Law Society Guilty of Abusing Dominant Market Position
In an embarrassing decision for the Law Society, a tribunal has ruled that it abused its dominant market position by only granting accreditation under its Conveyancing Quality Scheme (CQS) to solicitors who had undergone its own in-house training in the detection of mortgage fraud and money laundering.
A private company that provided such training had complained to the Competition Appeals Tribunal (CAT) that the Law Society was engaged in anti-competitive conduct. If they wished to achieve accreditation under the CQS, conveyancing solicitors had no choice but to undertake the Society’s mandatory courses.
In upholding the complaint, the CAT noted that, by mid-2016, the CQS had grown to attract over 3,000 members – more than 60 per cent of all law firms in England and Wales that were active in residential conveyancing work. CQS accreditation had become a ‘must have’ for law firms engaged in such work and, by April 2015, the society had established a dominant position in the relevant market.
The supply of training was functionally distinct from the supply of accreditation under the CQS. However, both had been bundled together in a single package in a manner that could discourage new entrants into the market and actually or potentially impair competition from other training providers.
The CAT concluded that the obligation to obtain the training required for CQS accreditation exclusively from the Law Society breached prohibitions enshrined within the Competition Act 1998. The ruling opened the way for the company to seek compensation for any loss that it had suffered due to the Society’s conduct.