RWG 2004/2/1
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REGULATORY FRAMEWORK FOR LEGAL SERVICES IN
SCOTLAND
1. This paper surveys the regulatory
framework for legal services in Scotland. It focuses mainly
on legal services provided by solicitors, solicitor
advocates, advocates and conveyancing and executry
practitioners.
Statutory remit of Scottish Ministers
2. In Schedule 5 to the Scotland Act
1998, Head C3 reserves Competition to the UK Parliament,
subject to an exception which specifically devolves
responsibility for "the regulation of particular practices
in the legal profession for the purpose of regulating that
profession or the provision of legal services". The legal
profession is defined in that context to mean advocates,
solicitors and qualified conveyancers and executry
practitioners within the meaning of Part II of the Law
Reform (Miscellaneous Provisions)(Scotland) Act 1990.
Scottish Parliament
3. The legal profession is accountable as
part of the Scottish Justice system to the Scottish
Parliament and operates in a statutory framework which the
Parliament can repeal, alter or amend. Regulation of the
legal profession in Scotland was the subject of an inquiry
by the Parliament's Justice 1 Committee which reported in
November 2002.
UK Parliament
4. The legislative responsibility for
some aspects of the work of Scottish lawyers, such as
investment business, immigration advice, and consumer
credit, is reserved to the UK Parliament and the policy
lead rests with UK Government Departments.
The Office of Fair Trading
5. The Office of Fair Trading has power
to review and provide advice on restrictions on competition
in professions under the Enterprise Act 2002 and to enforce
the provisions of both domestic and EC competition law on a
UK basis. Its aims are that the professions, including the
legal profession, should be fully subject to competition
law and that any unjustified restrictions on competition
should be removed in the interest of the users of legal
services.
The Court
6. Lawyers who practise advocacy before
the Courts must conduct themselves in a manner which is
acceptable to the Court. The performance and conduct of
such lawyers is subject to continuous public scrutiny from
an informed third party, namely the judge, and may also be
seen by other lawyers, their clients and members of the
public. Moreover, such lawyers owe duties to the Court
which may conflict with the desires and interests of their
clients. Advocates are recognised as "officers of the
court" with duties and responsibilities beyond those to
their individual clients. They are not a simple service
provider able to provide their clients with a service in a
way and at a time entirely of their choosing.
The Court of Session
7. The Court and the Lord President also
have responsibilities in relation to the regulation of the
legal profession:
7.1 The Court of Session has various
disciplinary powers in relation to solicitors (see
paragraph 21 below), including a power to strike a
solicitor off the roll;
7.2 Rules of the Law Society of Scotland
require the concurrence or approval of the Lord
President;
7.3 Any scheme under sections 25-29 of
the Law Reform (Miscellaneous Provisions)(Scotland) Act
1990 would require the approval of the Lord President;
and
7.4 Advocates are admitted by the Court,
changes to the requirements for admission as an advocate
require the approval of the Lord President, and any lawyer
who practises advocacy is subject to the immediate control
of the Court in relation to his conduct in court.
A Regulation of solicitors
8. Arrangements for the regulation of
solicitors by the Law Society of Scotland are set out in
the Solicitors (Scotland) Act 1980. Under section 1 of the
1980 Act the Law Society of Scotland is responsible for the
promotion of the interests of the profession of solicitor
in Scotland and the interests of the public in relation to
that profession. The 1980 Act provides the statutory basis
for the Society, the right to practise, professional
practice, conduct and discipline, and complaints and
disciplinary proceedings relating to solicitors in
Scotland. It has since been amended by the Law Reform
(Miscellaneous Provisions) (Scotland) Acts of 1985 and 1990
and the Solicitors (Scotland) Act 1988 which have
strengthened some of the statutory protections available to
the client.
9. The 1980 Act provides the Society with
powers
The Society is responsible under section
33 of the Law Reform (Miscellaneous Provisions)(Scotland)
Act 1990 for investigating complaints that a solicitor has
been guilty of professional misconduct or provided
inadequate professional services.
Approval of rules
10. Rules made by the Society require
either the concurrence or approval of the Lord President of
the Court of Session. Accounts rules and rules relating to
incidental investment business require the approval of the
Financial Services Authority. Any rule made by the Society
which has the effect of prohibiting multi-disciplinary
practices requires to be approved by Scottish Ministers,
who are required in turn to consult the Office of Fair
Trading (section 34(3A)).
Reserved work
11. Certain legal work is reserved to
those with legal qualifications or to those who meet other
statutory qualifications (section 32). The preparation of
deeds transferring heritable property and grants of
confirmation in favour of executors is reserved to
solicitors, advocates and conveyancing and executry
practitioners. The preparation of writs relating to court
proceedings is reserved to solicitors and advocates,
subject to exceptions (for example, unqualified persons not
being paid for their services).
Solicitors from England, Wales and Northern Ireland and
the European Union
12. Solicitors from England, Wales,
Northern Ireland and other parts of the European Union who
wish to requalify as Scottish solicitors may sit a transfer
test set by the Law Society of Scotland. The Intra-UK
Transfer Test is applicable to solicitors qualified in
England, Wales and Northern Ireland, while the Aptitude
Test for EC Qualified Lawyers applies to all other European
Union qualified lawyers.
Registered European Lawyers
13. Registered European lawyers may
practise in Scotland by virtue of the European Communities
(Lawyer's Practice) (Scotland) Regulations 2000 (SI 2000 No
121) which implemented the EC Lawyers Establishment
Directive of 16 February 1998 in Scotland. The Directive
provides for European lawyers to practise on a
permanent basis under their
home State professional title in another
European jurisdiction and to be able to integrate into the
host state profession after 3 years of regular and
effective practice. The European lawyer must register with
a competent authority in the host State, which in Scotland
is either the Law Society of Scotland or the Faculty of
Advocates. Registration entitles the European lawyer to
practise the law of the relevant part of the UK as well as
the law of the home State, thus enabling the 3 years of
regular and effective practice to start to be
accumulated.
Registered foreign lawyers
14. Regulations came into force in
October 2004 which enable Scottish solicitors and
incorporated practices to enter into multi-national
practices with registered foreign lawyers. The Regulations
provide a statutory framework for regulation by the Law
Society of Scotland of the entry of Scottish solicitors and
incorporated practices into multi-national practices and
for the registration of foreign lawyers who wish to enter
such practices. The registration process permits the
Council of the Law Society of Scotland to satisfy itself
that the legal profession of which the foreign lawyer is a
member is properly regulated.
15. The Regulations meet an obligation on
EC member states under the General Agreement on Trade in
Services (GATS) to allow foreign lawyers and firms to come
into Member States' legal services markets and practise
their home country and public international law.
16. Multi-national practices will involve
Scottish solicitors and incorporated practices and foreign
lawyers from overseas jurisdictions, but may also be
multi-jurisdictional practices which in effect involve
solicitors and incorporated practices from the three
jurisdictions within the United Kingdom. Registered foreign
lawyers will not be able to carry out reserved legal work
or appear in court proceedings.
Lay rights of audience
17. Individuals who go to court may
always represent themselves, though it is easier for them
to act on their own in small claims and summary cause
actions than in ordinary cause or Court of Session actions.
A notable exception is that personal conduct of a defence
is prohibited in the case of certain sexual offences under
the Sexual Offences (Procedures and Evidence) (Scotland)
Act 2002.
18. The main circumstances when a person
can be represented by non-lawyers are small claims,
proceedings under the Debtors (Scotland) Act 1987 and
proceedings before a sheriff relating to attachment under
the Debt Arrangement and Attachment (Scotland) Act 2002
:
18.1 In small claims an authorised lay
representative may in representing a party do everything
for the preparation and conduct of a small claim as may be
done by an individual conducting his own claim, if the
sheriff is satisfied that such a person is a suitable
representative and is duly authorised to represent the
party. (Sheriff Courts (Scotland) Act 1971, Section 36 and
related rules of court).
18.2 In summary cause actions a party may
also be represented by an authorised lay representative at
the first calling and, unless the sheriff otherwise
directs, any subsequent or other calling where the action
is not defended on the merits or on the amount of the sum
due.
18.3 Under the Debt Arrangement and
Attachment (Scotland) Act 2002 and the related Act of
Sederunt a party to any proceedings under the Act may be
represented by a person other than an advocate or a
solicitor if the sheriff is satisfied that such a person is
a suitable representative and is duly authorised to
represent the party. (This followed similar provision in
earlier legislation.
18.4 At the first diet in summary
criminal proceedings where the accused is not present, a
person (who is not an advocate or solicitor) who satisfies
the court that he is authorised by the accused, may tender
a plea of guilty or not guilty on behalf of the accused
(Section 144(2)(b) of the Criminal Procedure (Scotland) Act
1995).
19. In terms of the Fatal Accidents and
Sudden Deaths Inquiry (Scotland) Act 1976 any person
entitled to appear at an inquiry may appear on his own
behalf or be represented by an advocate or a solicitor or,
with the leave of the Sheriff by any other person.
20. Representation by non-lawyers is also
permitted in many statutory tribunals.
Rights of audience : solicitors
21. Those who are qualified to practise
as solicitors may practise as a solicitor in any court in
Scotland
[1]. Solicitors have rights of audience in the district
and sheriff courts and in those Tribunals where legal
representation is allowed. Unless trained and appointed as
a solicitor advocate, solicitors may not appear in the
Court of Session and the High Court.
Rights of audience : solicitor advocates
22. The Society has powers under section
25A of the Solicitors (Scotland) Act 1980 to appoint
solicitor advocates, who are solicitors who have gained
rights of audience in the supreme courts in Scotland
through additional training and examinations. Rules made by
the Society under section 25A(4) in relation to training
for solicitor-advocates require to be approved by the Lord
President of the Court of Session, and by Scottish
Ministers who are required in turn to consult the Office of
Fair Trading. Rules under section 25(5) dealing with
conduct in relation to the exercising of any right of
audience also require the approval of the Lord President
and Scottish Ministers; Scottish Ministers are required to
consult the Office of Fair Trading where they consider that
any such rule would directly or indirectly inhibit the
freedom of a solicitor to appear in court.
Rights of audience : advocates
23. An advocate is entitled to plead in
any Court in Scotland, including the Supreme Courts (the
High Court of Justiciary, the Court of Criminal Appeal and
the Court of Session); the Judicial Committees of the House
of Lords and the Privy Council; the European Court of Human
Rights and the Court of Justice of the European
Communities; and a wide range of tribunals, inquiries and
other such proceedings.
Rights of audience and rights to conduct
litigation : members of a professional or other body
24. Sections 25-29 of the Law Reform
(Miscellaneous Provisions)(Scotland) Act 1990, which have
not yet been commenced, set out arrangements by which
rights to conduct litigation and rights of audience can be
granted to members of a professional or other body. This is
achieved by means of a scheme drawn up by the body seeking
such rights for its members; the scheme has to be approved
by the Lord President of the Court of Session and the
Scottish Ministers. Bodies are required by the statute to
submit a draft scheme for the approval of the Lord
President and the Scottish Ministers which :
24.1 specifies the rights they would like
(in relation to which courts, categories of proceedings and
nature of business);
24.2 describes the training requirements
and code of practice which the body would impose on members
seeking to exercise such rights; and
24.3 sets out their arrangements for
indemnifying members of the public, handling complaints,
coping with breaches of the scheme and so on.
The Scottish Ministers are empowered to
make Regulations under section 25(4) of the 1990 Act to
prescribe other matters to be included in such schemes.
25. The Lord President must consider any
such scheme in its entirety. The Scottish Ministers are
required to consider such schemes (in consultation with the
Director General of Fair Trading) in relation to the
provision made for training, indemnity, complaints
handling, and a code of practice (including any competition
aspects) and to ensure that schemes will require
appropriate standards of conduct and practice. The Lord
President and the Scottish Ministers are required to
consult each other in considering the scheme and to take
into account any written representations they receive.
26. Scottish Ministers will review the
case for commencement of sections 25 to 29 of the Law
Reform (Miscellaneous Provisions)(Scotland) Act 1990 in the
light of the research.
B Regulation of conveyancing and executry
practitioners
27. In August 2003 the Law Society of
Scotland took over responsibility for the regulation of
conveyancing and executry practitioners under sections
16-23 of the Law Reform (Miscellaneous
Provisions)(Scotland) Act 1990. It acquired this
responsibility, together with relevant rule-making powers,
on abolition of the Scottish Conveyancing and Executry
Services Board by the Public Appointments and Public Bodies
etc (Scotland) Act 2003. Costs incurred by the Society in
relation to the regulation of conveyancing and executry
practitioners are met by grant-in-aid from Scottish
Ministers. At the time of transfer of responsibility about
20 practitioners were registered with the Board; only 3 of
the practitioners were practising in an independent
capacity and the others were working in an employed
capacity.
C Regulation of advocates
28. The Faculty of Advocates was not
established by statute, but is the governing body for
advocates led by its Dean who is elected by the whole
membership and assisted by four elected officials : the
Vice Dean, the Treasurer, the Clerk and the Keeper of the
Library. The Court of Session admits to the public office
of advocate, but in practice delegates responsibility for
the examination of the suitability of candidates to the
Faculty. Changes to the requirements for admission as an
advocate require the approval of the Lord President. The
Faculty is otherwise self-regulating and controls its own
disciplinary procedures, though lay representation is
involved.
29. In July 1992 the Faculty adopted a
constitution for an elected Council. The powers conferred
upon the Council include the formulation and implementation
of policy for the administration and development of the
Faculty; the maintenance of the Advocates Library and the
approval of rules regulating its use; the provision,
through Faculty Services Ltd or otherwise of administrative
facilities and services to members of the Faculty; and the
formulation of regulations governing admission as well as
codes of conduct and professional practice.
30. The Faculty is responsible under
section 33 of the Law Reform (Miscellaneous
Provisions)(Scotland) Act 1990 for investigating complaints
that an advocate has been guilty of professional misconduct
or provided inadequate professional services.
D Scottish Legal Services Ombudsman
31. The Scottish Legal Services Ombudsman
is appointed by Scottish Ministers under section 34(1) of
the Law Reform (Miscellaneous Provisions) (Scotland) Act
1990 and has a remit to investigate the handling of
complaints against legal practitioners. The Ombudsman is
independent from the legal professions and is not a lawyer.
She is also independent from Government and the Ombudsman's
findings and recommendations are not reviewed by Scottish
Ministers or the Scottish Executive.
32. Complainers who consider that their
complaint has not been dealt with satisfactorily by the
relevant solicitor, law firm or advocate may take the
complaint to the Law Society of Scotland or the Faculty of
Advocates, who must investigate the complaint and
thereafter report on their investigations to the complainer
and to the practitioner concerned. If a complainer is
dissatisfied with the outcome of an investigation by the
professional body concerned, he or she may then take a
complaint to the Ombudsman, requesting the Ombudsman to
examine how the complaint has been handled by the
professional body. The Ombudsman is concerned with the
treatment by the professional body of the complaint, i.e.
whether the investigation by the professional body has been
fair and thorough, whether all the relevant heads of
complaint have been properly addressed and whether
appropriate action has been taken.
33. Having arrived at an opinion, the
Ombudsman may make appropriate recommendations to the
professional body which is required to consider them and to
notify both Ombudsman and complainer as to what action it
has taken or if it has decided not to comply wholly with
the recommendations. If the professional body has not
wholly complied with such recommendations within a period
of three months, the Ombudsman may publicise that fact. The
Ombudsman may include any such case in an Annual Report to
Scottish Ministers, without identifying the parties
involved, and may report a case to the Scottish Solicitors'
Discipline Tribunal where it appears that a solicitor may
have been guilty of professional misconduct. In her Annual
Report the Ombudsman may also make general recommendations
about how the complaints handling procedures of the
professional bodies might be improved.
E External regulators : discipline
34. The members of the Society and the
Faculty are subject to external regulation by the Court of
Session and the legal profession discipline tribunals.
There is already significant lay involvement in the
Scottish Solicitors' Discipline Tribunal and the Faculty of
Advocates Disciplinary Tribunal. (In relation to
complaints-handling, the Law Society of Scotland increased
lay membership of its Client Relations Committees to 50% in
2003.)
Court of Session
35. In the case of professional
misconduct by a solicitor, the Court of Session on appeal
from a decision of the Scottish Solicitors' Discipline
Tribunal may use its powers under section 55 of the
Solicitors (Scotland) Act 1980 to
- Cause the name of a solicitor to
be struck off the roll; or
- Suspend the solicitor from
practice as a solicitor for such period as the court
may determine; or
- Suspend the solicitor from
exercising any right of audience held by him by virtue
of section 25A for such period as the court may
determine; or
- Revoke any right of audience so
acquired by him; or
- Censure him; and in any of those
events, or
- Find him liable in any expenses
which may be involved in the proceedings before the
court.
The Court of Session does not exercise its powers in
relation to professional misconduct, unless there has been
a decision by a Discipline Tribunal.
Scottish Solicitors' Discipline Tribunal
36. The Tribunal is a statutory body
empowered to adjudicate on complaints about professional
misconduct and the provision of inadequate professional
services by solicitors. The composition of the Tribunal is
defined in Schedule 4 to the Solicitors (Scotland) Act
1980. It must consist of between 10 and 14 solicitor
members and 8 lay members, all appointed by the Lord
President of the Court of Session.
37. The Council of the Law Society of
Scotland nominate solicitor members to the Lord President
and Scottish Ministers nominate lay members to the Lord
President, who makes the appointments in accordance with
the 1980 Act. The Tribunal has a range of disciplinary
powers under section 53 of the 1980 Act, including the
power to order the name of a solicitor to be struck off the
roll, to order a solicitor to be suspended, fined, censured
etc.
Faculty of Advocates Complaints
Committee and Disciplinary Tribunal
38. Complaints against advocates are
handled by either the Faculty's Complaints Committee or by
the Faculty of Advocates Disciplinary Tribunal, depending
on the seriousness of the complaint. The range of penalties
open to the Tribunal where a complaint has been upheld is
greater, and extends to suspension or expulsion of the
advocate concerned from membership of the Faculty. In March
2002 the Faculty revised the Tribunal's rules, which set
out the membership and procedures for the Faculty's
Complaints Committee and the Tribunal, including the
penalties which may be imposed on advocates where a
complaint is upheld. Both the Committee and the Tribunal
include lay members from a panel appointed by Scottish
Ministers; a Complaints Committee will have 3 members, one
of whom will be a lay person and the Disciplinary Tribunal
will have 7 members, 2 of whom will be lay persons. The
Chairman of the Disciplinary Tribunal will either be a
retired Senator of the College of Justice or Sheriff
Principal or other appropriate person appointed by the Lord
President.
F External regulators : specific professional
activities
39. Co-regulation involving the Society
and other bodies occurs in the areas of investment
business, insolvency, legal aid, immigration and consumer
credit.
Scottish Legal Aid Board
40. Under the Legal Aid (Scotland) Act
1986 the Scottish Legal Aid Board maintains a Register of
Solicitors who can provide criminal legal assistance and
has issued a Code of Practice in relation to criminal legal
assistance. The Board has powers to remove solicitors from
the Register and extensive powers to require information,
enter solicitors' premises and investigate compliance with
the code or contraventions in relation to criminal legal
assistance.
41. The 1986 Act allows any solicitor to
provide Advice and Assistance on any matter of Scots law if
the client meets the statutory tests. Solicitors providing
advice on criminal matters have to be registered (see
previous paragraph) and, as a result of Practice Rules made
by the Law Society, from October 2003 civil legal
assistance (which includes Advice and Assistance on a civil
matter) can only be provided by solicitors registered with
the Board and subject to the Society's quality assurance
requirements. It is intended to introduce quality assurance
regimes for solicitors undertaking criminal legal
assistance and for advocates. The 1986 Act does not place
any restrictions on counsel providing Advice and
Assistance. Discussions are currently under way with the
Faculty and the Law Society of Scotland about extending
quality assurance across the range of legal aid areas in
line with the Executive's policy to modernise legal
aid.
42. The 1986 Act provides that the Law
Society of Scotland, the Scottish Solicitors' Discipline
Tribunal or the Faculty of Advocates can decide to exclude
a solicitor or an advocate from providing advice and
assistance or from representing someone who has been
granted legal aid. This can be done on the following
grounds
42.1 their conduct when acting or
selected to act for persons to whom legal aid or advice and
assistance is made available; or
42.2 their professional conduct
generally; or
42.3 in the case of a member of a firm of
solicitors or a director of an incorporated practice, such
conduct on the part of any person who is for the time being
a member of the firm or a director of the practice.
A solicitor or advocate can be excluded for a specified
period or without limit of time. An appeal against such a
decision lies to the Court of Session.
43. Separately, the Solicitors (Scotland)
Act 1980 permits the Scottish Legal Aid Board to make a
complaint to the Scottish Solicitors' Discipline Tribunal
where it appears that
43.1 a solicitor may have been guilty of
professional misconduct; or
43.2 an incorporated practice may have
failed to comply with any provision of the Solicitors
(Scotland) Act or of rules made under the Act applicable to
it or a solicitor of an incorporated practice may have
provided inadequate professional services.
44. A Strategic Review has been carried
out of the delivery of legal aid, advice and information in
Scotland, including the role of the Scottish Legal Aid
Board. The aim of the review is to modernise legal aid,
streamline criminal justice and improve access to justice
agenda for the benefit of the citizen. The report to
Ministers and the Scottish Legal Aid Board was published in
October 2004 (Strategic Review on the Delivery of Legal
Aid, Advice and Information ISBN 0-7559-4372-4).
Financial Services Authority
45. The Law Society of Scotland is a
recognised professional body under the Financial Services
and Markets Act 2000 and responsible as such for the
licensing and regulating of solicitor firms which conduct
incidental investment business, that is
investment business which is incidental and complementary
to the provision of legal services. The Financial Services
Authority itself is directly responsible for the
authorisation and regulation of solicitor firms which
conduct
mainstream investment business under the
2000 Act.
Insolvency Practitioner regulation
46. The Law Society of Scotland is a
recognised professional body under the Insolvency Act 1986
and issues licences to solicitors who wish to be appointed
as insolvency practitioners. The Society monitors and
inspects all its insolvency solicitors and is itself
subject to monitoring and supervision by the DTI Insolvency
Service every 3 years.
Consumer Credit
47. The Law Society of Scotland holds a
group licence under the Consumer Credit Act 1974. The
licence is granted by the Office of Fair Trading, lasts for
5 years and enables members of the Society to provide
services in consumer credit, credit brokerage,
debt-adjusting and debt-counselling and
debt-collecting.
Immigration and asylum services
48. The Law Society of Scotland and the
Faculty of Advocates are designated professional bodies in
terms of section 86 of the Immigration and Asylum Act 1999.
Designation removes the need for Scottish solicitors or
advocates to be registered individually with the
Immigration Services Commissioner. The Commissioner has the
power to receive complaints against Scottish solicitors or
advocates giving immigration advice and is required to
monitor how any complaints passed to the Society or Faculty
are handled (Schedule 5, paragraph 10 of the 1999 Act). The
Commissioner is required to review the list of designated
professional bodies and report to the Scottish Ministers if
a designated professional body is failing to provide
effective regulation of its members.
G Other legal service providers
49. Provision of legal information and
advice in Scotland by non-lawyers has developed over the
years, as a result of local initiatives of providers in the
public, private or voluntary sectors. The most common
sources of legal advice on civil matters are solicitors and
local Citizens Advice Bureaux. There is however a wide
variety of other sources of advice, ranging from the police
to trade unions, local authority departments, housing
associations, insurance companies, advice agencies, welfare
rights and trading standards officers, law centres,
voluntary organisations and interest groups, social workers
and court staff.
50. Local authorities are the principal
funders of the voluntary advice sector as well as being
significant providers of advice services themselves.
Central government funding (of voluntary sector provision
or for specific initiatives in local authorities) is less
prominent, but does involve a number of UK Government
Departments, such as the Department for Trade and Industry
(DTI) who provide funding for Citizens Advice Scotland and
support initiatives such as the Consumer Support Networks.
The Scottish Executive also provides funding for advice
provision, through several Departments, such as the
Development Department which provides financial support for
locally based money and debt advisers; and funds
organisations such as Shelter, the Shelter Housing Law
Service and Legal Services Agency, through its housing
sector voluntary grant scheme. The report of the Strategic
Review on the Delivery of Legal Aid Advice and Information
published in October 2004 recommended better integration
and coordination of legal advice services by solicitors
(funded through legal aid) and non-legally qualified
advisers funded from other public sources; and an enhanced
role for the Scottish Legal Aid Board to help deliver a
better coordinated and more flexible and responsive
system.
51. There are also mediators who seek to
develop effective communication and build consensus between
parties in dispute with the aim of securing their agreement
to a settlement. Mediators may be regulated through
voluntary adherence to certain training standards and codes
of practice but they are not subject to any statutory
regulation.
Claims assessors and claims management companies
52. In recent years companies have
started up, often on a GB basis, which pursue personal
injury cases on behalf of clients. There is no statutory
definition of what they do, or any representative body even
on a loosely organised, non-regulatory basis. Claims
companies in Scotland usually charge on a contingency fee
basis under which they receive a percentage of any damages
awarded or of the agreed settlement and usually seek to
negotiate settlements without litigation. Claims management
companies are known to contract with solicitors to act on
their behalf and operate by advertising their services on a
"no win, no fee" basis. Employees without a legal
qualification carry out the initial assessment of claims
and pass those they think worthwhile to solicitors
contracted to the claims management company. If the claim
succeeds, the company will usually take one third of the
damages awarded.
Access to Justice Division
Justice Department
January 2005
[1] By virtue of section 25 of the Solicitors
(Scotland) Act 1980.