In a hugely embarrassing defeat, the Law Society has been found guilty of abusing its dominant position in the legal training market by compelling more than 3,000 law firms to buy its own training courses.

The Law Society established the Conveyancing Quality Scheme in 2010 in the wake of the financial crisis. Over the following years more and more mortgage lenders required firms to be CQS accredited if they wanted to be considered for appointment to the lenders' panels. The Law Society appointed itself as the sole vendor of CQS-accredited training courses, and by 2015 the majority of firms which dealt with conveyancing were customers. But in 2016 a company which also offered training courses, Socrates, sued. It argued that by hogging CQS accreditation, which had become effectively compulsory for conveyancing firms, the Law Society was dominant in the market and abusing its position. At the time a Law Society spokeswoman told RollOnFriday the case was "wholly without merit”.

  Socrates' website hints at the result 

But the Law Society's performance at the Competition Appeals Tribunal revealed that its PR team was just projecting. During the trial, its claim that other courses would be too hard or costly to monitor was ruled "scant and unpersuasive". Its suggestion that clients deserted Socrates because they weren't happy with the service was dismissed as an attempt to "belittle the evidence". And in a failure the court called "striking", the Law Society, represented by Norton Rose Fulbright, was unable to find a single witness to testify that it was not dominant.

The Law Society also claimed that its training was loss-making, but in a toe-curling admission on the final day of the hearing its counsel admitted that the Law Society's estimates of its CQS revenue had been up to 100% too low. She said that her client may have been raking in as much as £1.5m a year, but could not give an accurate figure because Law Society staff had used the wrong codes to record income. She revealed that there was "about £500,000 of unallocated training income" sloshing around its bank account. In its ruling, the CAT judges called the Law Society's attitude towards the court's orders for accurate figures "wholly unsatisfactory".  The panel of judges called the Law Society's failure to disclose other key documents until after the trial had finished “deeply unimpressive”. 

Socrates director Bernard George said, “It was obvious what the Law Society was doing was not just illegal, but also desperately unfair to us and to law firms". He said, "it has been a long and gruelling battle but we felt we had no choice despite having to take on a powerful opponent, represented by a QC and one of the biggest law firms in the world". 

Law Society president Robert Bourns said, "For the vast bulk of the time CQS training has been available it has been compliant with competition rules. I am certain that in setting CQS up, the Law Society acted in good faith and in the public interest". He said, "CQS has never been about profit".
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Comments

Anonymous 02 June 17 12:55

The coverage of this important story by the Law Society Gazette has been shameful.

And it really is worth repeating what the president of the Tribunal had to say of the way in which the Law Society conducted its case and the way in which its evidence would have mislead the Tribunal had the evidence not been challenged by Socrates:

THE PRESIDENT: I have to say, from any responsible company I would regard this as a pretty shoddy product and I would expect The Law Society, the body that represents the solicitors of England and Wales, to operate in what it produces for the Court to a high standard.

MS. SMITH: I can only apologise for that, but I think the main source of the problem was the very diffuse way in which this product is managed across the organisation.

THE PRESIDENT: I understand that, but it could have been explained, as you have very clearly explained it, so one could understand what has been done. I am not saying that they necessarily should have had better record keeping, but they should not have presented what they have in a misleading way.

Anonymous 02 June 17 14:02

Excellent news - especially for anyone who has used Socrates and is a fan of Bernard George's witty, engaging webinars. He and his co-directors risked a hell of a lot - shameful that the Law Society should have behaved in this way.

Roll On Friday 02 June 17 15:08

Shame on the Law Society for their blatant abuse of their position, they are meant to be representing us not making money from us!! Well done Socrates for taking them on!

Anonymous 02 June 17 22:35

The Law Society is so lacking in humility that, even having broken the law, rather than apologise they make glib and pathetic statements about how they didn't break the law for long! Hey Law Sociey, for the record, that's my membership money you've wasted trying to defend a case you said was "without merit". Not to mention that it was law firms you were harming with this behaviour in the first place! As for the CQS not being about profit - do me a favour. Every solicitor I know saw this for exactly what it was - a way to rip off member. Now someone do the right thing: apologise publically ans resign. Assuming there's anyone there with an once of integrity.

Anonymous 03 June 17 07:54

The Law Soc has set a truly appalling example for its members. Old school bully-boy litigation tactics focusing like a laser-beam on the advantage given it through inequality of arms. The running of truly untenable arguments in the hope that it might exhaust its opponent. Really? This kind of loutish behaviour you might expect from Sports Direct but our own trade body? Get a grip Chancery Lane! Your job is to burnish the name of lawyer-kind not throw buckets of dung on it!

Anonymous 03 June 17 14:50

If the President of the Tribunal considered that the Law Society had presented evidence that, had it not been challenged, would have mislead the court, should the Law Society report itself to the SRA? The evidence may not have been deliberately misleading, but the enormous disparity in the figures produced by the Law Society certainly raises concerns. Who put these figures forward to be used in the Tribunal?

Anonymous 06 June 17 18:50

"up to 100% too low"? You mean "up to zero"? Come on Matthew, dust off those O-level maths books and swot it up.

Anonymous 06 June 17 18:53

The only stuff I ever get from the Law Society is advertising for insurance and dodgy courses. LawSoc is supposed to be an industry representative body - maybe they should think about representing the profession's interests instead of being a cash cow for its employees and officers.

Anonymous 06 June 17 23:53

For Christ's sake can the Law Society PLEASE stop embarrassing our industry. Pretending CQS was in the public interest?!!!! Somebody just say sorry and RESIGN!!!!!! Have you no shame?