LSB calls for shake-up of legal services in England & Wales

The Legal Services Board (LSB) have called for the abolishment of all regulatory bodies, including themselves, and for a sole independent regulator to oversee the legal profession.

Overseeing the nine approved regulators, which in turn regulate individual legal practitioners, the LSB blueprint was published this week and outlines their vision which was announced by the chairman, Sir Michael Pitt at a Westminster Legal Policy forum event.

The single body, it proposes, will be accountable to Parliament, however the Law Society has criticised the proposals as ‘mis-timed’ and not in the public interest.

All ties between the representative bodies – in solicitors’ case the tie with the Law Society at Chancery Lane – and regulators would be severed.

The focus would be more on the type of legal service offered rather than the actual lawyer doing it. The regulation would therefore fundamentally change with the services perceived as being ‘high-risk’ subject to greater regulation, with low-risk activities having a less regulative force.

LSB Chairman Sir Michael Pitt said that the time is right to move on from the ‘stepping stone’ of the Legal Services Act 2007 to a fully formed regulatory regime he commented: 

“The existing arrangements are confusing and complex, we believe that a single regulator, covering the whole legal services sector and accountable to Parliament, would be best placed to deliver improvement, deregulate, save cost and act strategically.

“I look forward to discussing these proposals with the Government and interested parties.”

Safeguarding the public interest paramount

One of these proposals include an independent review to determine which activities should attract sector specific regulation in the future on the grounds of risk. As an example, the LSB cited the legal advice which is given to asylum seekers as being of high-risk requiring greater scrutiny.

The paper reports that there is insufficient competition in the legal sector thus restricting choice, increasing cost and impeding new innovation in the sector.

Regulation ought not to be based on professional title

Whilst it acknowledges the brand power of the titles within the legal profession, the LSB have stated that regulation should no longer be based on professional titles such as solicitor or barrister:

“We do not consider that regulation should in future be based on professional title – in other words, the regulatory rules should not be targeted at particular professionals solely on the basis of their professional titles.

“Title acts at the moment as a barrier to sustainable entry to many parts of the market for legal services because a prospective market entrant without the title in question may find it difficult to gain market share.”

Law Society President, Robert Bourns described the proposals as ‘an interesting contribution to a future vision for legal services regulation’. But he added: “We simply don’t think that it is in the public interest to embark on such changes at this time.

“During a period of unprecedented change for Britain, following the vote to leave the European Union, we must maintain confidence in all our markets and in particular the legal market. Uncertainty should be reduced, not increased.

“Embarking on regulatory change in this climate, especially when there is broad recognition that the current regulatory framework is working, is misconceived.”

He added: ‘The jurisdiction of England and Wales is recognised across the world as being independent, fair, dependable and responsive. Other jurisdictions are keen to muscle in.

“We don’t believe there is any demand from clients or the legal professions for the LSB’s proposals.”

The Solicitors Regulation Authority today said the LSB had set out a ‘strong case’ for independent regulation but urged caution about making wholesale changes.

SRA Chief Executive, Paul Philip said: “We welcome the publication of the LSB’s paper.

“The report contains some useful thinking on the future regulatory landscape and we are pleased that the LSB has set out a strong case for regulation to be independent of both the government and professions. We are clear that making regulators independent – and accountable to parliament – will help build public trust and should also help speed up necessary reforms to make the sector more competitive.

“However, we should pause for thought when considering fundamental constitutional changes, such as regulating by activity or moving to one single regulator. Some consolidation across the regulators seems to be inevitable in the longer term, but we must avoid being distracted by rewriting the regulatory landscape to the extent that we blight much needed market reforms.”

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