Law firm bankruptcies predicted as Lees Lloyd Whitley closes

first_imgInsolvency experts have predicted a rise in the number of law firms that will face bankruptcy in the coming months, after a well-known firm in the north-west closed its doors last week. Lees Lloyd Whitley (LLW) – a 190-year-old Merseyside firm with 90 staff – ceased trading and is now in administration. The closure is understood to be the result of the severe downturn in the property market, which hit LLW’s remortgaging work, coupled with the recent loss of some major clients. The firm’s work has been divided between a number of regional firms, and some of the partners have moved to those firms. Administrator Parkin S Booth & Co was unable to confirm the number of redundancies or the level of the firm’s debt. Meanwhile, insolvency experts warned that more law firms are likely to face collapse, particularly at the smaller end of the market. Joanne Wright, insolvency partner at administrators Begbies Traynor, said: ‘LLW won’t be the last practice to go this way. We’ll see more firms going into administration over the next three years.’ She predicted: ‘We haven’t see the worst of it yet and we’ll be in difficult trading conditions for the foreseeable future.’ Wright said she had seen a ‘significant increase’ in the number of solicitors entering into individual voluntary arrangements (IVAs) with their creditors. The procedure enables them to ringfence their debt and either continue trading or sell their business. ‘IVAs used to be a rarity for solicitors and other professionals, but now we’re seeing them on a regular basis,’ she said. Wright warned that partners in small firms that had not become limited liability practices risked losing everything, including their home, if they went bankrupt. She advised those in financial difficulty to seek advice. Many firms, she said, had expanded on the back of the success of their property departments, and were now suffering due to a lower workload and higher overheads. James Money, restructuring director at accountants Smith & Williamson, stressed that the hike in insurance was also hitting firms. He said the bigger firms which had been robust in their approach to making redundancies were more stable now, while smaller firms were suffering. ‘We’ll see a large number of firms closing or going through some sort of insolvency process,’ he predicted. Money said professional practices were often poor at cash management and when problems arose as a result, they were hit harder than they might have been.last_img read more

Unpaid volunteers not covered by discrimination legislation

first_imgVolunteers who give their time unpaid to charities are not covered by domestic or European equal treatment legislation designed to protect employees, the Employment Appeal Tribunal has ruled. The ruling arose from a claim brought by a citizens advice bureau volunteer who alleged she had received less favourable treatment under the Disability Discrimination Act 2005 (DDA). The employment tribunal struck out the claim on the grounds that only employees, not volunteers, are protected by the DDA. The volunteer appealed this decision, but the EAT dismissed her argument that volunteering came within the definition of ‘occupation’ under the Equal Treatment Framework Directive (ETFD). The ruling would apply to solicitors volunteering at citizens advice bureaux and other projects. Meanwhile, in a separate case the EAT has ruled that the DDA should be interpreted as covering those who care for disabled people, as well as those who are themselves disabled. The EAT upheld the case of Sharon Coleman, a legal secretary who claimed she had been discriminated against by London firm EBR Attridge Law because she had to take time off to care for her disabled son. The judgment followed a ruling in the European Court of Justice last year that the ETFD’s prohibition of discrimination ‘on the grounds of disability’ did extend beyond the person who is disabled. Lucy McLynn, employment partner at City firm Bates Wells & Braithwaite which acted for Coleman, said: ‘This case has lasted for four and a half years and five hearings. It now returns to the employment tribunal, where Sharon may at last get a judgment.’ Anthony Sakrouge, head of employment at London firm Russell-Cooke who represented Steve Law of EBR Attridge Law, said his client was disappointed by the ruling and was considering whether to appeal.last_img read more

Firms face court action risk over money laundering reports

first_imgLaw firms could find themselves being sued for reporting suspected money laundering following a Court of Appeal decision last week. Law firms, banks and other businesses handling client money are obliged to file Suspicious Activity Reports (SARs) to the Serious and Organised Crime Agency (SOCA) where they suspect a client of money laundering. Last week the Court of Appeal ruled that client Jayesh Shah had the right to test in court HSBC Private Bank’s claim that, complying with obligations under the Prevention of Crime Act (POCA) 2002, it had grounds to submit a SAR alerting SOCA to its suspicions of money laundering. Shah has claimed that delays arising from the bank’s report to SOCA led directly to $300m (£192m) being seized from his Zimbabwe bank account by the Zimbabwe authorities. HSBC, which has the same obligations under POCA as law firms, will now be required to prove in court that its suspicions were held in good faith, while Shah’s lawyers will be allowed to examine witnesses and to sue for damages. Delivering the judgment, Lord Justice Longmore said: ‘The normal procedures of court are not to be sidestepped merely because parliament has enacted stringent measures to inhibit the notorious evil of money laundering.’ Sarosh Zaiwalla, senior partner of London firm Zaiwalla & Co, who acted for Shah, said that before this ‘landmark judgment’, banks and law firms ‘could act on a hunch about a client’s transactions without disclosing the necessary information’. A client could now insist on a ‘full trial with proper disclosure’ to test whether the report of suspected money launderinghad a ‘factual basis’ and was made in ‘good faith’. Sue Mawdsley, a partner at Liverpool law firm Legal Risk, said solicitors should be ‘uneasy’ about the Court of Appeal’s ­ruling. ‘How do you definitively prove reasonable grounds for your suspicions when they may be based not on solid proof, but on years of experience? And then there is the issue of privilege, of what can and cannot be divulged in proving grounds or defending a claim.’ Omar Qureshi, a partner in the dispute resolution group at City firm CMS Cameron McKenna, said: ‘It is no longer sufficient to assert you have a suspicion, you must demonstrate it. Law firms are advised to look at their anti-money laundering processes and training to avoid the potential for loss.’last_img read more

Gunfight at the EU Corral?

first_img Jonathan Goldsmith is the secretary general of the Council of Bars and Law Societies of Europe, which represents around a million European lawyers through its member bars and law societies interpretation will have to be provided for communication between client and lawyer, as well as during investigations – such as police questioning – and at trial; the proposal covers written translation of all essential documents such as the detention order, the charge sheet or indictment or vital pieces of evidence, and so citizens will not have to rely on an oral translation that only summarises the evidence; and citizens have the right to legal advice before waiving the right to interpretation and translation, so that people are not pressured into giving up their rights unless they have spoken to a lawyer. What does this tell us? First, it looks as if commissioner Reding is going to play a tough game, and the split between justice and home affairs that she represents may ensure that justice gains. Second, the member states have lost power as a result of the Lisbon Treaty, with the commission now able to turn to the parliament for support in the justice field, which was not possible before. And third, the EU’s signing up to the ECHR, about which I wrote recently, is having some early positive effects on policy. As commissioner Reding mounted her horse and rode out of town, she was heard to say: ‘That’s what’s important, to feel useful in this old world, to hit a lick against what’s wrong for what’s right even though you get walloped for saying that word. ‘Now I may sound like a Bible beater yelling up a revival at a river crossing camp meeting, but that don’t change the truth none. There’s right and there’s wrong. You got to do one or the other. You do the one and you’re living. You do the other and you may be walking around, but you’re dead as a beaver hat.’ We had a glimpse of the future this week. There was a shoot-out at the EU Corral involving the new justice commissioner and the member states. The weapon used was the Lisbon Treaty, and the quarrel broke out, beyond the tumbleweed and swinging saloon doors, over the need for minimum procedural safeguards for suspects and defendants around the EU. When the smoke cleared, the member states were all lying dead, and the commissioner was cleaning the barrel of her gun, with a satisfied smile on her face. The back story is this. The EU has been trying for 10 years to balance the enhanced rights of the prosecution, as provided in instruments like the European Arrest Warrant, with better rights for the defence, mainly through ensuring common rights for defendants around Europe. And for 10 years, some member states – including the big, bad UK – have been resisting. All right, said its supporters in desperation last year, you won’t give us this package of rights as a whole, and so we will take them one by one, starting with the first right (or Measure A as it is called): the right to interpretation and translation. This is the simple and basic right to have a criminal case interpreted and translated for you as a suspect or defendant if you do not speak the local language. The member states which supported going ahead with their own measure on this subject found it difficult to resist such a virtuous right altogether, but they watered it down considerably and nearly got away with it. But, in the manner of the most thrilling western, their time to decide on their own ran out on 1 December of last year when the Lisbon Treaty came into force, giving the European Parliament (which has backed the commission in this matter) co-decision powers. Suddenly, the member states can no longer do exactly as they wish. Enter Viviane Reding, the new justice commissioner, wearing a Stetson, holster, bandanna and chaps bought in her native Luxembourg. She hollers over to the member states huddled by their rustled horses (the actual words are my own): ‘Your watered down version of Measure A is below the level of the standard required by the European Convention of Human Rights (ECHR).’ She waves a copy of an opinion received from the Council of Europe which says this. ‘I do not want the first case against the European Union, now that we shall be subject to the ECHR, to be as a result of introducing a sub-standard right on my watch. Improve your offer or I will re-introduce a commission draft which meets the ECHR standard. Then my good friends in the parliament can decide which version they prefer.’ There is mayhem with gunshots before the smoke clears, revealing the victor. And so the commissioner introduced a new draft this week. It has all the things which we at the CCBE have been asking for (and which was missing from the member states’ watered down version), such as: last_img read more

Anger over £600m in unpaid court fines

first_imgThe government was accused of ‘economic illiteracy’ this week, as it emerged that the amount owed in outstanding court fines has risen to more than £600m in the past year, while the number of enforcement officers employed to collect them was slashed by 12%. Solicitors expressed anger that the Ministry of Justice was failing to capitalise on such a significant revenue stream when the legal aid budget is facing fierce cuts. The latest figures from the MoJ show the current outstanding balance for financial penalties stands at £609.5m – a rise of £21m in the past 12 months. Over the same period, the number of enforcement officers employed in HM Courts and Tribunals Service fell from 453 to 396. The MoJ said it takes the issue of fine enforcement ‘very seriously’ and can manage the service more efficiently even with fewer officers. But legal aid lawyers criticised the decision to cut staff responsible for collecting income at a time when £350m has been sliced from the legal aid budget. Carol Storer, director of the Legal Aid Practitioners Group, said it was difficult to understand why the government was scaling back an important revenue stream. She added: ‘Surely it would make sense to pour more resources into enforcement and recouping some money for the justice budget, rather than cutting this crucial element – especially at a time when legal aid is taking such a hit.’ Mark Serwotka, general secretary of the Public and Commercial Services Union, said: ‘The level of debt outstanding to the courts is an absolute scandal when you consider the jobs that have been cut and those that are threatened. ‘The government should be creating jobs, not cutting them, and investing in public services like our courts to help our economy to grow. The maths is simple, but decisions are being driven by economic illiteracy.’ Outstanding debts include fines imposed in magistrates’ and Crown courts, prosecutor costs, compensation orders, victims surcharges, and unpaid fixed-penalty notices. The amount outstanding also includes the balance of accounts being paid by agreed payment plans. The MoJ said it has introduced better training and equipment for officers; new payment methods including online payments; more use of telephone debt chasing; and text messages to non-compliant offenders. HMCTS is also working with magistrates to get more fines paid on the day they are imposed. ‘The courts will do everything within their powers to trace those who do not pay,’ a spokesman said.last_img read more

ABSs at risk of criminal ownership, Law Society warns

first_imgThe Law Society is pressing the Ministry of Justice to make an urgent amendment to the Legal Services Act to prevent non-lawyers with spent criminal convictions from becoming owners of alternative business structures. Society chief executive Desmond Hudson has written to justice secretary Kenneth Clarke urging him to take action before the final provisions of the legislation, which will allow for external ownership of law firms, come into force in October. Under current rules, anyone seeking admission as a solicitor and any non-lawyer seeking to become a manager in a legal disciplinary practice must disclose full details of all past convictions, no matter how old, because they are exempted from the Rehabilitation of Offenders Act. However, this exemption does not apply to non-lawyers seeking to become owners of ABSs, meaning that they would not be compelled to reveal their spent convictions. In his letter to Clarke, Hudson said the Society was surprised that the government had not acted to address the issue, given the concerns raised by the Conservative party while in opposition. He quoted justice minister Jonathan Djanogly, who when in opposition had said that the ‘fit to own’ provisions were crucial to ensure public protection, and needed to be in place before external ownership of ABSs could be safely permitted to ‘avoid the spectre of law firms being owned by criminal elements’. Hudson warned of the ‘severe’ consequences of failing to deal with the issue, which would leave an individual who had previously been imprisoned for fraud able to conceal this when seeking approval to own an ABS. Russell Wallman, director of government policy at the Law Society, said: ‘The question of fitness to own is fundamental to the operation of ABSs, and it beggars belief that the MoJ would be in any doubt whether it will ensure that all convictions are disclosed. ‘It’s bizarre that the government hasn’t done anything to change this yet; there is no rational explanation. I can’t see that the MoJ will want to stand up for the rights of criminals to own law firms.’ A spokeswoman for the Solicitors Regulation Authority said that to fulfil its role as a risk-based regulator it was seeking an assurance from the MoJ that spent convictions of potential owners will have to be disclosed. An MoJ spokesman said the Legal Services Board has submitted a business case seeking to have additional provisions added to the Rehabilitation of Offenders Act Exceptions Order, but a decision had not yet been made.last_img read more

Yankee, go home

first_imgTo continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGIN Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our community Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters Subscribe now for unlimited access Get your free guest access  SIGN UP TODAYlast_img read more

Consider the client

first_imgGet your free guest access  SIGN UP TODAY Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters To continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGIN Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our community Subscribe now for unlimited accesslast_img read more

Hansom

first_imgTo continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGIN Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters Subscribe now for unlimited access Get your free guest access  SIGN UP TODAY Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our communitylast_img read more

Pay and display

first_imgStay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our community Get your free guest access  SIGN UP TODAY Subscribe now for unlimited access To continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGINlast_img read more