Notes & Practice on Legal Services

The Legal Services Act 2007 (“the 2007 Act”) states that a “right of audience” is the ability to speak and present evidence in court, including the right to call and question witnesses. Before the Courts and Legal Services Act 1990, only barristers were allowed to appear in the Crown Court and higher courts. 

Note: this Act permitted solicitors to do so if they had a Certificate of Advocacy. 

The 2007 Act recognized different types of lawyers, such as barristers, solicitors, and legal executives, all of which are regulated by their own bodies, but ultimately overseen by the Legal Services Board. 

The 2007 Act preserves the principle that certain legal activities can only be carried out by properly registered lawyers. Section 12(1)(a) and Schedule 2 of the 2007 Act specifically mention the exercise of a right of audience as a “reserved activity” that can only be done by authorized individuals or those who are considered “exempt persons” due to their status or qualifications. Section 14 of the Act also makes it a criminal offense for non-entitled individuals to carry out these activities, unless they can prove they were not aware they were committing an offense. 

An authorized person: 

someone who is able to exercise rights of audience in accordance with the regulations of an authorized body, such as the Solicitors Regulation Authority (SRA). However, in some cases, a person who helps with litigation may be considered an exempt person for the purpose of exercising a right of audience. 

• Under the SRA Authorisation of Individuals Regulations (“the Authorisation Regulations”), solicitors are automatically allowed to conduct their own advocacy in 
• tribunals, Coroners’ Courts, Magistrates’ Courts, County Courts, the Family Court and European Courts. 
• If they have gained the Higher Courts (Civil Advocacy) Qualification or the Higher Courts (Criminal Advocacy) Qualification, (specialist training) solicitors are also permitted to represent clients in the Crown Court, the High Court of Justice, the Court of Appeal, and the Supreme Court of the United Kingdom. 

Pursuant to the Authorisation Regulations the only route to obtaining qualification for higher courts advocacy is by way of assessment based on the SRA’s Higher Rights of Audience competence standards, whose major points are: 

• Only solicitors and registered European lawyers may complete the assessments. 
• There are separate awards for rights of audience for criminal and civil advocacy. 
• There is only one route to qualification in either civil or criminal proceedings. 
• The scheme requires all applicants to pass an advocacy assessment, based on the SRA’s Higher Rights of Audience competence standards. 
• There are separate assessments for criminal and civil procedures. 
• There is no mandatory training or experience requirement. 
• Assessments under the new scheme are run by assessment organisations authorised by the SRA. 

Do courts have the power to grant rights of audience to individuals? 

According to the Legal Services Act 2007, courts have the discretion to grant a special right of audience to a person in specific proceedings. This power, however, must be used sparingly and only in exceptional circumstances, as determined on a case-by-case basis. It should be noted that this is not a standard method of granting rights of audience. 

What is a conditional fee agreement (CFA)?

A conditional fee agreement (CFA) is a contract between a solicitor and their client, stating that the client will only need to pay for legal services if the case is successful. It is commonly known as “no win, no fee.”

How does a conditional fee differ from a contingency fee?

A conditional fee allows a solicitor to charge a higher rate, called an “uplift,” if the case is successful. However, this uplift cannot exceed 100% of the solicitor’s total profit costs. In contrast, contingency fees, where the solicitor’s fee is a percentage of the damages awarded, are not permitted.

Are there any limitations on the amount recoverable under a conditional fee agreement?

Yes, in claims for personal injury at the initial stage, the amount recoverable under a conditional fee agreement is limited to 25% of the damages obtained by the client. The damages used to calculate the success fee are general damages for pain, suffering, and loss of amenity, as well as damages for pecuniary loss (excluding future pecuniary loss).

Note: A conditional fee agreement must be in writing, signed by the client, and precisely state the circumstances and method for paying the success fee.

Note: Failure to comply with the guidelines renders the agreement unenforceable, and the losing party will not be responsible for paying the winning party’s costs.

What should a solicitor explain to a client represented under a conditional fee agreement?

The solicitor should inform the client that they may be responsible not only for their own solicitor’s costs but also for the opposing party’s costs if their actions unnecessarily prolong the legal proceedings or if the case is unsuccessful. The client also has the right to request a cost assessment to review and challenge the charges they are expected to pay.

What costs might a client still need to pay if they lose a “no win no fee” agreement?

In a “no win no fee” agreement, the client may still be responsible for paying disbursements such as court fees, counsel’s fees, and witness fees, as well as the opposing party’s costs. However, clients can mitigate this risk by taking out “after the event” insurance (ATE), which covers the defendant’s costs and sometimes the claimant’s disbursements in case of a loss.

What is Qualified One-Way Costs Shifting (QOCS)?

Qualified One-Way Costs Shifting (QOCS) was introduced in April 2013 to alleviate the loss of recoverability of After-The-Event (ATE) premiums in personal injury cases. Under QOCS, successful claimants can recover their costs from the defendant, while unsuccessful claimants are not required to pay the successful defendant’s costs.

Are Conditional Fee Agreements (CFAs) available in all types of cases?

CFAs are not available in criminal or family proceedings, and they are not permitted for clients receiving financial support from the Community Legal Service Fund.

What are Damages Based Agreements (DBAs)?

Damages Based Agreements (DBAs) allow clients to pay their representatives out of the damages awarded by the court in most civil proceedings. DBAs are regulated by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the Damages-based Agreements Regulations 2013.

The limit on the payment taken from the sums recovered by the client depends on the type of claim.

For personal injury claims, it is capped at 25% of the combined damages for pain, suffering, and loss of amenity and pecuniary loss (excluding future loss).

In employment matters, it is 35% of the sums recovered by the client. For all other claims, the cap is set at 50% of the recovered sums. These caps include VAT.

What must the terms and conditions of a DBA specify?

The terms and conditions of a DBA must specify the claim or proceedings to which the agreement relates, the circumstances in which the representative’s payment, expenses, and costs are payable, and the reasons for setting the payment at the agreed level, including whether the claim or proceedings are similar to others in an employment matter.

Money laundering refers to the process of disguising the proceeds of criminal activity as legitimate funds by passing them through a series of transactions or investments. This makes the money appear to come from a legal source.

Anti-money laundering legislation is necessary to detect and prevent the concealment of illegal funds as legitimate income. It aims to combat a wide range of criminal activities, including tax evasion, drug trafficking, public corruption, and the financing of terrorist groups. With the expansion of the financial industry and the ability to conduct complex transactions, it has become crucial to have measures in place to prevent the illegal use of financial systems.

Anti-money laundering regulations require financial institutions to develop sophisticated customer due diligence plans to assess money laundering risks and detect suspicious transactions. They are expected to have measures in place to identify and report any potentially illicit activities.

Money laundering can be divided into three steps:

1. Placement: The cash generated from criminal activities is placed into the financial system. At this stage, the proceeds of crime are most apparent and vulnerable to detection.
2. Layering: The process of layering involves obscuring the origin of the proceeds of crime by conducting a series of complex transactions. This may include involving multiple entities, such as companies and trusts, and carrying out transactions in various jurisdictions. The money may also be moved internationally and passed through multiple businesses in a layered fashion.
3. Integration: Once the origin of the funds has been obscured through layering, the criminal can reintroduce the funds as legitimate assets or funds. This may involve investing in legitimate businesses or engaging in other forms of investment, often with the assistance of professionals such as solicitors. Activities like buying property, setting up trusts, acquiring companies, or settling litigation can all be used to integrate the funds into the legitimate economy.

The Proceeds of Crime Act 2002 defines money laundering offenses broadly. It includes even the passive possession of ‘criminal property’ as money laundering. This means that simply having possession of money or assets associated with criminal activities can be considered money laundering under the Act.

Stay tuned for more notes ………