This is the Second SLAS Briefing Paper on ABS. It is reproduced here in the interests of information and furthering the debate.


WHAT WAS RESULT OF THE AGM?

Motion 1 – Profession split down middle – no unity

Our opposition to the Law Society of Scotland’s (LSS) Motion 1 was only narrowly defeated by 21 votes, 1486 for and 1465 against. This was no clear victory for the LSS. The Profession is split right down the middle on this issue. The LSS position was obscured by Motion 2 conflicting with it and commanding greater support than their Motion had.

Motion 2 – A clear winner and most unifying compromise

We welcome the decisive successful result of Motion 2 known as the “Dailly Motion or Amendment” by around 150 votes at the AGM of LSS. The result was 1,558 to 1,404.

From our First Briefing Paper to MSPs on ABS you will be aware that that was our preferred Motion and it was backed by our members. Our proxy votes (around 1300) were cast for the Dailly Motion and were essential to its success.

Motion 3 – Original SLAS Motion

Our own Motion 3 required to be the same as at the SGM (2 General Meetings on the same Motion are needed to force change of a Council policy) to make it binding on the LSS. This was lost by around 50 votes. While Motion 2 may not be binding on LSS yet (as it has been voted for only once) it cannot be ignored.

What now?

The results are an up to date barometer of solicitors’ opinion. We hoped for wise judgement by LSS to reconcile the 2 conflicting Motions. The LSS have now confirmed that they are unable to do so and will adopt Motion 1 only as Policy but will make clear to you that there is a large part of the Profession opposed to ABS.

Alternative Voice of SLAS

The LSS position now adopted does not give voice to almost 50% of the Profession who voted against Motion 1 and does not deal with the clearer winning majority vote of 52.47% on the “Dailly Motion” which succeeded with more votes than the LSS Motion.

SLAS Council before commencing its campaign identified unrest of members who felt they were not being heard. We gave voice to that alternative view to the LSS view. Since the LSS will not represent that view even now then we will continue to do so.

An alternative voice to the LSS is a function that SLAS takes very seriously. SLAS worked to represent this previously unheard voice now given full voice through us. This is responsible representation. We were vindicated and rewarded by the success of Motion 2.

Fundamental Differences are set out in our Briefing Paper 1. In summary:-

Any external investor will wish “control”. Control is about voting rights and is not just about ownership. LSS Motion 1 does not deal with this nor give a suitable buffer against external control. Majority ownership does not necessarily avoid majority voting and control by a minority external owner.

Why? Under the terms of their financial investment they may contract for a greater voting power than their share of ownership or for power to withdraw their finance if voting does not go as they wish it to. Accordingly, allowing any share of ownership to an external investor is fraught with danger to the independence of solicitors.

Challenge the LSS to explain why they have not spelt out those dangers in their Motion.

Objective Is set out in our Briefing Paper 1. In summary:-

We urge that investment capital ownership be excluded from Scottish legal practices as it was excluded from Scottish GP medical practices earlier this year and for many of the same reasons.

Challenge the consumer bodies and Law Society of Scotland to solve the areas of client harm identified in our Briefing Paper 1 at Page 3. We do not think they can.

This may mean therefore you may be in danger of creating a 2 tier Profession, those in Division 1 with client protection as at present and those in Division 2 who cannot offer that client protection but are championed by the consumer bodies!!
Please remember that no evidence has been presented that Scottish legal practice is anti competitive or detrimental to the interests of consumers.

A SCOTTISH SOLUTION FOR SCOTS LAW

We say it again. Scottish Solicitors have a worldwide positive reputation.

We are privileged to be part of a community of lawyers throughout the world who acknowledge and value the importance of professional independence.

We regret that our own Law Society Council are not in agreement but we will continue to strive to retain our independence by dialogue with you as we have done throughout the development of this issue.

We do so from a principled stance and with a wish to remain part of that worldwide community of lawyers and not tarnished by the charge that we conceded our independence. Only Australia and England have allowed ABS. Even the USA do not allow this. Ask them why not. The issue is the principle of independence. Please have the confidence to ensure a SCOTTISH SOLUTION FOR SCOTS LAW respecting that principle.

The “Dailly Motion” is a balanced, well argued and proportionate compromise respecting Scots Law.

Issued by and further information available from

Ian C Ferguson
Spokesman of Scottish Law Agents Society
B: 0141 552 3422
M: 07891 992331

THE 2 SUCCESSFUL MOTIONS AT THE AGM

Motion 1 by the Council of the Law Society of Scotland

“The Council of the Law Society of Scotland in general meeting call upon the Scottish Parliament to set out and maintain the position in the statutes and regulations of the Scottish Parliament and, in particular, to amend the terms of the Legal Services (Scotland) Bill presently before Parliament to the effect that the majority ownership of any business authorised to carry out work which is reserved to persons qualified to practice as solicitors in terms of the Solicitors (Scotland) Act 1980 should (except in relation to any business not vested in persons so qualified, but which provides legal services as authorised by current law) be vested in persons so qualified or persons so qualified together with other persons who are regulated professional owner managers of that business”.

Votes For 1486 Difference 21 votes Percentage for 50.3%
Votes Against 1465 Percentage against 49.7%

CONCLUSION

MOTION 1 Profession split down middle – no unity

Motion 2 by Mike Dailly and backed by SLAS

The members of the Law Society of Scotland in general meeting call upon the Scottish Parliament to amend the terms of the Legal Services (Scotland) Bill, presently before parliament, to the effect that at least 75% ownership and control of any entity authorised to carry out work which is reserved to persons qualified to practice as solicitors in terms of the Solicitors (Scotland) Act 1980 should (except in relation to any entity not vested in persons so qualified but which provides legal services as authorised by current law) be vested in solicitors who hold valid practising certificates free of conditions (as construed by reference to section 15(1) of the 1980 Act); and that any ownership and control of any such entity not vested in solicitors who hold such practising certificates should be vested in other natural persons each of whom provides services which are in support of, incidental to, or complementary to the provision of legal services by the entity.

Votes For 1558 Difference 154 votes Percentage for 52.6%
Votes Against 1404 Percentage against 47.4%

CONCLUSION

MOTION 2 is the Legal Profession’s clear choice and most unifying compromise.