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Filthy lucre: lawyers’ fees and lawyers’ ethics – what is wrong with informed consent?

Published online by Cambridge University Press:  02 January 2018

Richard Moorhead
Richard Moorhead*
Affiliation:
Cardiff Law School, Cardiff University
*
*Email: [email protected]
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Abstract

This paper concentrates on the ethical tension created by lawyer billing. In particular, it examines the tension between a lawyer's commercial imperative to make a profit and their ethical obligation to promote their clients interest over their own. Conventionally, this conflict is resolved through the lawyer providing disinterested advice on (their own) costs and the client granting informed consent to billing arrangements on that basis. This paper uses empirical data to suggest that notions of disinterested advice and informed consent are deeply flawed when it comes to lawyers' fees. Clients passively consume exploitative practices. As a result, this paper argues that, where possible, regulators should supplant informed consent with an approach requiring simple charging: reducing professional discretion over charging practices and strengthening the market-based regulation of price. This requires a significant simplification of lawyers' fees wherever possible.

Type
Research Article
Information
Legal Studies , Volume 31 , Issue 3 , September 2011 , pp. 345 - 371
Copyright
Copyright © Society of Legal Scholars 2011

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References

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35. The Brickman Kritzer debate is contained in the references at n 5.

36. Parker and Evans cited n 16.

37. Webb cited n 20 p 63.

38. May cited n 31.

39. Ibid 125.

40. Ibid 128.

41. Ibid 131.

42. Ibid 137.

43. Parker and Evans cited n 16 Hurst and Moorhead cited n 7 Webb cited 20.

44. Until recently it was possible to seek a remuneration certificate for non-contentious work.

45. SRA Code Guidance para 31.

46. The regulations are cited at n 8.

47. For a full discussion of methods and results, see R Moorhead and R Cumming cited n 10.

48. Given the questions that were asked of claimants there was the potential for claimants interviewed for the SETA data to misidentify the type of funding their lawyer was operating under. See Hammersley, et al The Influence of Legal Representation at Employment Tribunals on Case Outcome (London: BERR, 2007)Google Scholar , at 11 onwards. The difficulty was dealt with by using two definitions of contingency fee in this study. The broader definition treats all claimants who said they had to pay their adviser ‘if they won the case’ as being under contingency fees. The narrower definition treats only those who said they had to pay ‘if they won the case’ and that they paid only if they won. Because it is possible for someone to pay some costs win or lose under contingency fees, it is possible that either definition is more accurate; hence the need to look at both.

49. For a fuller discussion of methods and results, see R Moorhead and R Cumming, cited n 10.

50. They also interviewed defendants but defendants did not fall within the remit of our study.

51. All potential interviewees were sent a letter and information sheet setting out the research aims and inviting them to participate, making clear that participation was voluntary and that they could withdraw from an interview at any time. Contact was made at various times of the day to ensure maximum and unbiased coverage of the sample provided by BMRB. Consent to participation was confirmed on the telephone before any interview commenced. All data was anonymised and securely stored.

52. Once we had interviewed 17 private payment and DBA clients we simply stopped contacting individuals on each of those lists. The position was slightly different for the LEI/TU list. We could not tell without ringing which of the two funding arrangements the individual had used. In seeking (unsuccessfully) to reach our target for LEI interviews we contacted some trade union clients and were forced to decline interview once a funding arrangement was established.

53. Eighteen individuals declined to be interviewed, primarily because, despite agreeing to be recontacted at the time of the SETA survey, they did not want to take part in another survey. 25 individuals were ‘failed contacts’. This generally meant that the individual was contacted at least six times but we failed to get an answer, though in some cases this meant that the contactee had not used a relevant funding arrangement.

54. This is an analysis package which facilitates the coding and analysis of qualitative data.

55. A paired sample t-test was conducted (p =.708). Because a Q-Q plot suggested the distributions of these variables may not be normal a Sign test was also conducted which also did not reveal significant differences (p =.626).

56. Kritzer cited n 26.

57. Zamir and Ritov, n 27.

58. Ibid.

59. Ibid.

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61. Webb n 20, p 42.

62. Of the remaining two private payment respondents, one had been charged a fixed fee of £1500 and the other could only recall his adviser giving him estimates.

63. In line with Rule 2.03(1) of the Solicitors Code of Conduct, which requires solicitors to give clients ‘the best information possible about the likely overall cost of a matter both at the outset and, when appropriate, as the matter progresses’.

64. Some practitioners commented that using hourly rates led to improved client relations because clients preferred the certainty, transparency and/or simplicity of hourly rate fee structures: see Moorhead and Cumming (2008) cited n 10 para 80. Conversely, other practitioners thought that contingency fees out-performed private fees in this regard: ibid, para 199.

65. As with recoupment, our respondents tended to indicate the relative rarity of disbursements in employment tribunal cases.

66. Solicitors Code of Conduct 2007, rule 2.03(d)(ii), available at http://www.sra.org.uk/solicitors/code-of-conduct/195.article.

67. Unless ‘someone else’ is read to include the claimant's solicitor.

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70. See also the Vanilla Reserarch Referral Arrangements Research (London: Legal Services Consumer Panel, 2010). Available at http://www.legalservicesconsumerpanel.org.uk/publications/research_and_reports/documents/VanillaResearch_ConsumerResearch_ReferralArrangements.pdf (last downloaded 20 June 2010).

71. Moorhead and Cumming (2010) Chapter 9 and (2009) pp 111–116, cited n 10.

72. Ministry of Justice Regulating Damages Based Agreements, Consultation Paper CP 10/09 (2009) and Ministry of Justice Regulating Damages Based Agreements Response to consultation, CP(R) 10/09 (2009).

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78. See references at n 9.

79. An interesting discussion, beyond the scope of this piece, is whether the arguments here should be confined to lawyers dealing with lay clients. Space inhibits a discussion of commercially sophisticated clients here, although the the professional press frequently discusses trends towards more fixed-price billing. The idea that General Counsels successfully control lawyer costs can be contested.

80. WG Ross cited n 34 and GM Giesel cited n 34. Lerman, Lg ‘Lying to clients’ (1990) 138 University of Pennsylvania Law Review 659 CrossRefGoogle Scholar.

81. In seeking to broaden the ideas beyond employment tribunals there is a great deal of complexity to be worked through. In litigation, there are many controls on costs associated (in the main) with costs shifting rules (predictable costs, case management, etc.). Disbursement costs are different in different types of litigation. These can be more significant burdens on firms, but equally firms do often bear these costs.