Bringing all legal advice into regulatory net may resolve consumer confusion, says LSB chief

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30 April 2013


Kenny: level of demand for legal services will be consistent, if not increasing

The status quo over reserved and unreserved legal activities is unsustainable and the answer may be for all legal advice to be regulated, the chief executive of the Legal Services Board has suggested.

Chris Kenny said that while work like administration of oaths is reserved – despite “negligible” consumer risk – “all kinds of people can offer all kinds of advice with no regulatory cover at all”.

Writing in the CILEx Journal, Mr Kenny said he would not be worried if the outcome of the debate on reserved activities was a “consistent levelling up, so that everything that might possible be conceived of as legal advice was somehow regulated”.

He explained: “I’m not sure you can have the position where you can go to one person for advice and have access to the Legal Ombudsman and you go to another person and you don’t.”

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There are currently just six areas of reserved legal activity that can only be carried out by an authorised lawyer: advocacy, litigation, conveyancing, probate, administration of oaths and notarial work. The LSB has to the government that will-writing be added to the list, while immigration is a regulated, but not reserved, activity.

The LSB is investigating whether ‘general legal advice’ should be reserved, but it has recently indicated that a broad reservation was unlikely to result. At the same time there are forms of regulation – such as access to the ombudsman – that fall short of full reservation.

Asked to look ahead to how legal practice will develop over the next decade, Mr Kenny also said he would be “amazed” if the current regulatory regime – with the LSB overseeing several frontline regulators – was still in place.

He said: “Sir David Clementi once talked about a ‘regulatory maze’, but the Legal Services Act 2007 managed to replace it with a three-dimensional labyrinth instead. The government was right when it said last summer that there was a job of work to be done thinking about the regulatory architecture in 2015.

“But I think you have got to think about what the risks are, whether you can get a clear single regulatory framework and how you can consolidate and simplify the legislation. Then you can work out what the regulatory task is and what regulatory body or bodies you need to do it.

“But you have got to do it that way round. Just rationalising the number of regulators because it is all a bit messy would give you a sub-optimal solution. The remarkable thing you have got at the moment is that it is a typically British solution – it looks a little bit nuts in theory but is working better in practice than anybody thought it would. But I would be amazed if in ten years’ time we are in the same place as now.”

More widely, Mr Kenny predicted that despite the economic climate, the level of demand for legal services will be consistent, if not increasing: “People will find themselves wanting a level of certainty around some transactions that pre-recession they maybe could have put down to experience. They are going to find their employment status that much more uncertain. You are going to see a level of personal stress and uncertainty that might translate into family law.”

He continued: “The challenge to the industry is to make the proper supply side response to that, which will be tough. We are going to see pressure because people (a) don’t have cash and (b) don’t want to pay the kind of rates that are charged now. There is a challenge to either find different ways to meet the need or to explain precisely what clients are getting for that level of fees, so people understand what the value is.

“You will find consumers are more assertive. But assertive will not mean they are right. There is a task for firms, practitioners and professional bodies to do what they can to raise levels of legal literacy.”

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