La clave: Eros-deseo

10. This chapter discusses solicitors’ and advocates’ fees (Parts II and III), how litigation is funded (part IV) and how cases are funded by legal aid (part V). It also reports on research carried out on behalf of the Group into the functions of the auditor of court in relation to the taxation of fees (part VI).

Competition Background

10.1 The EC Report on Competition in Professional Services104 argued that fees charged for professional services should be negotiated freely between practitioners and clients and that fixed prices had detrimental effects on competition, eradicating or seriously reducing the benefits that competitive markets delivered for consumers. Scale fees for solicitors (ie fixed prices) were abolished in Scotland at the end of 1984.

10.2 The EC Report also expressed reservations about recommended prices105 which the Commission believed might have a significant negative effect on competition, as recommended prices might facilitate the co-ordination of prices between service providers and could mislead consumers about reasonable price levels. The Office of Fair Trading for its part had been concerned that fee guidance might inhibit or distort price competition106. 10.3 On 25 June 2004 the European Commission fined the Belgian Architects’ Association 100,000 Euros for failing to abolish the system of recommended fees that applied to its members107. The view of the Commission was that the recommended minimum fee scale of the Association was in breach of competition rules because it sought to co-ordinate the pricing behaviour of architects.

104 _{European Commission report on Competition in Professional Services (paragraph 31) (available at}

http://europa.eu.int/comm/competition/liberal_professions/final_communication_en.pdf ). 105 _{Op cit. paragraphs 37 to 41.}

106 _{For the OFT’s view, see paragraphs 19, 94 and 95 below. Professor Frank Stephen observed that the EC and} OFT reports were following a long line of such bodies in the UK and abroad in making this assertion, but believed that it was contestable on both theoretical grounds and in terms of the limited evidence available whether that was a valid claim. Shinnick and Stephen (2000) argued that the usual claims regarding recommended fees flew in the face of the difficulty of enforcing ‘cartel prices’ in a cartel with a large number of members, where demand fluctuated and where prices were not transparent. The conceptual argument led them to conclude that enforcing a national recommended scale fee for conveyancing would be difficult but that collusion between suppliers in a local market might be more likely. Data for Scotland in 1984 and Ireland in the 1990s provided evidence of considerable discounting on recommended scale fees in both jurisdictions. The evidence for Ireland was the strongest. Conveyancing fees varied from locality to locality frequently below the recommended fee. However, the available data could not differentiate between the local fees being competitively or collusively determined.

107 _{COMP/38.549 - PO / Barême d'honoraires de l'Ordre des Architectes belges, available on the Commission’s} website at http://europa.eu.int/comm/competition/antitrust/cases/index/by_nr_77.html#i38_549. The decision issued on 24 June 2004 and was not appealed. The OFT noted that the decision provided a useful example of the application of Article 81 EC in the context of fee recommendations by a professional body.

General Introduction

10.4 The Group decided to consider solicitors’ and advocates’ fees separately in view of the different statutory and regulatory contexts which applied to each (Parts II and III below). 10.5 The funding of litigation also required separate consideration because :

• Litigation involved the interests not only of the lawyer and client but also of the other party or parties to the litigation, as well as the interests of the Court itself in the efficient and proper dispatch of business108;

• The time and work involved in litigation could not be predicted and controlled as readily by lawyer and client as might be the case with other types of legal work. These matters would be affected not only by the way in which the other party or parties to the litigation chose (quite legitimately) to conduct the case, but also by the Court and by the professional responsibilities which lawyers had to the Court.

• The constitutional significance of access to the courts for the determination of civil rights and obligations and criminal charges, and the availability of proper representation for that purpose, was recognised both at common law109 and under the European Convention on Human Rights110;

10.6 In the context of litigation it was necessary to keep in mind the distinction between: • the question of funding as between the client and his own lawyer (“agent and

client expenses”); and

• the questions which arose where one party to an action (usually the losing party) was required to pay the expenses of another party (usually the winning party) (“party and party expenses”).

A party against whom an award of expenses was made was an involuntary funder of at least part of the other party’s legal expenses. Such a party had had no opportunity to bargain with the lawyer and accordingly was not protected by the ordinary working of the market. The present law did not regard it as appropriate or fair to require a party against whom an award of expenses had been made to bear all the costs in terms of fees and outlays which, as between the client and his own lawyer, were entirely reasonable. The present law accordingly drew a distinction between the fees and outlays which it was appropriate to require a client to pay his own legal representatives and the expenses which it was appropriate to require a party to an action to pay to the other party to the action.

10.7 Civil and criminal litigation also needed to be considered separately :

108 _{E.g. Tods Murray v. Arakin Ltd, Lady Smith.}

109 _{E.g. R v. Secretary of State for the Home Department ex parte Leech (No. 2) [1994] QB 198, 210A-D; R v.}

Lord Chancellor ex parte Witham [1998] QB 575.

110 _{Article 6; Golder v. United Kingdom (1975) 1 EHRR 524, 536. In certain types of case this may require the} State to make legal aid available to the litigant: e.g. Airey v. United Kingdom (1979) 2 EHRR 305.

• Civil litigation, in practice, exhibited a greater variety of types of funding. A relatively small proportion of civil litigation was funded by civil legal aid. Expenses were routinely awarded against the losing party in civil cases.

• By contrast, criminal prosecutions were brought by agencies of the state. The great majority (although not all) of accused persons and persons appealing against conviction were funded by criminal legal aid. There was only very limited provision for the recovery of expenses from another party in criminal proceedings. Thus, criminal litigation was a market which was dominated by state funding.

10.8 Accordingly, the funding of litigation is addressed separately in Part IV below. The legal aid system is described in Part V.

PART II: SOLICITORS’ FEES