1. Watchdog savaged
Last year was an ‘annus horribilis’ for the Solicitors Regulation Authority. Practitioners remain furious about digging deep, via the compensation fund, to fill the £60m-plus financial black hole created when Axiom Ince collapsed. The Legal Services Board began enforcement action against the unrepentant regulator after a devastating report highlighted SRA failures before the debacle. Chief executive Paul Philip and chair Anna Bradley rebuffed calls for one or both to take the fall, but they are braced for more turbulence. Another LSB-commissioned report is pending on the SRA’s actions ahead of the equally spectacular demise of Sheffield claims firm SSB Law (see also box, p18).
2. In the post
For the media, the Post Office Inquiry is the gift that keeps on giving. For the legal profession – both in-house and in practice – it has proved to be reputational kryptonite. In addition to the ramifications for professional ethics, which will start to become clearer in 2025, the SRA has more than 20 live investigations into solicitors and law firms working on behalf of the Post Office/Royal Mail Group. The Metropolitan Police, meanwhile, has revealed that its criminal inquiry encompasses solicitors and barristers. The fallout from the Horizon scandal has only just begun to descend. Retired High Court judge Sir Wyn Williams’ final report is certain to make grim reading.
3. Only way is ethics
The SRA will hold its next flagship conference for in-house solicitors in March. Legal professional privilege, balancing ethical obligations and managing legal risk will feature, after the regulator published materials in November to help the 34,500-plus in-house solicitors in England and Wales decide how best to respond to potential criminal or unethical activity. One assumes the event will be well attended. It ought to be.
4. Counselling the council
Another employed sector to watch is local government. Finances are in a parlous state, compounded by commercial ventures that misfired, especially around property. Solicitors must ensure desperate colleagues adhere to the council’s legal commitments. Beleaguered enterprises will reveal more wrongdoing and further governance problems are sure to emerge among officers and councillors. De facto bankruptcy looms for many authorities. For local government lawyers, the coming year may be challenging, but it will not be dull.
5. Language problem
The House of Lords public services committee will publish its report on interpreting and translation services in the courts following an extensive inquiry last autumn. Peers were so alarmed by what they heard during oral evidence sessions that the committee took the unusual step of asking the lord chancellor to halt a procurement process for new language services contracts. That request has been rejected. Pausing the current retender would not be justified or help deliver further improvements, justice minister Sarah Sackman KC told the inquiry just before Christmas.
6. Happy to sit on the bench?
A global support group for judges will launch this year, creating a ‘safe space’ for judges to raise concerns and look out for each other. Her Honour Judge Kalyani Kaul KC (pictured, right), founder of the Judicial Support Network, an independent support organisation for judges in England and Wales, is acting chair. A steering committee comprising judges across the globe has been compiling a list of psychiatrists, psychologists, psychotherapists and counsellors to whom judges can speak. ‘Triage judges’ will be bound by confidentiality undertakings.
7. Access all areas
The Ministry of Justice will begin work this month on a minimum, 10% uplift in civil legal aid rates for lawyers working in the housing (housing and debt) and immigration (immigration and asylum) sectors. The proposed uplift – the first increase in 30 years – will be implemented in 2025/26. However, lawyers working in nine other contract areas of law, such as mental health, education, community care and discrimination, will have to wait until this spring to see if their fees will increase. The MoJ will make a decision following the chancellor’s spending review. Rachel Reeves’ demand for 5% ‘efficiency savings’ across all government departments is not encouraging.
8. You can have the Ed Sheeran albums
After receiving a scoping paper from the Law Commission that confirmed the law governing finances on divorce should be reformed (the current law ‘lacks certainty and accessibility’ to the extent it is potentially ‘inconsistent with the rule of law’), the government will decide which of the four models explored by the commission it wants to pursue. One option is a new matrimonial property regime that enables couples to know, when marrying, how property will be divided should the marriage fail.
9. Bringing the house down
2025 will hopefully be a calmer year for the conveyancing sector following last year’s drama surrounding the Law Society’s TA6 property information form. Dissident conveyancers lost a vote of no confidence in the Society over the issue. However, the controversy did prompt Chancery Lane to postpone compulsory use of the form’s latest iteration and embark on a comprehensive consultation exercise. The Society is still sifting through the evidence and will provide a further update in the coming weeks. In the meantime, conveyancers can continue to use the fourth or fifth edition of TA6.
10. Counting the hours
The death of the billable hour has been grossly exaggerated. But with employee wellbeing rising up the managerial agenda, could 2025 be the year when at least some elite firms review their targets? To compete on sky-high salaries, many have increased time they can bill. This is surely not sustainable in wellbeing terms, and clients are restive on fees. With legal tech changing how things are done, there is an opportunity for one elite firm to unsettle the rest by abandoning billable hours targets for other metrics – still with an eye on the bottom line, naturally. The Gazette’s prediction? Don’t hold your breath.
11. Oil and troubled waters
Climate activists are likely to ramp up direct action against City legal giants which advise fossil fuel companies. A&O Shearman recently had oil sprayed on to its London HQ by Extinction Rebellion (pictured, right). As Gazette columnist Jonathan Goldsmith says: ‘Cue outrage from many people that lawyers are being identified with their clients, that there is pressure for certain entities – in this case fossil fuel exploiters – to be denied legal representation’. The City appears unfazed. Yet, as Goldsmith points out, ‘this is a hot debate, which will only grow hotter… in Europe at least there is not an absolute right to legal advice in civil matters’.
12. Young, gifted and flush
Who will be the first newly qualified solicitor to earn £200,000 a year? It shouldn’t be long. Last year saw no let-up in the NQ pay war, with US firms in London leading the charge and the magic circle playing catch-up with each other. Litigation behemoth Quinn Emanuel heads the rankings with an eye-watering £180k. The City elite can certainly afford it, but there are associated problems (pardon the pun). As pay differentials narrow, experienced associates may feel they are undervalued and look elsewhere.
13. In the client's interest?
Law firms could be banned from earning interest on client money when the Solicitors Regulation Authority concludes a wide-ranging consumer protection review that also encompasses the compensation fund. In 2024, the SRA said it had not received any compelling evidence that retaining any interest benefits the consumer. In the longer term, firms could be barred from holding client money at all – though the SRA acknowledges that a market for third-party alternatives does not presently exist.
Getting things done quickly is why solicitors started to hold client money in the first place, but has the world moved on? Conveyancing is one area under scrutiny. Consumers do not understand why the purchase/sale money needs to go through the solicitor. Why can’t it just be transferred between the lenders direct?
Such a prohibition could be costly. In the Law Society’s 2024 benchmarking survey, profit per equity partner fell sharply among participating firms when interest earned on client money was excluded from the figures.
As for the compensation fund, the SRA has already proposed that the 50/50 split between individual solicitors and firms should be changed to 70/30. It is also mulling whether contribution levels should be determined by the size or risk profile of law firms, which most solicitors appear to favour.
Other big-ticket items on the SRA’s 2025 agenda include bulk claims litigation. We will also see movement on its proposals for greatly increased internal fining powers, amid suggestions the regulator may go back out to consultation on this deeply unpopular plan.
14. LawtechUK blowing a fuse?
After six years and £4m of government money, a programme of work to put the UK at the forefront of the ‘lawtech’ revolution is destined to come to an end in March. A proposal for a successor ‘National Institute for Legal Innovation’, floated last year by futurologist Professor Richard Susskind, appears to have sunk without a trace.
15. Online ecosystem
Ironically, the likely orphaning of the lawtech initiative comes amid widespread enthusiasm for the potential of IT to tackle some of the justice system’s myriad problems. In 2025 the master of the rolls’ new Online Procedure Rule Committee will start work in earnest on procedures for a new ecosystem of online courts. Christina Blacklaws, chair of the LawtechUK Panel, is forecasting breakthroughs by the handful of lawtech startups currently working in the badly needed but non-lucrative area of expanding access to justice. ‘My prediction is that in 2025, these wonderful people will develop powerful use cases that will begin to transform access to justice in this country,’ she says. ‘Anyone who is interested in supporting this journey, please get in touch.’
Meanwhile, Beth Fellner, director at tech network LegalGeek, suggests that private funding, particularly from international investors, will come to the rescue. ‘We expect to see increased funding levels in UK legal tech in 2025, up from the £1.38bn in 2023.’ Susskind predicts no slowing in the runaway growth of AI technologies. The one to watch in 2025? ‘Agentic AI’ – systems that are no longer self-contained but integrated in processes. ‘AI is going to be connected the way personal computers were connected by the internet,’ Susskind predicts.
16. Juries are out
Jury trials could be abandoned for some criminal cases after the government’s December announcement that Sir Brian Leveson (pictured, left) will review the future of the courts. With the backlog of cases in Crown courts at a record high, the former lord justice of appeal will consider creating new ‘intermediate courts’ where cases could be heard by a judge flanked by magistrates, in an attempt to speed up trials. Charles Kuhn, partner and financial crime specialist at Clyde & Co says: ‘The proposal to introduce “intermediate courts” is long overdue. The current system is unsustainable. Jury trials, while a historic element of the justice system, are significantly more expensive and time-consuming compared to other countries— we estimate it to be 5-17 times more expensive and take 2-3 times as long as in Germany. Adopting a hybrid model where certain cases are handled by judges and magistrates could be a realistic way to alleviate these pressures without compromising justice.’
17. Going all the way
The Supreme Court will also be busy this year. In March, it will hear criminal appeals by Tom Hayes and Carlo Palombo, the two City traders who were convicted of interest rate rigging. Another Supreme Court case to look out for, says Gazette columnist Joshua Rozenberg, concerns whether a father whose children were taken into care by Worcestershire County Council is entitled to challenge the care order by applying for habeas corpus. The court may consider whether this ancient writ needs to be constrained in some way, he notes.
18. Seeing the light
Costs lawyers will have pencilled in April as the likely implementation date for so-called ‘costs budgeting-light’, where a new Precedent Z will be introduced along with an accompanying guidance note. Two new costs budgeting pilots will also start, covering cases in the Business and Property Courts and certain cases valued at over £1m.
19. Many happy returns
The Law Society’s bicentenary will be celebrated at events across the jurisdiction. Richard Atkinson, 180th president, will meet and talk to members across England and Wales about the most pressing issues affecting their work. See tinyurl.com/yn6npzdr.
20. At a discount
The biggest change affecting personal injury lawyers, meanwhile, comes tomorrow when the PI discount rate changes to 0.5%. Consumer groups welcomed the lord chancellor’s decision to ‘err on the side of caution’ when she announced the new rate in December. However, some claimant lawyers believe the higher rate will lead to more severely injured people being undercompensated.
21. Different class
‘The English courts – the Competition Appeal Tribunal in particular – are currently packed with class action claims,’ notes Leigh Callaway, partner and dispute resolution lawyer at Fladgate. ‘The introduction of opt-out collective actions undoubtedly set the stage but is not the sole driver for the recent surge in such claims. More generally, the determining factor is likely to be a perceived unfairness among consumer and consumer rights activists about the way large corporates operate and the seeming failure of governments to hold them to account. Those drivers are unlikely to go away in the short- to medium-term, with the only “brake” likely to be the availability of third-party funding and the capacity of the court.’
22. Court watching
Callaway was, however, speaking before December’s judgment in the first trial in the UK of an opt-out collective action. The Competition Appeal Tribunal returned a verdict for the defendant, in a decision which some believe may dampen investors’ enthusiasm for the fast-growing sector.
Also rumbling along in the background is the largest claim ever issued in the English courts: Municipio de Mariana & Ors v BHP Group (UK) Limited & Anor, which concerns the collapse of the Fundão dam in Brazil. With some 600,000 claimants seeking up to £36bn, it is being closely watched by ESG practitioners. ‘Success for the claimants will further emphasise the importance group claims have to holding large multinational corporates to account for ESG and ESG-adjacent failures,’ says Callaway.
23. Cover story
By April the Treasury must report on savings achieved as a result of the whiplash reforms in the Civil Liability Act 2018 and, most importantly, what those savings have meant for motor premiums. The powerful insurance lobby argued that the reforms would cut the cost of car insurance – a claim which many, including the Gazette, have long regarded with extreme scepticism.
24. M&A mania
Last year saw a wave of bolt-ons, consolidations and private equity-backed transactions reshaping the law firm landscape. Over 150 deals were done, a marked increase on 2023. According to M&A specialist Jeff Zindani of Acquira Professional Services, the scale and pace of consolidation are set to accelerate this year, with more buyers than sellers driving competition for attractive targets. For those seeking a competitive edge, a merger or acquisition is becoming less of a gamble and more of a strategic necessity, Zindani believes.
Private equity has targeted mid-tier and profitable boutique firms, seeking scalable, high-margin law firms. But can PE successfully exit the legal sector? ‘Succession gaps, cultural clashes, and a limited buyer pool remain barriers,’ says Zindani. ‘Client loyalty often hinges on key partners, while SRA rules and traditional partnership structures impose further constraints.’
25. Third way
Litigation funding is at a crossroads after years of breakneck growth. The previous government’s attempt to reverse PACCAR via the Litigation Funding Agreements (Enforceability) Bill fell with the general election. Labour has been sitting on its hands as the industry awaits the outcome of a Civil Justice Council consultation. Statutory regulation, whether the parties should have to disclose the presence of funding, and the oft-raised question of whether funders’ fees should be capped are all in play. (See also Costs & Funding, p10)
Happy New(ish) Year.
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