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Professions in the UK Face Greater Oversight of Competition Practices. From the Financial Times March 1, 2001
Mar 1, 2001

The United Kingdom Office of Fair Trading is to implement a reform of the regulatory framework of the professions. In an interview with the Financial Times, John Vickers said he was "sceptical about claims that special terms are necessary for particular sectors".

While it was "natural for suppliers in any sector of the economy to think theirs is a special profession," Mr Vickers said, "my feeling very much is that the principle of competition and application of competition law should be the same across the board".

The Office of Fair Trading is preparing a report on lawyers, accountants and architects that is to be published by the government next week to coincide with the Chancellorís announcement of the. Evidence of restrictive practices and price fixing in the report is likely to provide ammunition for ministerial attacks on "fat cat" professionals.

Businesses suggested this was an attempt by the government to divert attention away from the burden of red tape. But the government appears set to force the professions to change their working practices or face the threat of fines and other sanctions from the OFT.

Gordon Brown, the Chancellor, is expected to use the OFT report in his Budget speech to show the government is cutting the costs of professional services for business to improve productivity.

The Bar Council and the Law Society appear willing to change to meet competition concerns. The result should cut legal costs, particularly for small businesses for which fees are a concern. Half of the companies responding to a recent Institute of Directors survey said they got poor value from solicitors. The report will recommend the Law Society drops its ban on lawyers entering fee-sharing partnerships with other professionals - a move lobbied for by major accountancy firms, which are building global legal arms. It would also allow high street firms of professionals to band together to offer one-stop shops.

The OFT is expected to recommend an end to the ban on instructing barristers directly. Companies could save legal fees by instructing barristers directly on routine litigation, rather than being forced to go via a solicitor. The Bar Council - which has already lifted the ban for certain organizations with high volumes of legal work - appears resigned to this.

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