Law Society settles case over CQS training
The case which saw the Law Society described as having abused its position has recently been settled according to recent reports.
As revealed by Legal Futures, the details of the damages agreement are confidential, something which – as well as the Society’s behaviour throughout the case – has received criticism.
The original claim came from Socrates training, who stated that Chancery Lane has abused its dominant position in insisting that firms purchase training from them in order to retain the Conveyancing Quality Scheme accreditation. The relevance of the accreditation was recently questioned by conveyancers at the Law Firm Services Lender Panel Debate.
September was the deadline for the parties to reach an agreement, or otherwise to face the tribunal once more.
Having lost the custom of over 70 legal clients, Socrates calculated their damages at £112,500 on the basis that each firm would pay around £600 over a period of two and a half years.
Assesses on a standard basis if not agreed, the Society was ordered to cover these costs up to an approved amount of £230,000.
Whilst the Society had initially sought cost of £637,000, this was capped at £402,500.
Commenting on the duration of the case was director of Socrates Bernard George. Whilst the solicitor criticised the behaviour of the Society, he also highlighted the support that Socrates had received from law firms.
“[The Law Society] sought to rig a competitive market, to the manifest disadvantage not just of training businesses, but of law firms. Second, it raised spurious defences and supposed justifications, presumably in the hope that we could be discouraged from pursuing a claim they must have known was well founded.
“Third they put forward flawed evidence, which attracted strong criticism from the president of the Competition Appeal Tribunal.
“It has been a long, expensive and stressful process, to make our own professional body obey the law.”
“It would be nice to think the Law Society has learned something from all this, and will now make changes to its governance and accountability systems to ensure this sort of debacle cannot be repeated. Sadly there is no sign of this.”
He also questioned the position of the Law Society in terms of their control of the SRA, stating that the regulator should be independent of an organisation which had behaved in this way.
Responding to this, a spokesman from the Law Society highlighted that during the tribunal, the fact that training should be included within the CQS was at no point disputed.
“The case on liability was not clear cut. The tribunal accepted that from its inception in 2010 until the end of April 2015, the CQS was operated by the Law Society in compliance with competition law.”
He went on to highlight the complexities of the case as well as the difficulties involved in reaching an outcome.
“As is clear from the judgment, however, the point at which the Law Society was found to have assumed a dominant position in the marketplace, and therefore ought to have opened up the anti-money laundering, mortgage fraud and financial crime training modules to third parties, required a difficult judgement.
“The tribunal itself took six months of deliberation to reach its judgment on these difficult issues. This amounts to longer than the entire period from the issue of the claim form to trial and reflects the legal and econometric complexities of the case.”
As well as noting that the Society had acted in the interests of the profession when bringing the claim, he also reiterated that the damages, as well as the case costs, were covered by professional indemnity insurance.
In light of the judgement, the Law Society is currently amending the training aspect of the CQS.