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Justice Committee, 12 Jan 2010

12 Jan 2010 · S3 · Justice Committee

Item of business

Legal Services (Scotland) Bill: Stage 1

Ewing, Fergus SNP Inverness East, Nairn and Lochaber Watch on SPTV

One facet that has emerged from almost all the evidence is that not passing the bill presents some very real risks for the Scottish legal profession. If we do not pass the bill, solicitors in England and Wales will, through the Legal Services Act 2007, be entitled to enter into alternative business structures. Solicitors in Scotland will not, which I think will tie one hand behind the back of many Scottish legal firms. Let me tell the committee why.We have had evidence from the president of the Law Society of Scotland and the dean of the Faculty of Advocates, who are extremely concerned that that will be the case. In their view, the bill is essential because without it, the Scottish legal profession will be disadvantaged. The reason that they gave for holding that view—by Ian Smart, in particular—is that if Scottish firms do not have the opportunity to avail themselves of the business opportunities created by the bill, some of them will, in order to get those opportunities, register as solicitors in England and Wales. They will remove themselves from regulation in Scotland and move to England and Wales. That clear suggestion has been made in evidence by those at the top of our legal profession in Scotland. I am sure that the committee agrees with me that that is a serious warning indeed. Furthermore, even among those who oppose the bill, there is general recognition that that is a real risk.However, let me be positive—I want to put a positive case for the bill to receive the support of the committee and the Parliament. There are many aspects, which concern not just large but small firms. As is stated in paragraph 39 of the policy memorandum, much of the work that the largest firms in Scotland do is in areas that are not reserved to Scots law. Many of those top firms compete not simply in Edinburgh and Glasgow, but in London and internationally. They will probably be competing not in domestic conveyancing or family law, important though those topics are—we will come on to them—but in commercial law, aviation law, mercantile law, the law of shipping, the law of telecommunications, the law of telegraphy, the law of patents and copyrights, arbitration or construction law. All those areas of law and many others that I could mention are areas in which law firms that seek business from the largest commercial concerns by offering a specialist service may well wish to enter into business relationships with experts. They might wish to enter into such relationships with experts in aviation or shipping law, for example. They would certainly wish to do so with experts in construction, if one thinks of the scope in arbitration work for complicated commercial construction disputes. They might also wish to have experts in taxation or pension law.All those areas are highly lucrative and each has massive markets and huge potential. Unless we pass the bill, our Scottish solicitors will not be able to avail themselves of the opportunities that exist in areas of law that, unlike the framing of writs, litigation and conveyancing, are not reserved to Scottish solicitors but in which activities can be carried out by all solicitors in the United Kingdom. Unless we avoid a situation in which our firms have one hand tied behind their backs, they may well be disadvantaged.As the policy memorandum states, the value to the Scottish economy of the turnover of the Scottish legal profession is estimated to be more than £1 billion. That shows the scale of the opportunities that exist, even if the recession has predated that sum. There are massive opportunities for Scottish lawyers and the Scottish legal system. Over the past decades, we have perhaps been held back, with even our largest public limited companies choosing to use law firms in London for various reasons, which we are seeking to address in the bill and in other ways, such as through the extremely important work of Lord Gill.The opportunities are there. I am not sure that the committee has heard the case that is being expounded by the large firms. I am not offering to step into the breach, because I am not qualified to speak for any of them, but it is fairly obvious that there are immense opportunities, which I have tried to expound in brief. If we stick with the restrictions in the 1980 act, none of the opportunities that I have described will exist.

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Justice Committee, 12 Jan 2010

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