“Shameful, disgusting and wrong”
The Law Society Gazette has reported an increasing number of people who say they were pressured by solicitors into taking out high interest loans to fund legal costs for family cases. After recovering from the shock of the news, Partner Jonathan Whettingsteel shares his thoughts.
When I read the reports, I felt quite sick. Clients needing family law services are often the most emotional, vulnerable and shaken in the profession, so the idea of taking advantage of people in the situations I have seen is shameful, disgusting and wrong.
In one complaint upheld by the Legal Ombudsman last year, it was found a client had been pressured by their solicitor into taking out a loan to fund their divorce. The unnamed solicitor refused requests for referral to mediation without reason, and supplied incorrect information to both the loan company and client about the progress of the divorce.
The solicitor was found to have been dishonest, inflating costs from up to £1,745, to the client needing to borrow £45,000 at 18% APR.
This is not an isolated incident. Complaints to the Legal Obudsman about solicitors advising against mediation and encouraging court proceedings, incurring substantially increased costs, is on the rise. There are even reports of clients who have access to funds being encourages to take out a Novitas loan, incurring interest rates ranging from between 18% and 30%.
The Law Society Gazette reports that in the last 10 years, 20 complaints have been made to the Legal Ombudsman regarding the conduct of solicitors relating to Novitas loans. Less than half have been upheld.
Common guidance for anyone considering a loan would be to get legal advice, but I suppose if it is for legal advice, many would not see the need. One report of a client being referred to a firm who provide “independent legal advice”, but its business was actually arranging loans for Novitas.
This appalling, fraudulent behaviour flies in the faces of the solicitors code to provide impartial information and act in the best interests of the client.
With a a dramatic reduction in the number of people eligible for Legal Aid in the past decade, many people who would have received support from public funding, now have no way of covering legal costs. Loans are always an option, but its seems there are those that have seen this an opportunity. Whilst solicitors should always explore all possible alternatives before deciding what is best to recommend to the client, these individuals have engaged in reprehensible behaviour that threatens to tarnish all of us in the profession.
All we can do at Dutton Gregory Solicitors is provide the reassurance of a combined century of experience in practice, the promise of providing truly independent advice in both law and the procedures and processes available to help clients reach the most efficient and affordable path to resolution.