Legal Services Regulation: Maintaining the Confidence of Consumers, Lawyers and the Public

The Legal Services Board (LSB) has today announced a comprehensive package of measures to ensure the regulation of lawyers is carried out independently and in the public interest.

The separation of regulation from representation was one of the key drivers for recent reforms in the legal services sector, culminating in the Legal Services Act 2007. In its decision document, published after a full public consultation, the LSB explains how it intends to refine proposals to ensure society as a whole can be confident that the regulatory framework for legal services has the public interest at its heart. The package of measures covers critical areas including the composition of regulatory boards, ownership of the appointments process for board members and the control and management of resources. Key aspects of the rules announced today are: • A requirement that regulatory boards of Approved Regulators have a lay majority, whilst allowing flexibility on whether the chair is held by a lay person or a lawyer; • Proposals to ensure the provision of resources generally, and corporate shared services in particular, is as effective, efficient and fair as possible; and • An indicative timetable, which will see rules made by the board translated into action. In developing the document published today, Internal Governance and Practising Fee Rules, the LSB was informed by responses to a discussion paper published earlier this year. The new publication moves beyond policy and sets out detailed steps for delivery of the independence agenda in practice. The proposed rules, once made, will come into force on 1 January 2010. The LSB will work with Approved Regulators to assess the risk of potential harm to the regulatory objectives or to public confidence in the regulatory framework that any arrangements that do not comply with the rules on 1 January 2010 may present. This will then inform a proportionate approach to implementation of the rules and onward compliance tailored to each body. Chairman of the Legal Services Board, David Edmonds, said: “A comprehensive separation of regulatory and representative functions is paramount when it comes to consumer confidence in legal services. A widespread acceptance that self-regulation did not work has underpinned policy in this area and the need for action has been well and truly established. These proposals move beyond policy and shape in practice how separation will look. They are designed to embed independence in all aspects of regulation and in a manner in which the public can have absolute confidence.” Notes for editors: 1. Two papers are published by the LSB today. A summary of consultation responses can be accessed at: http://www.legalservicesboard.org.uk/what_we_do/consultations/closed/regulatory independence/response_160909.pdf. A supplementary consultation paper can be accessed online at: http://www.legalservicesboard.org.uk/what_we_do/consultations/index.htm. Responses to the latest consultation must be submitted by noon on 30 October 2009. 2. The earlier consultation paper, published on 25 March 2009, is available at: http://www.legalservicesboard.org.uk/what_we_do/consultations/2009/pdf/regulatory_independence.pdf. The 40 submissions received by the LSB are available at: http://www.legalservicesboard.org.uk/what_we_do/consultations/closed/submissions_regulatory.htm 3. The LSB is required to make rules under section 30 (internal governance) of the Legal Services Act 2007 before 31 December 2009. It proposes to make rules under section 51 (control of practising fees) at the same time. In making its rules, the LSB is required to act in a way that is compatible with the regulatory objectives fixed by section 1 of the Act, and in a manner considered by it most appropriate for the purpose of meeting those objectives. 4. The Legal Services Act provides for the creation of the Legal Services Board as the oversight regulator for legal services in England and Wales. 5. The LSB oversees eight “approved regulators”, which in turn regulate individual lawyers and organisations. The eight approved regulators, designated under Part 1 of Schedule 4 of the 2007 Act, are the Law Society, the Bar Council, the Master of the Faculties, the Institute of Legal Executives, the Council for Licensed Conveyancers, the Chartered Institute of Patent Agents, the Institute of Trade Mark Attorneys and the Association of Law Costs Draftsmen. 7. Some approved regulators have already started work to separate their regulatory and representative functions. For example, the Law Society has established the Solicitors Regulation Authority (SRA) and the Bar Council has set up the Bar Standards Board (BSB). 8. The legal profession currently consists of some 15,000 barristers, 108,000 solicitors and 14,000 individuals operating in other aspects of the legal profession such as conveyancing. The sector has been valued at £23.34 billion per annum.