BSB unlikely to regulate ABSs until 2015
Bar: “continuing delays” beyond BSB’s control
The Bar Standards Board (BSB) is unlikely to become an alternative business structure (ABS) licensing authority until 2015 and will not be regulating non-ABS firms, such barrister-only practices, before October this year, it has emerged.
The BSB had originally hoped to start regulating non-ABS firms last year and ABSs early this year.
In papers for last week’s BSB board meeting, the regulator described the introduction of its new Handbook, which came into force on 6 January 2014, as a “significant achievement”.
However, it said provisions relating to non-ABS firms had to be “decoupled” from the Handbook after discussions with the Legal Services Board highlighted a potential problem with the regulator’s powers over entities.
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As a result the BSB and LSB jointly instructed leading counsel to give advice on the Legal Services Act.
The regulator said it believed the problem had now been resolved, allowing it to go ahead with a final application to regulate non-ABS practices by the end of this month.
Meanwhile, the BSB will apply for a section 69 order to “amend or buttress its powers”, while pressing ahead with a “consent-based regime” as an interim measure.
Section 69 orders allow the Lord Chancellor to modify the Legal Services Act 2007 to allow legal regulators to do their work more effectively, and in particular ensure they have similar powers over traditional firms and ABSs.
The BSB said that assuming approval from the LSB was forthcoming, its entity regulation regime was “scheduled to go live in October 2014”.
Once the LSB had approved its application to regulate non-ABS firms, the BSB said it would apply to become an ABS licensing authority. “The launch of an ABS regime will be dependent on LSB approval and parliamentary time for the necessary designation orders, so this is likely to go live in 2015.”
The regulator added that many of the “continuing delays” with firm regulation were beyond its control.
A BSB spokesperson commented: “Becoming a regulator of specialist, advocacy-focussed entities and ABSs is an innovative move for us. It was always going to be a complex process – not least because we had to design a regulatory regime for entities from scratch, whereas other regulators had some of this capacity in place already.
“However, once our application is approved it will pave the way for new business models to increase client choice and expand access to justice. It will also leave barristers better equipped to compete with other legal professionals.”
Tags: ABS, Alternative business structures, bar standards board, entities
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