The Legal Complaints Service and publicity
Last year the Legal Complaints Service abandoned its proposal to 'name and shame' solicitors. Andrew Hopper looks at the issues involved in such proposals.
In the first quarter of 2008 the Legal Complaints Service promoted a consultation paper on its stated intention to 'name and shame' solicitors against whom complaints of poor service had been upheld. The proposal provoked considerable hostility as being ill conceived, and the Law Society in its representative role was stung into a formal response opposing the scheme, which amongst other things demonstrated that the Law Society had undertaken a great deal more research than had (at least apparently) LCS.
In October 2008 the proposal was abandoned. The official line was that the LCS had been right all along, but that ?more work needed to be done' and the fact that the LCS would not exist for much longer than a year (the Office for Legal Complaints being expected to be operational in 2010) meant that there were neither resources nor sufficient time available to develop a scheme that was ?equitable to both consumers and members of the profession'.
It always seemed extraordinary that an organisation with such a short life expectancy should promote such a radical change in policy, when the statutory framework for its successor was already in place, and in circumstances in which no-one could predict, let alone assume, that the OLC would favour a similar approach. Of course it would only be the hopelessly cynical who could possibly, and no doubt erroneously, conclude that this was an exercise in the LCS being seen to do something ? anything ? to justify its existence and to enhance the CVs of those responsible for so obviously championing the consumer cause...
Entity Regulation
Iain Miller identifies what it means for the profession
Lawyers have always been regulated and disciplined as individuals. Whilst in recent years, solicitors and licensed conveyancers have been able to practise through recognised bodies, the individual has remained the primary point of regulation. So, for example, if a solicitors practice which is a LLP and has 100 members misses its deadline for service of the firm's accountants' report then the SRA will currently write to each solicitor member of the LLP informing them that they are liable to a disciplinary sanction and may have conditions imposed on their practising certificate.
Amongst the many changes to legal services regulation brought about by the Legal Services Act 2007 is the introduction of what the SRA calls entity based regulation and the Clementi report called firm based regulation. Unlike many of the other changes it will have an immediate impact on solicitors. The very architecture of the Legal Services Act requires a move in legal services regulation towards entity based regulation. The LSA introduces alternative business structures, that is to say entities that can mix different types of lawyers. These entities can be externally owned by anyone provided that this is done within the regulatory structure set out under the LSA...
Sample FAQS:
My client is based outside the UK – do I need to charge VAT on my invoice?
When supplying legal services you need to consider where your client belongs and also, if they belong in the EU, whether they are acting in a non-business capacity. In addition, you need to consider whether the advice you are giving relates to land situated in the UK. If the service you are providing relates to land situated in the UK you should charge your client VAT irrespective of where they belong.
The position with regard to other advice is more complicated.
If your client belongs outside the EU (including the UK and Isle of Man), you should not charge VAT when issuing a bill.
If your client belongs within the EU (but outside the UK and the Isle of Man) you should not charge VAT if that client is receiving your advice for the purposes of a business carried on by him. It used to be the case that you would need your client's VAT registration number (or equivalent in the relevant Member State) to be in a position not to charge VAT but it is now sufficient to obtain 'commercial documents' from your client such as letter-headed paper to show your client is acting in the course of its business.
If your client belongs within the EU (but outside the UK and the Isle of Man) but is not acting in the course of a business e.g. an individual acting in that capacity, you should charge VAT.
If a particular situation does not fall within the rules summarised above a basic rule applies that requires you to charge VAT on all invoices (assuming you are VAT registered).
My client is settling a case out-of-court – is the settlement subject to VAT?
This can be very complicated and depends on the nature of the litigation/dispute. If the dispute relates to an earlier supply from one person to another for VAT purposes – for example, payment for the sale of goods in the UK – then the settlement will be subject to VAT if the original supply was subject to VAT.
If the settlement is compensatory in nature and does not therefore relate to an earlier supply of goods or services by one person to another, the settlement is described as being outside the scope of VAT altogether and VAT should not be charged.
NB this is only a basic summary. The nature of out-of-court settlements vary widely and specific advice should be taken if you are in doubt as to the correct VAT treatment.
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