LSB pushes legal regulators to drive up performance and improve governance

The Legal Services Board (LSB) has published annual reports on the performance of the eight legal services regulatory bodies.

Each organisation regulates different types of lawyers and carries out its responsibilities in different ways. Nevertheless, they have the same responsibilities under the Legal Services Act 2007 (the Act) and are assessed against the same 27 outcomes across five standards. The standards are: regulatory approach, authorisation, supervision, enforcement, and well-led: governance and leadership.

The performance of most of the regulatory bodies has improved since the last assessment in November 2019. Notably, the Council of Licensed Conveyancers (CLC) and the Solicitors Regulation Authority (SRA) have met all the outcomes required across all standards.

However, although regulatory bodies are generally performing well against the authorisation, supervision and enforcement standards, there is a lower level of achievement in meeting the standard required for outcomes under the regulatory approach and well-led standards. Further action is under consideration:

  • There are several not met outcomes under the regulatory approach standard. Consequently, the LSB will consider undertaking a thematic review in the coming year, depending on regulatory bodies’ progress in meeting the standard required.
  • Several of the not met ratings are associated with the quality and clarity of applications for statutory approval of changes to regulatory arrangements and practicing certificate fees. While some regulators appear to be experiencing little difficulty in meeting these standards, the LSB recently started a review of its rules and guidance in this area with a view to ensuring that there is a clear and transparent focus in all applications on the impact of proposed changes on the regulatory objectives set out in the Act.

In last year’s report, the LSB highlighted a concern that some regulatory bodies had not fully embedded its regulatory performance framework into their governance arrangements. The LSB subsequently launched targeted reviews of the Bar Standard Board (BSB) and Faculty Office (FO) on performance against the well-led standard. These reviews formally began in September 2020 and are scheduled to conclude in early 2021.

This year the LSB introduced a new outcome which assesses regulatory independence, and, unlike the other outcomes, it applies to both regulatory bodies and approved regulators. All the bodies currently meet the standard required. This means they have demonstrated that there is separation between regulatory and representative functions.

Matthew Hill, Chief Executive of the Legal Services Board, said:

“Independent regulation protects the public and benefits the profession, and we have seen some welcome improvement across the regulatory bodies, particularly in their enforcement of standards and increased independence. However, there continue to be areas where improvement is needed.

“No regulatory body that is putting the public first in its decision-making and acting transparently to promote the regulatory objectives set out in the Act should have any difficulty in meeting the standards of good regulation.

“We expect the regulators to take the performance assessments as indicators of where improvements are needed to ensure they have the right mechanisms in place to carry out their regulatory duties effectively and efficiently. Appropriately regulated lawyers who deliver consistently competent and ethical services will give consumers stronger confidence in the sector and help build a legal services market that better meets the needs of society.”

Stephen Ward, CLC Director of Strategy says:

“The CLC prides itself on achieving regulatory best practice and so it is satisfying to have met all of the LSB’s performance outcomes in this year’s assessment. Our focus for the next year will be to maintain our level of compliance and to continue to innovate, for example by extending the information available to help consumers choose their lawyer.”

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