRA and the sector, and is
nothing new, however the Risk Outlook seems to suggest a complacency in law firms on the subject, with The UK’s National Risk Assessment highlighting that there are knowledge gaps about the sector’s role in money laundering. Couple that with the NRA noting that the number of Suspicious Activity Reports (SARs) from the legal sector has fallen every year since 2007, and the SRA seems to have grounds for concern. 7. Diversity Much like money laundering, Diversity is not really a new entrant into the Risk Outlook, but rather a perennial risk that reoccurs but with different emphasis from time to time. As a profession that deals with all walks of life, the SRA as a regulator encourages legal firms to represent the communities it serves and recruit the best available talent in order to do so. Research on the subject seems to show that firms are not as diverse as they could be, and no doubt this will feature in future risk outlooks as an area for continual improvement. Given that the SRA intend to introduce a new code of conduct, now might be an appropriate time to review, as suggested at the start of this article, your firm’s systems, policies, procedures and data to see where you are against these risks, and take appropriate action where necessary. n Paul Jones cpm21
EDUCATION
St John’s College: The Best A-level Record in Wales over 17 Years Engineering (Imperial College), History and Economics (London School of Economics), Law (Bristol and King’s College London), Maths (Imperial College), Medicine (Cambridge and Oxford), Music (Bristol and Oxford) and Politics and International Relations (London School of Economics), for example. St John’s College is celebrating outstanding A-level results again this year, with 81.9% A* / A grades, 96.6% A* / A / B grades and 100% pass rate. Its sixth-formers, including a significant number with 4 A* / A grades, are proceeding to Oxbridge and top Russell Group universities, including medical and dental schools.
Throughout the school there is an extensive and varied sports programme, a wide range of extracurricular clubs and societies, with ample opportunity for drama, performance and public speaking,as well as established high-level career and volunteering opportunities.
St John’s College is frequently ranked top school in Wales in The Sunday Times ‘Parent Power’ based on combined A Level and GCSE performance. Its most recent Estyn inspection report graded the school ‘excellent,’ including the seldom-awarded ‘excellent’ grade for quality of teaching, and observed that the school achieves ‘exceptional outcomes for pupils of all abilities’ (Crown Copyright, 2012).
St John’s College has an enviable musical reputation. A remarkable number of its maths and science students proceed to medical school and the most competitive university courses and arealso grade 8 and diploma-level musicians. One of its oboists, Morgan Foley, obtained the highest mark in WJEC Further Maths (600/600) and is now studying Physics at Trinity College Cambridge. The St John’s College Sixth Form Open Evening will take place on Tuesday, 18th October, from 5.30pm to 7pm.
The school has a very distinguished record of success in university admissions. Its most recent sixth-form cohorts are studying Architecture (Cambridge), Biology (Oxford), Dentistry (King’s College London), Economics (Cambridge),
The St John’s College Sixth Form Open Evening will take place on Tuesday, 18th October, from 5.30pm to 7pm. Please contact Admissions to book your place: 029 2077 8936 or admin@stjohnscollegecardiff.co.uk n
NEW IT SOLUTION FOR HUGHES JENKINS IN PARTNERSHIP WITH LEAP LEGAL Gwent solicitors Hughes Jenkins have just completed the installation of a new integrated IT solution in partnership with LEAP Legal. Hughes Jenkins Finance Director Nigel Jenkins commenting on the new system said: “Due to a significant increase in business volume, we recognised the need for a comprehensive system to further increase the efficiency of our client relationship management activities, whilst at the same time integrating the work of our lawyers across a number of offices. The product supplied by LEAP Legal offers this to us and more and we are delighted with the outcome that we have achieved. “
within their team, the practice clearly understands the importance of innovation and utilising technology to provide a highly effective and affordable service to their clients. At LEAP we like to help the lawyers who help people, we look forward to many years working alongside Hughes Jenkins Solicitors helping them to develop the firm, achieve their ambitions and support their continued growth.” For more information, visit www.hughesjenkins.co.uk or www.leap.co.uk. n
LEAP UK New Business General Manager John Espley commented: “At LEAP we love to build successful partnerships with ambitious law firms such as Hughes Jenkins Solicitors. Alongside the wealth of experience LEGAL NEWS
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CHANCERY LANE
CHANCERY LANE NEWS It was all change for the meeting of the Law Society’s council on 15 September. We had a new team of office-holders before us as this was the first council meeting Robert Bourns chaired as president of the Society. He was joined by Joe Egan, the new vice president and Christina Blacklaws, the new deputy vice president. We met at a new venue - the auditorium at the Institute of Chartered Accountants in England and Wales (ICAEW) - because building works are being carried out at Chancery Lane to make the roof above the council chamber safe. And for me, there was a new journey to Paddington as the train was routed through Gloucester because the Severn Tunnel is closed so the line can be electrified. This made for a long day as I usually travel to London and back on the day of the council meeting to save the expense of an overnight stay in a London hotel. ICAEW hall has a double door entrance. That’s appropriate because it means there is double entry to the headquarters of the accountants’ professional organisation. That observation cheered me up as I arrived, late, at the meeting. The business of the meeting was not so cheerful. It concentrated on the Law Society’s governance and its “value proposition”. These two subjects are important because of the uncertainty surrounding the regulation of legal services and the future of professional practice. That uncertainty is caused by the government and the Competition and Markets Authority (CMA) reviewing legal services and their regulation and the coincident posturing of the Legal Services Board (LSB) and the relentless reform agenda of the Solicitors’ Regulation Authority (SRA). On 12 September, the LSB published its paper A Vision for Legislative Reform of the Regulatory Framework for Legal Services in England and Wales. It is a vision of doom. The LSB’s nightmare vision is composed of 6 ingredients: • A single consolidated regulator which, one assumes, would be the LSB; • Revision of the regulatory objectives 18
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- the LSB says there should be an overarching objective to safeguard the public interest with the possibility of further secondary or subordinate objectives; • An independent and risk-based review of the regulated activities which would add services such as immigration advice which are not reserved activities but are viewed as legal services to the regulated activities; • The premise that regulation should be based on activity rather than professional title and the award of professional titles should not return to professional bodies because the LSB fears this may lead to ‘gold-plating’ of entry standards, less competition, less consumer choice and a rolling back of liberalising reforms; • Independence of the regulator(s): the LSB considers that regulation should be structurally, legally and culturally independent of the professions and government and the legal services regulator(s) should be accountable to Parliament with a role for the National Audit Office in scrutinising regulation; and • Greater prominence for consumer representation - there should be a general duty on the regulator(s) to consult and engage with consumers to help promote a consumer-focused regulatory culture and there should be an independent sector-specific consumer voice to ensure consumer representation (such as the LSB’s consumer panel). The CMA published its interim report on the supply of legal services in England and Wales in June. Its preliminary view is that there are no grounds for a full market investigation of legal services. The Law Society responded to the CMA consultation in mid August. The CMA is due to publish its final report by 12 January 2017. Meanwhile the deadline for responding to the SRA’s consultation on the Handbook and Accounts Rules which LEGAL NEWS
it calls Looking to the Future: Flexibility and Public Protection expired on 21 September. The Law Society responded to the consultation with two weeks to spare and has encouraged local law societies, including Cardiff and District, to respond. Cardiff and District’s response to the SRA consultation should shortly be available on the website. However, it is clear that, as the UK disengages from the European Union, with the consequent constitutional and commercial uncertainty which will result, it is inopportune to dismantle a regulatory framework which works, broadly speaking, simply because our profession’s regulator wants more power, at the expense of our professional body and the overarching regulator, and the overarching regulator wants a monopoly of legal services regulation. One can’t help thinking that the reason why the LSB and the SRA are so keen to promote the interest of consumers is because they are so keen on consuming the authority and legitimacy of rival regulators and professional bodies! If the regulatory landscape is reformed, it is possible that the Law Society’s funding through Legal Services Act 2007 s 51 will be jeopardised. The Society’s “value proposition” project (apologies for the foul management speak, but this is what they call it) is researching what members expect and want from the organisation in order to refocus the Society on delivering the services and support which its members want and value. This will be valuable for the Society if it has to charge a membership fee to its individual and firm members. The discussion on governance review concentrated on the membership of the proposed main board and the possible limitation of a council member’s continuous service to 3 consecutive 4 year terms. These matters will be decided upon at the next council meeting. I haven’t reached a firm view
on either issue. I am currently serving my third consecutive 4 year term and I am not going to stand for election for another term. However, that is a personal decision. I have no doubt that others will want to stand for a fourth or fifth term and will remain useful contributors to the council and the statistics back this statement. I have been a member of the council for 10 years; 27 others have served for longer than me (including the deputy vice president) and 3 others have served for as long as me (including the vice president). I will finish this column by referring to two recent deaths of local solicitors. Romano Ferrari’s death, was not unexpected as he had suffered from a serious disease for several years. Two years ago the illness cruelly robbed him of his sight. Romano was a distinguished, respected and popular criminal defence lawyer and advocate who had taught law at Merthyr College and had been a member of the Cardiff University test board for the police station representative accreditation scheme. He will be grieved for and missed throughout the South Wales legal community. Alison Farr-Davies died in very sad circumstances in Swansea sometime between 11 - 13 September. Alison was the daughter of John Farr-Davies, who practised in Carmarthen, and she studied for her LPC at Cardiff University in 1996-97 and practised in criminal defence. She worked at de Maids in Cardiff, in Bournemouth, and was working as a consultant for a firm in London at the time of her death. She was a charming girl who smiled a lot throughout the LPC and her death is tragic and dreadful. The solicitors’ profession was lucky to have Romano and Alison within it and the profession is poorer without them. n David Dixon Twitter: @saldixie