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The Law Society failed to put forward specific proposals, supported by empirical data. It cannot therefore be said that the Law Society's proposals are fair to consumers and are not anti-competitive. There is nothing for the Administration to evaluate except a proposal that the Costs Committee should decide the level and structure of the fee system. The Administration does not believe this proposal meets community aspirations and has therefore included in the Bill the provisions to abolish scale fees for conveyancing work, a move which has wide community support.

Since the Report on Legal Services was published, the Law Society and some individual solicitors have argued strongly against the abolition of scale fees. Let me respond to some of the arguments they have raised.

One point that is repeatedly asserted is that the abolition of conveyancing scale fees in England has been a "disaster", in that it led to a price war, which resulted in shoddy work, increased claims for negligence, and the bankruptcies of many solicitors. I would like to set the record straight.

Scale fees were abolished in England in 1973. 6 years later a Royal Commission undertook a comprehensive study of conveyancing throughout the country. There is no reference in the report to any of the problems I have just mentioned.

In recent years, England has suffered its worst recession this century and this has inevitably affected solicitors in many areas of their work. The volume of domestic conveyancing halved between 1988 and 1992. Prices fell in real terms between 1986 and 1993 by 45%.

An equally profound change occurred in the financial services industry, where keen competition developed for the sale of a wide range of complex financial products. This development gave financial institutions a considerably enhanced influence over all aspects of the housing market.

It is clear that solicitors in England have been faced with serious difficulties in recent years, and many have become bankrupt. But there is no basis for linking those difficulties with the abolition of scale fees in 1973. Nor is there any basis for assuming that things would have been different had scale fees still been in place. On the contrary, in March 1994, a report of the English Law Society's special working party on conveyancing services included the following statement -

'We have concluded that compulsory and unworkable and ineffective.'

recommended fee scales would be

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