Legal

News focus: 19 things for solicitors to look out for in 2023


1. The Ministry of Justice will embark on a major review of civil legal aid. The terms of reference and process are expected  before Christmas – but it could be next Christmas by the time practitioners get to see the final report and any proposals. How much will the sector have shrunk by then? There were 2,134 providers in April 2012 – a year before the Legal Aid, Sentencing and Punishment of Offenders Act came into force. A decade later, the figure stood at 1,369.

2. Expect further fallout on criminal legal aid, after Dominic Raab decided not to implement in full Lord Bellamy’s principal recommendation of a minimum £135m extra per year. With counsel already instructed on a potential legal challenge and practical options for unionising, practitioners will decide whether to set up their own union or join an existing union, which will enable them to take industrial action. Worse, as the Law Society has repeatedly warned, some will just quietly quit. Meanwhile, the Criminal Legal Aid Contractors Association, made up of law firm owners with crime contracts, will be up and running. The new group will operate like a trade association and hopes to become a statutory consultee.

3. The Marriage and Civil Partnership (Minimum Age) Act 2022 is one to watch, Imran Khodabocus, director at The Family Law Company, predicted: ‘I hope we will see more young people protected from forced marriage as it will raise the legal age of marriage to 18 as opposed to now being 16/17 (with parental consent). It will also make it a criminal offence to facilitate this generally rather than just “coercing” someone to get married underage.’

Dame Victoria Sharp 1

4. There will be a new face at the top of the judiciary, when the lord chief justice, Lord Burnett of Maldon, retires on 30 September after six years in office. Will England and Wales get a lady chief justice in 2003? Dame Victoria Sharp (pictured, right), president of the King’s Bench division and effectively the chief’s deputy on the criminal side, is said to be in the frame. But so too is Sir Geoffrey Vos, master of the rolls.

5. Conveyancers can expect another turbulent year. As interest rates continue to rise, house prices are falling at their fastest rate since 2008. A stamp duty cut on properties in England will remain in place until March 2025. For now however, says Search Acumen, which analyses Land Registry data, transaction levels remain high. Search Acumen director Andy Sommerville, said: ‘Mortgage fall-throughs are a big concern as buyers try to beat the tide on increasing interest rates, while the three Gs are back in force: gazundering, gazumping and gazanging. Around 20% of all residential transactions fall through pre-completion on a normal basis, but the industry is generally accepting that this figure will rise sharply in line with increased market uncertainty. It’s already taking buyers over double the time to get to completion than it did pre-pandemic.’

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6. Costs will remain a big source of controversy and satellite litigation in 2023. The Civil Justice Council will report the outcome of its consultation on budgeting, guideline hourly rates and fixed recoverable costs (which are due to be extended in October 2023). The fallout from the Belsner decision will also continue, as firms continue to fight off claims from disgruntled former clients wanting to claw back damages deductions. Jonathan Wheeler, managing partner at Bolt Burdon Kemp, said: ‘For most civil litigation lawyers, the inevitability that claimants’ costs will be fixed for intermediate claims (from £25,000 to £100,000) is bound to affect their practice. With an implementation date of October,  firms will need to ensure they are ready for the change and weigh up their options, working out whether they will still be able to turn a profit from this work, or get out of the road completely. Full details are awaited but there must be concerns as to whether the costs allowed will be sufficient, and annually uprated for inflation, with proper exemptions and safeguards baked into the process. It would appear that predicting the ultimate value of a case, and selecting the correct “band” at an early stage, will be key.’

7. The personal injury sector is awaiting the outcome of last month’s Court of Appeal hearing on hybrid claims coming through the RTA portal. A ruling could be handed down before Christmas, and many firms handling such cases will hope that non-whiplash damages remain relatively untouched if their business models are to hold up. Calls may also grow for changes to the portal if the system itself continues to cause problems.

8. Related to the above will be inevitable further contraction of the personal injury market. Firms of all sizes may seek to escape an increasingly difficult sector so expect increased speculation about potential mergers and acquisitions. And not just in PI. The number of law firms has fallen in the last 12 months and most industry experts expect that trend to continue.

9. The Post Office Horizon IT Inquiry will focus its attention on the role played by the legal profession. From May to July, phases four and five of the inquiry will hear evidence on civil and criminal proceedings, knowledge of and responsibility for failures in investigation and disclosure, and conduct of the group litigation. The SRA is ‘closely following’ the inquiry and has a court order gaining access to all relevant documents. 

Tom Hedges holds up a bottle of Prosecco as he celebrates the verdict with other former Post Office sub-postmasters outside the High Court

10. Also at the Cube, the regulator will continue to deploy its new powers to fine solicitors and firms up to £25,000. This power could be extended further by the Economic Crime Bill presently going through parliament. The SRA will also reveal early in 2023 how it expects to report such cases, amid concern that fewer detail will be given than is customary for the Solicitors Disciplinary Tribunal. We can also expect fewer cases to be sent on to the SDT – which may be welcome relief given the tribunal has to relocate next year after a costly dispute with its landlord.

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11. The Legal Services Board will want to see greater efforts relating to transparency and ongoing competence from the frontline regulators. There could be further requirements regarding the information firms have to provide and possibly a new regime for continuing professional development, after the oversight regulator warned earlier this year that current checks on solicitors’ competence are ‘out of step with public expectations’. The SRA and other regulators have been told to introduce new measures in the next year.

12. A boosterish report from lobby group TheCityUK this week noted that top-100 firms have grown their revenues 50% over the last decade. But as the economy slides, the mid- and post-pandemic boom may be subsiding. The magic circle, meanwhile, is in danger of becoming  ‘a training service for the leading (and much more profitable) US firms, gradually surrendering their “brand charisma”’. That’s according to former Slaughter and May senior partner Christopher Saul. Will one of the quintet take the plunge and consider a stockmarket flotation in 2023? They are more likely to emulate the accountants and spin off discrete practices or offices, reckons Saul.

Gavin Tyler

13. Can we expect a partial ceasefire in the much talked-about ‘war for talent’? Gavin Tyler (pictured, right), managing partner of Tunbridge Wells and London firm Cripps, said: ‘Over the last two years it has been very difficult to recruit into our regional office in Tunbridge Wells given its proximity to London. As always, recruitment will be driven by the biggest firms. If they reduce hiring or look to shed some staff we will continue to face challenges, mainly on salaries. Our people value proposition focuses on the additional benefits of working for a firm like ours which can offer far more than a competitive salary.’

14. Those fringe benefits increasingly include hybrid working, which is here to stay. Almost half of lawyers working in large law firms are willing to walk away if told they have to attend the office full-time, according to a survey carried out this summer. Said Cripps’ Tyler: ‘The challenge for firms like ours is not so much people wanting to work full-time from home, but finding the right balance between office and home working. It is not a generational contrast, with older managers seeking higher office attendance, but how we establish the greatest efficiencies for the business and support our clients, while recognising that our people want and need new ways of working. We will continue to experiment with many different models.’

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Vijay Parikh

15. Qualified lawyers do seem likely to remain in short supply, for now at least, according to Vijay Parikh (pictured, left), managing partner at  London firm Harold Benjamin. ‘Many experienced lawyers have left the traditional law firms in favour of consultancy-based businesses such as Taylor Rose or Keystone Law,’ he noted. ‘Therefore the traditional law firms face challenges of recruiting lawyers to fill senior or head of department or team leader roles. Furthermore, those lawyers who are two- to three-year qualified and qualified through Covid may not have the one-to-one training or experience necessary to deal with certain challenges. The burden on more senior, experienced lawyers is more significant today than ever before.’

16. That may be good news for practitioners seeking decent pay rises. ‘It is imperative that law firms retain staff. The costs of replacement, training and downtime will outstrip any inflationary pay increases that may be required to retain talent,’ stressed Parikh.

17. On to a hardy perennial – professional indemnity insurance. The legal profession has experienced brutal market conditions in recent years with surging premiums, a lack of appetite from existing insurers to take on new clients, and an absence of new providers. However, broker Miller detects signs of more positive conditions in its latest market report. ‘The October renewal period saw measured relief from the extreme pricing pressure endured by some law firms in recent years, and a positive shift in attitude from insurers to engage,’ said Miller. ‘However, insurers remain extremely selective. Rate decreases were rare for firms, however increases were much less severe and showed true signs of stabilising.’

18. Despite – and sometimes, because of – sanctions, cases involving wealthy Russians will continue to feature in the commercial courts. However a six-week hearing listed for January may be one of the last of its kind in terms of scale. Gorbachev v Guriev is the largest in a series of legal claims surrounding the ownership of PhosAgro, a Moscow fertiliser company once owned by Mikhail Khodorkovsky, a prominent critic of Vladimir Putin who is now in exile.

19. And finally. LawTech will continue to be a hot area of development, though we can expect to see consolidation in the market as investors in startups begin expecting to see profits. In other tech news, a new ‘delivery partner’ will take on the government-funded LawTechUK programme in April following the re-procurement of TechNation’s contract. The initiative’s next phase has £3m to spend over two years: expect a focus on access to justice. Meanwhile, in September, the Solicitors Regulation Authority and Law Society will start work on a project to explore ways to increase the use of technology-enabled dispute resolution. The SRA is being funded with £119,691 from the latest round of the business department’s ‘Regulators Pioneer Fund’.



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