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Law Society settles ‘mortifying’ market abuse case with training provider

In a move that should draw a line under a controversial competition dispute, the Law Society has settled with online training provider Socrates after it was found to have abused its dominant market position by the Competition Appeal Tribunal (CAT) over training tied to its conveyancing accreditation scheme.

Socrates had issued the claim last year, alleging that the Law Society’s requirement for law firms to buy anti-money laundering (AML) and mortgage fraud training from it as a condition to maintain their Conveyancing Quality Scheme Accreditation (CQS) was anticompetitive.

The CAT ruled in favour of Socrates in May, and hit the Law Society with a costs order of up to £230,000.

However the Law Society has now settled the claim on confidential terms, and the representative body confirmed that the ‘costs of the case and any damages’ were covered by professional indemnity insurance.

In a statement, a spokesperson for the Law Society robustly defended its position: ‘The Law Society’s Conveyancing Quality Scheme (CQS) provides a quality standard for solicitors delivering residential conveyancing services and a “trusted community” of conveyancers to the benefit of the public, lenders and insurance companies.

‘Nowhere in the judgment does the tribunal make any finding or contention that the Law Society deliberately sought to profiteer from the sale of CQS training.

‘The Society also considered that it had a sound legal defence to the claim under competition law and its decision to defend the case was ultimately vindicated by the tribunal finding in its favour in respect of the majority of the time period in dispute.’

Commenting on the settlement Bernard George, director of Socrates, said: ‘I find it astonishing that the Law Society is refusing to tell its members what the compensation is, completely leaving them in the dark.’

As a result of the CAT’s judgment, the Law Society confirmed it would be restructuring the training aspect of the CQS and stated: ‘Further details will be announced shortly.’

The Law Society’s conduct has been met with condemnation from within the legal community, as Taylor Wessing’s competition head Robert Vidal noted at the time of the judgment: ‘It’s mortifying that the body representing the legal profession in England and Wales has been found to have broken competition law for commercial advantage.’

Despite the controversy, Hogan Lovells’ competition head Nicholas Heaton noted the wider implications of the case: ‘It’s the first case on the CAT’s fast-track scheme to get to trial. It’s one of a number of fast-track cases that have been introduced since October 2015.

‘The scheme has given smaller businesses access to the court, in the way which was intended. It seems to be producing the results that the people who invented the scheme wanted.’

Read more about the Law Society’s work in the feature: ‘Taxation without representation’