A lawyer’s duty: Share-holders vs Client – is the line too fine?
Posted on 3rd March 2016
Historically, a lawyer has always had two primary duties. Their first is a duty to the court and the second is the duty owed to their client. These duties have remained constant over time. I would question now, with our ever-changing legal landscape, whether the changes are bringing about a shifting of loyalties from client to share-holder?
In this post Jackson and post LASPO era profitability in certain legal sectors, personal injury in particular has been squeezed to within an inch of its life. This has sadly seen the demise of a number of well-regarded firms and in their place have cropped up a number of ABS’ and incorporated firms. These structures unlike traditional firms have access to investment and lending that has allowed growth in an uncertain UK legal market on quite an unprecedented scale. With a wealth of resources at their disposal they are quicker, slicker and invincible…or are they?
The increase of the small claims limit and the impending fixed fees in medical negligence have changed the dynamic once again and, once again, the future looks uncertain. So what happens when companies like this for example are hit by sudden changes in legislation and the rose tinted spectacles come off?
Whose interests will be the number one priority in these troubling times? One would hope that the duty to the client will prevail over that of the shareholder, however for banks and shareholders whose primary goal is profitability whether in dividends or growth in share value will that be the case? Are we naïve in thinking that shareholder interests have no influence on how lawyers may ultimately represent their clients?
To a client who has sustained an injury that has no doubt been life changing in one way or another their case will be of paramount importance to them and they would want assurance that the lawyer representing them will do their best to ensure the case is settled at the right time and for the right amount. Can a lawyer balance the needs of their client against the pressure of knowing they may need to settle as many cases as possible to soothe the concern of the shareholders?
Over the past three years we have witnessed firms going into liquidation and the SRA having to step in. The protocol is that that they arrange for the cases to be redistributed to other firms. When the volume of cases is high this can become a fairly lengthy process – what happens to the client in all this? The uncertainty as to who will deal with their case will no doubt be very distressing and it is possible that inevitable delay could be damaging to their claim.
My warning to clients
We know a personal injury caused by someone else’s negligence is usually a once in a lifetime situation. If you are in that situation, it is very important that you keep control of your case and your own best interests. You can decide who represents you and you can change solicitor at any time.