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NEWS & CAMPAIGNS - CARTER REVIEW Update on Law Society's action - judicial review proceedings issued There has been a major new development in relation to the Law Society's action against the LSC in relation to the Unified Civil Contract and in particular, its claim of a unilateral right to amend the Contract. The Law Society has announced in the last few days that it is about to issue further judicial review proceedings to oblige the LSC to comply with the Court of Appeal judgment handed down last November. For the benefit of those who may like a little more information, I have set out below a summary of the issues which may help put this in some context. We will obviously keep you updated as developments unfold. Summary Last November, the Court of Appeal handed down a judgment upholding a claim brought by the Law Society. It held that the LSC's reserved power to insert new technical specifications into the Unified Contract and to amend any existing specifications without any restriction was in breach of procurement rules as it did not allow a potential service provider to determine in advance the performance and functional requirements it may in fact be obliged to comply with during the contract period. What this meant in practice was that the LSC could no longer exercise the power which it had reserved to unilaterally amend the unified contract as it had previously anticipated. Counsel instructed by the Law Society subsequently advised that the appeal result meant that the LSC could not seek to take advantage of, or to continue to rely on, rights under the Unified Contract that had been found to be incompatible with the EC transparency regulations governing public contract procurement. In short, it advised that the changes to the Contract introduced in October 2007 should be treated as being of no effect. The Law Society therefore wrote to the LSC to demand that it rescind the October 2007 amendments, including the civil and family fixed and graduated fee schemes so as to nullify the effect of the alleged unlawful action. The LSC's response before Christmas indicated that it accepted that it could no longer rely on clause 13.1 in the Unified Contract. However, it did not accept that the judgment obliged the LSC to bring the Unified Contract to an end only that a formal amendment (to clause 13.1) would need to be considered. The LSC appeared to indicate that it accepted that the introduction of the civil specification may not have been justified under clause 13.1. However, it alleged that the October 2007 changes and, in particular, the introduction of the payment annex was a necessary response to the Community Legal Service (Funding) Order 2007 which came into force on 1st October 2007. Such amendments were, it alleged, permissible under clause 13.2 of the Contract. Clause 13.2 permits amendments to take account of legislative changes and was not governed by the judgment. The Law Society did not, unsurprisingly, agree with this. The Society's position appears to be that the Funding Order cannot be relied on to make changes to the Unified Contract as the Contract had already been entered into before the Order came into effect. The Society also argue that there is no evidence to suggest that the October amendments were made under clause 13.2 in order to comply with the Funding Order and even if they were made under clause 13.2, there is a requirement (in clause 13.3) for a consultation on any amendments effected under clause 13.2 which was not carried out. There had subsequently been a number of letters exchanged and meetings held between the parties without an agreement being reached. On the last working day before Christmas, the LSC announced that as a result of the uncertainty and because of the risk of further litigation, it intended to terminate the Unified Contract and ask each provider to submit a new bid for a revised Unified Contract. The fixed fee schemes that were introduced on 1 October would, it said, continue to apply. Further litigation Unfortunately, it would appear that there will be another period of uncertainty as the Law Society will now be issuing further proceedings against the LSC. The Society is seeking a declaration that the amendments purportedly made by the LSC were ineffective and a breach of European law and a declaration that the LSC's failure to nullify the consequences of its breach of European law is itself a breach of European law. It will also seek guidance on how the LSC must remedy those breaches. Three law firms (Fisher Meredith LLP, Kaim Todner LLP and Farrell Matthews & Weir) are also bringing test cases against the LSC, supported by the Law Society, claiming financial loss due to the LSC's contract amendments. A copy of the Law Society's letters of claim are available on their website at: http://www.lawsociety.org.uk/newsandevents/ The LSC's response to this action has not been made known.
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