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The Law Society found to be anti-competitive

Wednesday 24 May 2017

In a recent case, the Competition Appeal Tribunal found the Law Society acted illegally and had abused its dominant position in the conveyancing training market.

In the case, the Law Society of England and Wales was found to have abused its position in the market for the provision of quality certifications and accreditations services to conveyancing firms in the UK.

Socrates Training, an online educational service, provides training to help firms deal with the challenges of money laundering compliance and anti-property fraud. They bought the case, claiming that the Law Society's requirement to buy anti-money laundering (AML) and mortgage fraud training from it as a condition to maintain their Conveyancing Quality Scheme Accreditation (CQS) amounted to abusive conduct.

The Competition Appeal Tribunal (CAT) agreed with Socrates' view and ruled that the Law Society acted illegally by entering into anti-competitive agreements.

The CAT found that from April 2015, the Law Society’s mandatory requirement that solicitors had to purchase its own course for accreditation purposes was unlawful. Conveyancing firms have a statutory duty to provide their staff with AML training and the Law Society had illegally tied both the training requirement and the accreditation elements, to the detriment of competitors and the conveyancing firms that used its services. 

The extent of the Law Society’s dominance on the accreditation market, combined with the inability of any other supplier to provide a competing scheme, meant that firms had no choice of training provider once they decided to become accredited. Competition was appreciably distorted by the requirements and found to be in breach of Chapter 2 of the Competition Act 1998 (“CA98”). The CAT also found that the agreements between the Law Society and the law firms that became CQS accredited appreciably restricted competition in breach of Chapter 1 CA98.

In response to the Judgment, the Law Society has said that it is grateful for the CAT’s guidance in relation to the CQS, that it had withdrawn the training modules with immediate effect and would be taking steps to ensure that similar issues do not arise in future.

In a statement, 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. We note the decision and have and will take steps to avoid similar issues in the future."

A spokesman commented that the Law Society had not decided yet whether to appeal the decision and will first consider the judgment in full.