Quis custodiet ipsos custodes?

Many of my colleagues at the Bar believe that I spend my days with an abacus, counting out 6 minute units of time, and the minutes of my own life in coffee spoons.

Far from it. As I have frequently observed, the law and practice of costs and litigation funding throws up more problems of fraud, negligence and professional regulation than any other sphere. Part of my work involves the law relating to the regulation of claims management companies, some of whom burn “white hot” in terms of the acceptability of their practices.

One case that I dealt with some years ago concerned a man who set up as an unregulated claims management company, systematically targeting disabled people, who often had very sound claims for disability discrimination and exploiting their claims for profit.

Earlier this year, long after the hearing I dealt with at Central London County Court in 2012, he was sent to prison.

The facts of the case are set out here:

http://www.disabilitynewsservice.com/ministry-of-justice-failure-may-have-exposed-hundreds-to-fraudsters-activities/

The case illustrated to me two particular points.

The first was the comprehensive net of regulatory provisions which forbade such activity.

First there are the provisions which preclude people from pretending to be solicitors. Section 20 of the Solicitors Act 1974 (as amended by the Legal Services Act 2007 on 8th March 2008) states that no unqualified person may act as a Solicitor and any person who contravenes this prohibition is guilty of an offence and liable on conviction on indictment to imprisonment for a term of up to 2 years or to a fine or both.

Section 21 of the Solicitors Act 1974 catches an unqualified person who wilfully pretends to be or takes or uses any name title additional description implying that he is qualified or recognised by law as qualified to act as a solicitor and provides that he shall be guilty of an offence and liable on summary conviction to a fine.

Secondly, there are the provisions which provide criminal sanctions for unregulated persons, carrying out litigation or exercising rights of audience. Section 12 of the Legal Services Act 2007 establishes a number of reserved legal activities including inter alia the exercise of a right of audience and the conduct of litigation and makes them subject to statutory regulation. Section 13 provides that the question as to whether a person is entitled to carry on an activity which is a reserved legal activity is to be determined solely in accordance with the provisions of this Act and a person may only carry on such an activity if the person is authorised or exempt within the statutory scheme.

Section 14 of the Legal Services Act 2007 establishes an offence for a person to carry on an activity which is a reserved legal activity unless that person is entitled to carry on the activity such offence being punishable on summary conviction to a term of imprisonment of up to 12 months or a fine or conviction on indictment to a term not exceeding 2 years or a fine or both.

Section 17 of the Legal Services Act 2007 creates a further offence for a person wilfully to pretend to be entitled to carry on any activity which is a reserved legal activity when that person is not so entitled or with the intention of implying falsely that that person is so entitled to take or use any name title or description.

Pursuant to Section 18 and 19 of the Legal Services Act 2007 the Act further defines who are authorised persons and who are exempt persons.

Schedule 2 of the Legal Services Act 2007 the conduct of litigation is defined to mean the issuing of proceedings before any Court in England and Wales, the commencement prosecution and defence of such proceedings and the performance of any ancillary functions in relation to such proceedings such as entering appearances to actions.

Thirdly, any fee arrangements are likely to be void and unenforceable, in this context. Fee arrangements provided by non-qualified persons, unlawfully conducting litigation on a “no win-no fee” basis, are usually unlawful contingency fee arrangements and void at common law and contrary to and prohibited by the statutory scheme for Conditional Fee Agreements set out in the Courts and Legal Services Act 1990.

Finally, there are the provisions which apply to the provisions of claims management services. Perhaps most significantly, by Section 4 of the Compensation Act 2006 a person is prohibited from providing regulated claims management services unless he is authorised or exempt or a waiver has been granted or he is an individual acting otherwise than in the course of a business.

Pursuant to Section 7 of the Compensation Act 2006 a person commits an offence if he contravenes Section 4 and is liable on conviction on indictment to imprisonment for a term not exceeding 2 years or to a fine or to both or on summary conviction for a term of imprisonment not exceeding 12 months or to a fine not exceeding the statutory maximum or to both.

The Compensation (Regulated Claims Management Services) Order 2006 Regulation 4 provides that services of the kind specified are prescribed in relation to the making of a claim of a kind described in paragraph 3 or in relation to a cause of action that may give rise to such a claim.

Under Regulation 4(3) the kinds of claim include claims for personal injuries as defined by the Civil Procedure Rules 1998 which includes any claim which may give rise to a claim for inter alia a mental illness such as depression or “damages for a mental impairment” which would include an award for injury to feelings or in respect of claims in relation to employment including discrimination claims.

The second point that struck me about the case was that all these measures, providing consumer protection to the public were effectively worthless, if, there was no enforcement of them by the public authorities: leaving in this case a vulnerable section of the public exposed for many years to the actions of a criminal and without access to justice.

Leave a Reply

Your email address will not be published. Required fields are marked *