Legal scale fees seen as price-fixing

Press, 31 May 1982, Page 10

Legal scale fees seen as price-fixing

Parliamentary reporter

Conveyancing charges set by lawyers amount to collective price-fixing and would be prohibited under the Commerce Act, the Consumer Council has told Parliament’s Statutes Revision Committee in submissions on the Law Practitioners Bill. The council said that research by it had shown that more than half of the lawyers in a survey of 71 had made additional charges for “above-scale” work. A conservative estimate was that in most of those cases the extra charge had been unjustified.

Lawyers who became more efficient in conveyancing could not offer a price lower than the minimum price sanctioned by the Law Society for fear of disciplinary action. They would only become richer and risk the further suspicion of the public.

The society justified its scale of charges on grounds that it worked as an informal brake on fees and that if it were removed, charges would rise. It also argued that abolition of the scale would force lawyers to make the difficult conversion to “time-costing.” However, computer-based accounting systems had become common tools of trade, even in relatively small firms, and time-costing had replaced scale fees for estate administration and company formation. The transition to timecosting for conveyancing could be made tomorrow. All that remained was for the society to allow it or for a change in the law to compel it.

Professional protectionism was the only other reason for retaining the profession’s statutory monopoly on conveyancing and for retaining

the scale fees and that was “no good reason at all.” • .Price competition in legal services did not need to be risky for consumers so long as the lawyers’ fidelity fund, adequate disciplinary procedures, and the suit for professional negligence remained. The council said that the profession’s monopoly should give place to “para-legal” services offering conveyancing, estate administration, and company-formation services.

If neighbourhood law offices were able to-provide conveyancing and commercial services at below-scale charges, their economic survival would be assisted. At present such offices depended on the voluntary good will of lawyers, who had a conflict of loyalties. The society no longer funded community law offices and nothing in the bill

would oblige the society to allow others to provide some legal services at a lower rate than scale fees.

If conveyancing remained the monopoly of lawyers, then scale fees should have a maximum, but no minimum, and the fees should be controlled and reviewed by an independent body, probably the Justice Department or the Department of ,Trade and Industry, which should be empowered to stop excessively high and unjustified fees from being charged. The council also said that a two-year to three-year diploma course at tertiary level would provide a “good deal of healthy competition in non-contentious fields of conveyancing trusts, wills and estates, and company formation.”

Such a course would train students to a high degree of expertise in one field of law only. The required passes in full courses of law might be of little practical use to a candidate who wanted only to be a conveyancer.

The council welcomed the bill’s requirements which would allow lay observers to examine on request the Law Society’s handling of a complaint about the conduct of a lawyer or a lawyer's employee. It said that proposed lay membership of district and national disciplinary tribunals for lawyers was also a welcome indication that the profession was recognising its practical answerability to the public.