Commission and payment by barristers for work

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This guidance is issued following recent communications from the Professional Standards Committee concerning schemes under the aegis of the Claims Direct Personal Injury programme. The Committee's view was that these schemes appeared to involve members of the Bar paying outside consultants in order to obtain work and could not fairly be construed as arrangements under which barristers pay for preparation and administrative work which is necessary to enable them to give good professional advice. The Professional Standards Committee established a Working Group to consider the issues raised by such schemes and generally.

We understand that the original scheme which gave rise to our concerns is no longer applicable. So far, no similar schemes have been proposed and we therefore do not think it necessary or appropriate to look at the issue in respect of hypothetical cases. If further schemes are suggested we will look at those and see whether this advice needs amendment.

We think, however, that it would be helpful to the Bar to state what the rules currently are and how we believe they affect particular sets of circumstances that have arisen. In particular, we bear in mind the following principles:

barristers should be instructed for their expertise and suitability for the task, not because they have paid either the client or any third party to receive instructions;
fee notes should be transparent and not have the effect of misleading a court or any party as to what they contain.

The Rules

We draw the Bar's attention particularly to the following passage of the Code of Conduct:

Paragraph 307

A barrister must not:

(a) permit his absolute independence integrity and freedom from external pressures to be compromised;

(b) do anything (for example accept a present) in such circumstances as may lead to any inference that his independence may be compromised;

(c) compromise his professional standards in order to please his client the Court or a third party.

(d) give a commission or present or lend any money for any professional purpose to or (save as a remuneration in accordance with the provisions of this Code) accept any money by way of loan or otherwise from any client or any person entitled to instruct him as an intermediary;

(e) make any payment (other than a payment for advertising or publicity permitted by this Code or in the case of a barrister in independent practice remuneration paid to any clerk or other employee or staff of his chambers) to any person for the purpose of procuring professional instructions;..."

Sub-paragraphs (d) and (e) are of particular relevance to this issue. In addition, attention should also be drawn to paragraphs 205 (prohibition on supplying services to the public through or on behalf of anyone other than solicitors, the LSC or a Law Centre) and 401(c) (which prohibits entry into a contract for the supply of legal services with any person other than a professional client.

We now give advice on the following issues.

Payments for Work

In our view:

schemes which require barristers to pay for services provided outside chambers in order to accept work are likely to contravene paragraph 307(e) and to involve a hidden commission contrary to 307(d);
307(e) in our view precludes payments to clerks of other chambers in return for forwarding work; and
an "introduction" fee of a set amount per case or a percentage-based "administration charge" or "advertising fee" where the amount is linked to the work actually received is also likely to breach paragraph 307.

Agreements with Lay Clients Providing "Bulk" Work

We are aware that a number of protocols exist with lay clients who instruct the Bar regularly (particularly insurers) whereby barristers agree to undertake work at particular rates or to discount fees if payment is made promptly. In principle, the Bar Council has no objection to such arrangements but care needs to be taken to ensure that:

the agreement does not amount to a contract with the lay client (and if it is in writing this should be clear) - otherwise it would breach paragraph 401;
where the agreement includes a reduction for early settlement of fees, this should be made clear on the fee note.
307(a) and (b) in our view have the effect of prohibiting barristers from agreeing to schemes whereby different fees are routinely paid according to the nature of the advice given (eg: a lower fee for negative advice).

Responsibility for Members of Chambers

Barristers are reminded that they are responsible for the conduct of their staff and should ensure that members of their staff are not paying commission on their own account in respect of work received by Chambers.

Other Guidance Concerning the Claims Direct Scheme

We have received a number of additional queries arising out of the particular arrangements proposed under the scheme from Brown Associates and the Bar Council's advice. It should be made clear that:

barristers retain responsibility for the contents of their fee notes and should not:
(i) permit blank fee notes to be sent out to be completed by third parties;
(ii) be party to arrangements where fee notes are altered by third parties.
fee notes should record the fee that the barrister is actually being paid for professional services. There is obviously no need to refer to ordinary professional expenses, such as clerks' fees, chambers rent and administration, travel costs and the like. A special payment to be made to a third party for preparation or administrative work of the kind that would normally be undertaken by instructing solicitors would, however, be regarded as an extraordinary expense. Such payments should be recorded on the fee note so that the document is transparent and so could be challenged by the party ultimately responsible for paying the fee.
there are doubts about whether the instructions that counsel received under this scheme and the timescales in which the work was required to be done were necessarily sufficient. Barristers must take care to ensure that they are satisfied that the advice they give is competent and sufficiently full, and even where counsel is invited to use a standard form, that they have seen and had time to consider all the relevant documents in a case before completing any work.
there is nothing inherently wrong in undertaking work which has been generated by Claims Direct or any similar organisation but, in doing so, barristers must ensure that any arrangements pursuant to which the work is done by them comply with the Code. If the terms do not comply then the barrister should seek to re-negotiate the terms with the instructing solicitor (who, of course, remains liable for the fee). If that is unsuccessful then the barrister is professionally embarrassed under paragraph 603(c) of the Code.

Generally

If barristers are uncertain about whether particular schemes fall within the Code, they are urged to seek advice in writing from the Professional Standards Department of the Bar Council. It is essential that when writing barristers should provide comprehensive information about the schemes including any relevant materials which the barristers have concerning the schemes. That Department will attempt to provide advice as quickly as possible, but it may well be that advice may need to be sought from the relevant Committees and this may take some weeks. If Chambers are negotiating such schemes, they should raise them with the Bar Council as early as possible. This can be done on a confidential basis.

In particular, Chambers should not rely on statements from others that approval has been gained or is being sought for particular schemes. The PCC is unlikely to look favourably on requests for waivers to enable Chambers to complete work on terms which are in breach of the Code and which were entered into without having consulted the Bar Council and may, indeed, take disciplinary action against Chambers which do so.