collaborative law

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Another (austerity) budget

Tax policy to incentivise mediation

I have often wondered, when sending my clients their legal bills, how on earth they can afford my services?  In short, how can they afford access to justice?  The cost charged for the work  carried out will look imposing enough.  But the killer touch is when VAT at 20% is added to the bill.  A stiff bill becomes a….really large bill.  This is important because most legal aid for family work has now been kicked into touch.  “Access to justice” is no longer a slightly dry form of words bandied around by academics or politicians.  It is real and it affects us all because it you can’t afford to pay for it, you ain’t getting it.

When providing costs estimates to clients at a first consultation the figure arrived at will be discussed and agreed.  A client will be encouraged to help themselves as much as possible, or use my online platform for document production: anything to keep the cost down.  So an estimate is arrived at and the client thinks: OK, I’d rather not be using my money to pay legal bills but I need the help and I can live with that likely cost.  Then comes the point when you have to add in VAT at 20%.  The client’s face always drops.  (Mine would in their position).  Adding in VAT at 20% has just broken the bank.  There is access to justice – you just have to clear the VAT hurdle first.

This post was first created as a draft over a year ago and then put in mothballs.  I’ve brushed off the cobwebs and published it now,  prompted by an article in The Law Society Gazette about Belgian lawyers resisting the imposition of VAT on their bills.  Not the sexiest of links I’ve stuck in a post but try to bear with me.

The problem with VAT

The imposition of VAT on legal services does not create a level playing field.  Because:

  • If a VAT registered company needs legal services (and think of the millions spent by large corporates every year on their legal needs) they can reclaim the VAT they have paid out so it is cost neutral for them.  Sweet.  So spend all you like, lads, on that latest merger.
  • If you are an individual you pay 20% VAT on top of your legal bills and can’t reclaim it from anyone.  Harsh.  So you can’t afford to get legal advice on access to your kids or financial agreements to keep a roof over your head, after all.
  • Some of my clients are individuals and don’t pay a penny of VAT on their bills.  (No way!)  Yes way.   Because they live abroad in non-EU member states and therefore don’t have to pay VAT on legal services even though the legal services are being conducted in the UK.  Fortunate for some.

I mean, I understand there has been (still is) a recession: the government needs these tax receipts. But access to justice should mean something: the government has taken the axe to civil legal aid and promoted mediation.  Unfortunately, the government’s championing of mediation was a fig leaf to distract from the legal aid cuts.  The catastrophic fall in mediation referrals is testament to the fact that the presentation of mediation as a panacea in family law work was political window-dressing rather than well-considered, appropriately resourced social policy.

If the government is serious about the promotion of mediation, and is equally serious about preserving access to justice, then I have a suggestion by which it can redeem itself, ever so slightly. My suggestion focuses on family law.

The solution

We all know that a blanket tax, like VAT, penalises the less well-off.  We also know that the government keeps banging on about mediation whilst doing nothing (in resource or policy terms) to promote its take-up.  Talking of policy, they really need to catch up with the fact that there are other options available to keep people out of the courts as well, such as collaborative law and family arbitration.  We know, despite the political window dressing, that the withdrawal  of civil legal aid has directly and adversely impacted upon  many individuals’ rights of access to justice – they can’t afford it – full stop.

So, here is my suggestion to help the government climb halfway out of the hole of its own making.

  1. Spend a few quid telling the public that legal aid is still available for mediation (on a means tested basis);
  2. Permit mediators and lawyer/mediators to reduce the rate of VAT on their services to 5%;
  3. Permit collaborative lawyers to reduce the rate of VAT on their services to 10%.  Family consultants and financial neutrals assisting the parties in the collaborative process be allowed to do the same.
  4. Impose a reduced rate of VAT at 15% on legal advice offered outside mediation or collaborative law.  This would apply to family arbitration, and work conducted under the pre-action protocol (attempting via solicitor-led negotiation to resolve matters without recourse to court proceedings).
  5. Impose 20% VAT on legal services from the moment one of the parties issues contested legal proceedings.  An application for a consent order (so not really contested) would attract VAT at the rate of 5% if it follows on from mediation and 10% if it arises following the collaborative process.

In my humble opinion, I think this is a win/win scenario.  The lawyers don’t get a penny extra, so the Daily Mail won’t get its knickers in a twist.  It will make legal services  (access to justice) more affordable.  It will incentivise individuals to choose dispute resolution models such as mediation and collaborative law that objectively produce better outcomes at lower cost.  The reduction in VAT receipts will be offset (I’m guessing) by the drop in numbers using the (expensive to maintain) family court system and perhaps even reverse the increase in litigants in person that is now threatening the bring the courts grinding to a halt.  Timely legal advice can prevent a host of problems later on and I don’t know how you even begin to count the cost in developmental and emotional terms for those kids whose parents cannot stop warring without legal intervention, or who don’t receive maintenance or the opportunity to develop a relationship with a parent who has been excluded from their lives.

Worth a punt?

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In keeping with the spirit of Family Dispute Resolution Week  I am pleased to be able to offer another video snippet of my chat with Stephen Sulemeyer, an expert in collaborative law practice in California.

It is ironic to hear this week that most members of the public who have a family law dispute would rather go to court than use an alternative dispute resolution option  such as mediation.  I think this is a great pity and I discussed the failings of policy planning from the Ministry of Justice in this regard here.

For now, please have a look at Stephen answering another common question from the public about collaborative law: is it suitable for everyone?  I think his answer is honest and encouraging.  Collaborative law, like mediation and family arbitration, cannot be a panacea, but to grizzled family law litigators like me, the willingness of a client to at least consider these alternatives to court, is a no-brainer.

 

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I was very fortunate, recently, to attend a training session with other practitioners of collaborative law, hosted by Stephen H. Sulmeyer, J.D, Ph.D.  Stephen is a charming man normally to be found in his native Californian habitat.  The members of my collaborative law group, Brightpod, managed to entice him down to Brighton whilst he was on his travels in England.

Stephen is a collaboratively trained lawyer, mediator and psychologist.  Added to which, his fondness for quoting Keats during the training makes him a top bloke in my estimation.

Stephen offered some fascinating insights into collaborative law and laid down some challenges to the lawyers in my group (I put my hand up here) to get out of their comfort zone if they wanted to offer really effective solutions for families in conflict.

Stephen was good enough to allow us to film part of the training day and I’m pleased  to offer some of the video snippets below.  The only downside is that Stephen had to contend with an interviewer (err… that would be me) who was so enchanted by the answers that he kept forgetting the questions.

What is collaborative law all about?

Please have a look at the video below where Stephen provides an introduction to collaborative law.

 

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I put up a post recently about Dispute Resolution Week: please read it here.   This takes place, as I type, in various forms and guises across the country all this week.  The aim: to promote alternatives to the adversarial court process for people with family law disputes.

Resolution is the organisation behind the initiative, driven in many different ways by the members of Resolution: lawyers, mediators, collaborative practitioners and other professionals who are committed to keeping families out of court.

I’ve posted a video from Resolution below telling you all about the Dispute Resolution Week initiative.

I’ve got my hands on some great video content dealing with collaborative law  courtesy of my local collaborative group called Brightpod and I’ll post that just as soon as I can.

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Family dispute resolution week divorce finance toolkit

BECAUSE ONE SIZE DOESN’T FIT ALL

I want to say a few words about Family Dispute Resolution Week.  I was in Nottingham a few weeks ago to attend Resolution’s Dispute Resolution Conference.  It’s the third annual conference in a row and I keep going back because I meet lawyers, mediators and collaborative practitioners who are utterly committed to pushing the boundaries of their own practices to provide better outcomes for families.  This usually means keeping families out of the court process. So I learn a lot and I come away feeling inspired.  Which is just as well when having to deal with the obstacles that get in the way of real change.  Let me refer to the usual suspects.

The usual suspects

It is not easy to push boundaries in any professional practice.  Here are a few of the obstacles in the way of pushing family dispute resolution:

  • Public ignorance.  People simply don’t know enough about the dispute resolution options that are available.  Resolution has been pushing the options for many years and any reader who is unaware of the rich resources on the Resolution website needs to hop over there pretty quickly and bookmark it for future, constant reference.
  • Professional indifference. In a sense, lawyers are the gatekeepers to the dispute resolution options as far as the public are concerned.  This is one of the reasons that the loss of 1,000 high street legal firms in the last 12 months caused the take-up of mediation to be sliced in half.  But I still think the lawyers who are left could do a better job of ‘selling’ the merits of mediation, collaborative law or (the new kid on the block) arbitration. Perhaps some lawyers are worried about turning away business if they cannot offer mediation or the collaborative discipline.  Well, call me old-fashioned but lawyers should put the interests of their clients first.  So, if a family breakdown is crying out for dispute resolution instead of the family court trial by combat then the lawyers need to pack their clients off to a mediator or a collaborative practitioner.  Better still, they should get trained up themselves to be able to offer this resource to their clients.
  • Political ideology.  The UK government ‘discovered’ mediation relatively recently, in the same way that European settlers, wading out of the  American surf 450 years ago, ‘discovered’ the New World.  It had always been there.  But this new-found zeal for mediation unfortunately coincided with the financial meltdown: the perfect backdrop against which to attack legal aid, a pillar of the post-war welfare settlement between state and citizens.  Even better, this astonishing piece of vandalism against the body politic would serve to stick it hard and fast to two despised constituencies: the ‘undeserving’ poor and the fat cat lawyers.  In short: get rid of as much family legal aid as possible and force the low income  punters to run from the lawyers and into the welcoming arms of the army of mediators ready to take their place.  Yeah, that worked really well.  Hands up, Mr Grayling, didn’t you foresee that all the punters would run off to the courts as litigants in person putting a strain upon the court services whose budgets had already been slashed?

Better news: Family Dispute Resolution Week

Well, I like mediation anyway: always happy to get my clients off to see a mediator.  But mediation is not the only gig in town. You should check out collaborative law and family arbitration on the Resolution website.  How can you find out more?  Resolution, the national organisation of family lawyers is promoting the second …

Family Dispute Resolution Week

from the 25th to the 29th November 2013

 

Did you get that?   This means Resolution members throughout the country will be hosting events and trying to gain publicity for the alternatives to the court process.  In the main this means promoting the benefits of Mediation, the collaborative law process and Arbitration.  You may hear features on the radio, see articles in the local press or even bump into smiling faces at your local court handing out flyers and lending a sympathetic ear.

My bag is collaborative law where the parties sign an agreement not to go to court and the lawyers work with each other (instead of against each other) in the interest of the whole family.  Collaborative lawyers form local groups to share experience and improve practice.  I belong to two pods in the Brighton area: Sussex Family Solutions and Brightpod.  We will be promoting the benefits of family dispute resolution to the wider public.  Twitter users should be able to search for local developments using #keepitoutofcourt closer to the time.  And why not follow @ResFamilyLaw why you’re at it

Divorce Finance Toolkit

Mr Grayling – our man at the Ministry

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Many people are unsure what type of process would best suit them when considering divorce or separation.  The days of running off to the court to issue a divorce application before your spouse are long gone (well, mostly).  Many clients would prefer to keep the process out of court unless it can be helped and, sometimes, involving the court is the only option.

Terms like ‘mediation’ or ‘collaborative law’ are chucked at prospective clients by lawyers in an information blizzard at a first meeting.

Divorce Finance Toolkit thinks a picture (or a diagram) paints a thousand words and therefore offers the following excellent example from Resolution which can be found here.  It is worthwhile considering each of the options open to you carefully.  Most family lawyers will send you a comprehensive letter following a first consultation which should set out the options for you and perhaps discuss the pros and cons of each model in view of your own particular family circumstances.

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