Ofgem has criticised a number of utility companies which have fallen into the same trap of using “alternative branding” when sending debt recovery letters. The alternative branding is misleading and suggests the letters are being sent from an independent firm of solicitors or debt recovery agency.

The bad publicity and regulator pressure is forcing changes. Ofgem has stated “while this practice was once widespread, the vast majority are no longer using alternative branding, with some having changed their practice recently”.

Wonga has been made to pay compensation by the FCA for similar conduct.

The Law Society has taken no action.

If our site, free guide or courses have been of help, please let others know on social media at Twitter, Facebook and Google+.

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So whilst solicitors may stress the importance of terms and conditions and taking swift and effective action, they fail to put it into place themselves.

The survey consisted of 321 firms and was conducted by LDF, which found an average delay of 94 days. This is much higher than the average across business, which is 41 days.

If our site, free guide or courses have been of help, please let others know on social media at Twitter, Facebook and Google+.

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In a further extension, Legal Executives are seeking to obtain permission to run their own practices, according to a consultation by the Legal Services Board.

Many Legal Executives are highly skilled and proficient but is this a dumbing down of the legal profession? Legal executives are regulated by the Chartered Institute of Legal Executives.

Concerns have been made however, as to whether this is a slippery slope. Who else will be able to set up in competition to firms of solicitors providing legal advice? For example, if paralegals were allowed to set up their own firm, who would regulate them? The brand of a “solicitor” is very valuable and should stand for quality and expertise.

However, in the light of pressures on court users (vast removal of legal aid encouraging me litigant in person) will the consumer be looking for a cheap and cheerful option? The Law Society places a restriction on who can “conduct litigation”. Only regulated individuals can carry it out, usually solicitors. That is one of the reasons why we do not provide legal advice or conduct litigation. We provide training on how to carry out to get the litigation yourself.

Further concerns of the dumbing down have been raised after the Solicitors Regulation Authority suggested that paralegals who have passed the legal practice course (a course that must be taken after completing a degree but before starting a training contract) may not have to carry out a training contract at all. They may be able to avoid a training contract requirement if the individual can show “other assessed learning and work-based learning” through “equivalent means”.

If our site, free guide or courses have been of help, please let others know on social media at Twitter, Facebook and Google+.

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Direct access barristers

Barristers have for a number of years been able to take instructions directly from clients, provided they have taken the appropriate training. This is known as direct access.

In a report by the Bar Council and Bar Standards Board, it is reported that one in five barristers plans to complete the new public access training, taking the total number of barristers who have carried it out, to be in the region of 7,500.

Direct access to barristers can be very useful for litigants in person who need some legal assistance during their case, for example conducting a hearing or trial.

Those conducting their own litigation should look at the scheme if they require assistance but do not need need full representation by a solicitor.

For example, people dealing with small claims may want to instruct a barrister to conduct the trial for them. The cost may not be recoverable but it might tip the trial in their favour and result in a win. Just because legal costs in small claims are generally irrecoverable it doesn’t mean that incurring those legal costs cannot benefit the outcome overall.

So Why Bother With Solicitors?

Solicitors still and always will fulfil a crucial role in the legal process. Countless disputes are resolved without the case getting anywhere near a barrister. When barristers do become involved, the preparation of the case and evidence by a solicitor is fundamental to the success of the presentation of the case by the barrister at any hearing or trial.

If our site, free guide or courses have been of help, please let others know on social media at Twitter, Facebook and Google+.

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Cash flow problems are forcing some businesses to resort to using pay day loans to help short term.

Traditional lenders such as banks have been criticised for not supporting small businesses during the recession. The government has tried to step in and made some funds available.

In a desperate attempt, some businesses are relying upon payday lenders to help them out.

“Pay day loans are an incredibly expensive means of finance and only put off the problem for a further month.”

Cash Flow Problems And Pay Day Lenders

The problem with payday loans is that they simply put off the problem of cash flow for another month, with the problem becoming larger.

It is better for businesses to take other steps to try to avoid cash flow problems in the first place.

Soon, the Financial Conduct Authority will take over regulation of payday lenders. It will introduce new measures such as limiting customers to roll over loans only twice. It will also be introducing cap on interest and charges.

Payday loans should only be used as a form of last resort and efforts should be made to improve cash flow by other means.

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There are proposals to modify the roles of Judges at trial. They may be encouraged to take greater control in civil trials in the future.

In a recent speech by Lord Thomas, he said he wanted to reduce expenditure by the courts significantly. Part of this process would be looking at how claims are dealt with in both be civil and criminal courts.

“Judges already have to take a more active role and control claims where litigants are not represented, such as in small claims. Whether they will take such a role in higher value claims when lawyers are present, remains to be seen.”

Why Change The Role Of Judges At Trial, Haven’t There Been Changes Already?

Lord Thomas noted that with legal aid less available in civil and family claims, a lot of people involved in those claims were struggling along without legal representation. That can put an increased burden on the courts. Many litigants in person do not understand the court rules and requirements, which can require which can result in hearing is having to be adjourned or court staff having to correct errors. Such problems should not occur if legal representatives are dealing with a claim.

Adversarial –v- Inquisitorial

One of the suggestions was to increase the input of Judges at trial. The court system is referred to as being adversarial. This means that the parties fight the matter out before the Judge he listens to what is put before him.

The proposed change is that Judges should become more inquisitorial, with them asking questions more frequently and directing the evidence.

Whether these changes come into force remains to be seen. There were significant changes to the civil court system in 2013 so it appears unlikely there will be further changes any time soon. However, it may change the attitude of Judges dealing with claims to encourage them to become more involved rather than sitting back and listening to the evidence alone.

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Andrew Mitchell Court Case

The Andrew Mitchell court case, is a claim brought by the politician who became stuck in the middle of the “plebgate” affair, when it was alleged, amongst other things, that he had called a police officer a pleb.

Andrew Mitchell has since commenced a defamation claim against the Sun. He claims that the newspaper printed allegations which were untrue and which have damaged his reputation.

What the case is about is not important to this post but what is of huge importance is the decision of the Judge about Andrew Mitchell’s failure to comply with a court order. The order made by the Judge makes it crucial that people using the courts understand the importance of complying with a court order and meeting the deadlines set.

Change In The Court Rules Affected The Andrew Mitchell Court Case Significantly

The civil court rules changed significantly in April this year. Some of the changes involved litigation funding as no win no fees were effectively killed off, as success fees and after the event insurance premiums would no longer be recoverable from the defendant. The rules also changed about how lawyers and Judges should approach the failure to comply with a court order, for example, missing a deadline or failing to do something as ordered.

In the Andrew Mitchell court case, his lawyers were late in filing a costs budget with the court and serving it on the other side’s solicitors. The Judge decided that because they had missed the deadline, the following court hearing suffered because the parties had not had long enough to consider the budget information Andrew Mitchell was relying upon. The Judge decided that because of the delay, that Mr Mitchell will not be entitled to his legal costs, even if he wins at trial. Those costs are likely to be tens of thousands of pounds. His lawyers appealed the decision and the court of appeal rejected the appeal, so the original decision still stands.

This is a huge decision and one which would not likely have happened in the past. The courts previously would likely have allowed the late service of the document but ordered the late party to pay the other side’s additional costs caused by the late service, for example if the hearing had to be put back to a later date.

Going forward, parties who miss deadlines might not only be unable to recover costs but it might affect the evidence they are able to rely upon at trial and may even result in a claim or defence being thrown out. What is clear is that anyone dealing with the courts must understand the rules and the importance of meeting court deadlines. We teach you what you need to know in our courses to help you avoid slipping up.

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Is The Future Of Legal Advice Online?

Legal advice online is a dangerous thing.

There are many people prepared to give their opinion of how a problem should be resolved and who is right or wrong. People can easily quote case law and statutes in blogs which are out of date or simply incorrect.

If you rely on incorrect advice or information taken from the internet, it might well result in you mistakenly pursuing or defending a case you were always destined to lose.

However, solicitors themselves may soon be delivering legal advice online using the technology available. For example, the use of Skype, Google Hangouts and Facetime all allow a conversation remotely whilst being able to see the other person. Using technology rather than travelling to a location can create significant savings in time and cost.

The courts already adopt technology and many routine court hearings now take place by way of telephone conference, without the parties having to travel to court.

Our webinars are an example of what valuable information can be provided online. It is important to check however, that the business or person providing the advice knows what they are talking about.

Technology can help improve access to justice. Through facilities such as Skype and social media, legal advisers can provide advice and help much more widely and cost effectively. Fixed fees and pay as you go arrangements may also enable those who would otherwise be unable to afford legal advice, to obtain it. As set out in an earlier blog post, we raised the issue of increased pressure on the legal profession and in particular more junior professionals, to provide free advice to those who would otherwise be unable to afford it. The recent changes to the funding of civil claims and on legal aid mean the profession and the government are looking to help provide affordable legal advice in other ways.

Perhaps the future is more legal advice online.

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Debt Recovery Agencies Are Toothless

Many businesses use debt recovery agencies to try to recover unpaid invoices. However, they do not have the same powers as a bailiff or High Court Sheriff.

Debt collectors don’t have any power to force a debtor to make payment. All they can use is will power and persistence. They do not have the right to enter a debtor’s home or stay on business premises without consent.

How Debt Recovery Agencies Should Behave

– In pursuing payment, debt recovery agencies should speak and write in plain English.

– They should not harass the debtor by contacting it at unconventional hours or by making threats.

– Nor should they seek to embarrass debtors in front of customers or neighbours.

– Despite what some debt collectors may say, it is not a criminal offence if a debtor fails to pay a debt.

– Unless the debtor has agreed to do so already, the debt recovery agencies have no right to ask the debtor to pay any additional charges over and above the debt amount. The cost of the debt collector will be paid by the business instructing it.

– Some debt collectors can achieve results but those debtors who know the limited power (if any) they have, make them toothless.

Complaints About Debt Recovery Agencies

If a debt recovery agency instructed by you misbehaves, action may be brought against both the agency and you. The agency’s conduct could also damage your reputation.

Regulated Credit Agreements

If the debt relates to a regulated consumer-credit or consumer-hire agreement, the debt collection agency must have a consumer credit licence. As such, the debtor can complain to the Financial Ombudsman, which has the power to make an order of compensation for distress and inconvenience. The Office of Fair Trading can also consider complaints against an agency as a whole but does not help resolve individual complaints. However, a number of complaints might result in the OFT taking away the consumer credit licence.

Other Agreements

There are many debt recovery agencies, who only recover unregulated debts and do not need a consumer credit licence. Debtors can complain to the OFT but they may not intervene in individual cases. The complaint may not only be about the debt collectors but also about you. You are responsible for the debt collector being there in the first place so have a responsibility for their conduct.

If a debt collector is genuinely harassing a debtor, the police can intervene under the Protection From Harassment Act 1997.

In Summary

Debt collection agencies have no powers to force a debtor to pay money. They may have a loud and annoying bark but their bite is toothless. To take meaningful action against a debtor who fails to pay, you need to involve the courts.

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Latest County Court Judgment Statistics Out

Latest County Court Judgment Statistics

The Registry Trust is the body that records County Court Judgments (CCJs). It is sometimes referred to as the register of County Court Judgments.

It publishes statistics fairly regularly and has just released its six month statistics for the first half of 2013. You can see the report here: Registry Trust

In brief, the statistics show:

– That the total number and value of County Court Judgments recorded, has lowered gradually over the past three years. The numbers were at their peak in 2009.

– The average value of each judgment has gone down (the average being in the region of £2,600 for consumers and £4,200 for businesses).

– That of the judgments entered, less than a quarter are recorded as having been paid (either by notice of cancellation or satisfaction).

– The bulk issue centres have taken a huge amount of the workload off the individual County Courts.

– The vast majority of claims are brought by consumers (83%), rather than businesses (17%).
 

So what to do all these figures mean and what might be the reasons?

The number of judgments being entered is reducing

This could be down to:

– Less claims being issued (the statistics don’t show those numbers),

– More claims settling before trial, possibly because of the small claims mediation service,

– More debtors entering insolvency, therefore preventing the continuation of the court claims,

The value of the claims are going down

This could be down to:

– Claimants extending less credit,

– Claimants issuing claims earlier than they might otherwise have done because money is tight,

– Claimants issuing claims for smaller sums which they might not previously have bothered with,

Less judgments are recorded as being paid

If a judgment is paid in full within 28 days, the debtor can have the CCJ cancelled. This removes all record of it from the debtor’s credit history. If paid after 28 days, it can have the judgment marked “satisfied”. The record of the CCJ stays but is shown as having been paid.

The low number of cancelled and settled CCJs could be down to:

– Debtors simply don’t have the money to pay so judgments are going unpaid,

– Many debtors will not knowing they can apply to court to update the record (or just not bothering), despite having paid the judgment amount,

– Debtors are entering insolvency, so preventing enforcement of the judgments,

Less judgments are being entered in local County Courts

The number of judgments entered by the individual County Courts has reduced from 150,529 to 68,220 since 2009. This could be down to:

– The use of the court system of bulk centres meaning the individual County Courts have less work to process.

– The County Courts are mostly used by consumers / individuals rather than businesses.

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