On 9 May 2007 Which? submitted a super-complaint to the Office of Fair Trading (OFT) on the restriction on business structures and direct access affecting both branches of the Scottish legal profession. Which? contests that there is a number of features of the Scottish legal services market which appear to harm the interests of consumers. Significantly, the complaint seems to suggest that the approach to reform in England and Wales, based on the Clementi review, should be followed in Scotland.
A super-complaint is a complaint submitted by a "designated" consumer body (such as Which?) to the OFT, the UK's complaint regulator, that: "any feature of a market in the UK for goods and services is or appears to be significantly harming the interests of consumers". The OFT must consider a super-complaint within 90 days of receipt and has a range of options open to it, from dismissing the complaint as unfounded – to imposing a range of sanctions and measures on a particular market or operator.
Which? identifies two issues in particular as obstructing the provision of better legal services to consumers. The first of these is the existing body of regulations applying to advocates. Which? submits that some serious reforms are needed, including the introduction of direct access to advocates, whereby clients can instruct an advocate directly rather than going through a solicitor.
The second issue that Which? highlights is the rule, imposed by the Law Society of Scotland, that prevents law firms from being owned by anyone other than a solicitor. Which? would like to see the introduction of third party owners into the market, arguing that law firms would benefit from increased access to capital markets and would be able to spread partners' risk, while consumers would have a significantly improved level of welfare.
Regulatory reform and Clementi
Which? sets all of its arguments within the context of ongoing regulatory reforms in England and Wales, as well as reforms at an EU level. It notes that the present structure of the legal services market in England and Wales in very similar to the Scottish legal services market, but also notes that, as a direct result of the Clementi report and the consequent Legal Services Bill (currently with the House of Lords), the current structure in England will be overhauled comprehensively.
The UK Bill would allow lawyers in England and Wales to work together in alternative business structures – potentially joining with other professionals such as accountants or actuaries to work in a joint business. Which? says that the Bill will also allow third parties to enter the market and to enter into business relationships with lawyers to provide legal services to consumers – something that Which? welcomes as a necessary deregulation leading to 'new and improved services, market innovation and increased consumer choice'.
Which? contrasts this position with that of the Scottish legal services market. It argues that the restrictions on business structures in Scotland cause significant consumer harm as they impede the development of the Scottish legal services market to meet consumer demand and hamper service providers from 'harnessing efficiencies offered by certain business structures', all of which, they suggest, may lead to increased costs for the consumer.
On 28 May the new Scottish Justice Secretary indicated that the Scottish government could implement a version of the Clementi reforms which would remove the ownership restrictions on Scottish law firms while not going as far as allowing business such as banks, supermarkets and insurers to employ lawyers to provide legal services for their customers. It therefore remains unclear whether the Which? super-complaint remains relevant.
When the Which? super-complaint is put in context, it seems that it is still unlikely that a full-blown version of Clementi will be implemented in Scotland, not least because even in England and Wales the reforms being implemented fall short of what was recommended by the Clementi report.