Law Society sued by training supplier over anti-competitive CQS rule

Mr. Justice Roth identifies accuser’s attorneys’ costs as ‘disproportionate’ at most current case management conference

hqdefaultThe Law Society is being taken legal action against by a legal training carrier for needing conveyance companies to complete its anti-money laundering training to maintain Conveyance Quality Scheme (CQS) accreditation.
Socrates Training Limited, which provides law firms anti-money laundering (AML) training, to name a few compliance courses, has brought a claim in the Competition Appeal Tribunal (CAT) under section 47A of the Competition Act 1998 for alleged anti-competitive behavior.


Socrates asserts that ‘at some time, thought to be early in 2015’ the Law Society mandated that over 3,000 CQS-subscribed firms ‘purchase both AML online training and [mortgage] fraud training’, for that reason abusing its dominant market position and reducing the competitors for training carriers. The Law Society thinks the claim to be ‘wholly without benefit’.


Bernard George, a solicitor and Socrates director, stated that he ‘fully anticipated’ Socrates to win the case but cautioned of the threats for the profession if not.
It will suggest the Law Society can award itself training monopolies for any firm or any lawyer that has a Law Society accreditation. That is lots of countless firms and tens of countless lawyers, all needing to buy whatever training the Law Society wants to sell them. That could devastate the competitive training market.’


He included that the Law Society ought to run schemes like the CQS ‘to make sure recognized attorneys are skilled, not to sell training’.
‘Firms are caught, as the CQS is essentially a “must-have” if you are going to do residential conveyance. Without it many mortgage loan providers will not let you handle their transactions. There is absolutely no requirement for the Law Society to be a monopoly training carrier, except that it is a great earner.’


‘Disproportionate’ expenses

The case is the first to be designated to the brand-new CAT ‘fast track’ and will come to trial at the start of November. The complainant is seeking damages, interest, a declaration that the tying provision is illegal and unenforceable, and an injunction limiting the defendant from continuing to abuse its dominant position.

housing-fraud-343x220At the second case management conference previously this week, the Competition Employment Tribunal heard that Norton Rose Fulbright, representing the Law Society, proposed costs of 640,000 for the ‘four-day trial’. Mr. Justice Peter Roth labeled the figure as ‘disproportionate’ and set the maximum cap on the Law Society’s recoverable costs from Socrates at 350,000.


Norton Rose likewise asserted that it had run up costs of 171,000 plus VAT in the first 7 weeks of representing the Law Society from 25 April to 10 June, as an outcome of over 450 hours of work. Roth J described the time spent as ‘remarkable’.


The claimants, represented by Philip Woolfe of Monckton Chambers, made an application for disclosure from the Law Society of CQS membership numbers and AML training revenues since 2014 in a bid to compute the appreciable effect on the market.



In response, Kassie Smith QC, likewise of Monckton Chambers, who was instructed by Norton Rose Fulbright, provided to supply the number of CQS accredited firms, the date of accreditation and the variety of appropriate charge earners at the date of application in addition to the total revenue for CQS training post 2013. This was accepted by the Claimants and approved by Roth J.



Voluntary accreditation schemes

business crime concept with handcuffs and dollarThe case has cast doubt on the legitimacy of voluntary accreditation plans. Crispin Passmore, executive director of policy at the Solicitors Regulation Authority (SRA), thinks there must be convincing evidence that the advantages of such schemes exceed the costs.


‘To improve public defense, the accreditation should be robust and individually quality ensured. Evaluating the effect on quality and any barriers to accessing services need to belong to that factor to consider. And to be credible, some solicitors should cannot fulfill the requirement.

‘There is little proof that the general public use accreditation schemes to help them select their lawyer. Could access to grievances data or client feedback do more to assist the public select? Where people get info from also matters the general public need to have the ability to choose the source that matches them. That may include independent, reliable sources with no interest in promoting services, or contrast websites that enable public remark.



‘Voluntary accreditation plans are generally marketing opportunities for attorneys and profit centers for those that offer them. Prior to investing money on them, law firms might wish to see evidence that the benefits really do surpass the expenses for them and their consumers.

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