Law Firms Warned on Debt Recovery

SRA  is now dealing with ensuring law firms, involved with debt recovery work, have proper control over what is being done in their name. Many law companies dealing with this matter have been warned, as the authority has noticed that cases, where solicitors working with debt recovery companies are in danger of breaching the Code of Conduct have increased.

Solicitors, dealing with two different cases, who failed to maintain their independence have been handed out fines and costs orders, counting over £140,000. Many other law firms have received a warning note, letting them know advising firms on putting their independence at risk, or being involved in overly aggressive or misleading correspondence

David Middleton, SRA executive director for post-enforcement, said: ‘While we are committed to working constructively with firms, we will take enforcement action against regulated persons who fail to address the issues and risks associated with debt recovery work. We expect firms to ensure they supervise all work their name is attached to.’

The first case referred to a solicitor, working with a debt recovery company, whose nature of arrangement was found irresponsible and resulted in a breach of his duties. The solicitor was fined £40,000 and ordered to pay costs of £35,000.

In our opinion, it is very important to have all necessary legal documents in place, and what is more, in cases like this it is advisable to request a document, drafted especially for you.

In the second case, the relationship between the solicitor and the debt recovery company was compromising his integrity and independence. The arrangement meant the solicitor had recklessly misled the court by facilitating the conduct of litigation by the debt recovery company.The solicitor was fined £15,000 and ordered to pay costs of £50,000.

 

The Legal Ombudsman Publishes a List of Decisions

An online list of decisions made by the Legal Ombudsman, related to complaints from consumers has been published today. It includes 770 lawyers and law firms from England and Wales.

This report contains information, about the legal services` providers, which have been a subject of complaints submitted to the ombudsman and faced a formal decision. This report will be published every three months, with the first part including information from April to July. Now this list contains about 920 decisions for cases resolved in the stated period.

The list includes facts such as: the number of decisions made by the Legal Ombudsman, regarding each of the firms, the area of law, the date, the nature of remedy awarded and of course, the reason for the complaint.

Adam Sampson-chief legal ombudsman said: What we are publishing is factual data, not opinion, and what we are trying to do with this policy is give objective information about the way the market is operating.’

This move aims to provide transparency on how the system works, to protect the consumer interests and to appeal for higher standards within the legal services area, including the online legal document templates. This report is a reflexion of a careful, detailed review of the profession and its duties, as well as other ombudsman schemes. The next list of decisions is due to be published I November.

Elizabeth France – chair of the Office for Legal Complaints said: ‘We hope this information will help manage consumer expectations of what the Legal Ombudsman can offer and encourage improvement in complaint-handling by lawyers.’

The list of decisions related to complaints from lawyers and law firms was planned to be released in august, however due to some administrative issues, it has been postponed. There were claims that the delay was caused by solicitors` complaints, however the ombudsman denied this.  In addition, he also rejected the statement that “publishing complaints constituted a “naming and shaming” policy”.

Last November, the idea for publishing such a list has been announced and soon after a decision was made. The Law Society opposed it by saying this will not be relevant to the public, but will harm companies with high work volumes, instead.