Bar Standards Board set to become ABS licensing authority

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30 March 2016


BSB: expecting 20 applications a year

BSB: expecting 20 applications a year

The Bar Standards Board (BSB) has received the green light to license alternative business structures (ABSs).

The approval from the Legal Services Board needs to be confirmed by the Ministry of Justice through secondary legislation.

The BSB will follow the Solicitors Regulation Authority, Council for Licensed Conveyancers and Intellectual Property Regulation Board in becoming an ABS licensing authority.

The BSB expects to receive 20 ABS applications a year for the first three years, and that they will come from similarly sized and structured entities to the entities it has authorised in the last year – generally small firms.

Making its decision some 11 months after the application was submitted, the LSB noted that the BSB aimed to restrict its licensing regime to “low-risk, advocacy focused ABSs whose activities are broadly similar to those of self-employed barristers and which pose similar risks and requirements.

“This is compatible with its stated aim of being a niche regulatory and reflects its relative inexperience as an entity regulator.”

The LSB said that while the licensing criteria set out by the BSB to achieve this may appear quite restrictive and “might infer that non-lawyer ownership creates a significantly higher level of risk (a view that is not shared by the LSB)”, they were in the main discretionary.

“The BSB has confirmed that as it develops a better understanding of how the market develops (and increases its own experience), it will have flexibility to authorise a wider range of ABS businesses.

“Subject to there being enough information to take an informed view, the BSB has committed to carrying out a formal review of its restrictive licensing criteria after two years of operation as a licensing authority.”

The LSB concluded that that the BSB’s cautious approach was “sensible in the light of its limited experience of regulating entities to date”.

It added: “The LSB is satisfied that the proposed licensing rules are appropriate and that the BSB is equipped to consider and authorise a wide range of applications.”

BSB director of supervision, Oliver Hanmer, welcomed the announcement. “It is testament to our desire to encourage innovation and competition and to improve access to justice within the legal services market,” he said.

The BSB said it intended to commence its ABS application process from October 2016, if the Ministry of Justice makes the necessary arrangements as planned.



One Response to “Bar Standards Board set to become ABS licensing authority”

  1. The option for firms looking to become an ABS under the regulatory regime of the BSB will be very attractive – the SRA will need to be much more firm friendly if wants to retain ABS’s.

  2. Paul Bennett on March 30th, 2016 at 7:22 pm

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