Coalition: ABSs are the future for the law

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By Legal Futures

11 June 2010

The Coalition government has scotched rumours that it is to scrap alternative business structures (ABSs), Legal Futures can confirm.

We further understand that both ABSs and the Office for Legal Complaints (OLC) are likely to get the green light from the Cabinet committee set up last week to review all regulation in the pipeline for implementation which had been inherited from the last government (see story).

Speaking to reporters yesterday for the first time since being appointed legal services minister, Jonathan Djanogly (pictured) said he was “very pleased” to have the opportunity “to set the record straight” after reports last week that he was opposed to ABSs.

“I think it’s important that the legal profession engages with the concept of ABSs to look to see how they’re going to apply them to their own situations, because that is the way that law in our country is moving,” he said.

While the plan for ABSs to come into being on 6 October 2011 is still in place, Mr Djanogly said he was prepared to listen to any Law Society and Bar Council arguments that they should be delayed so as to ensure they are introduced properly and maintain access to justice.

Mr Djanogly also expressed strong support for the OLC, also known as the Legal Ombudsman, which is due to open this October. A Ministry of Justice (MoJ) spokesman confirmed that the OLC “remains on schedule to open for business in October 2010 as planned. Offices have been secured, senior posts have been filled and recruitment of more than 200 staff is underway”.

Legal Futures understands that both ABSs and OLC are likely to be approved shortly by the Cabinet’s reducing regulation committee, headed by business secretary Vince Cable. The fact that the cost of the new regulatory regime is met by the profession means that scrapping them would not generate any cost savings for the government.

The MoJ spokesman said the OLC “will streamline the legal complaints procedure and fits with the government’s commitment to reduce regulatory burdens”.

Mr Djanogly also confirmed that the possibility of bringing all solicitors’ client accounts together in order to generate extra interest which would then top up the legal aid fund, is an option that remains on the table as the MoJ begins a major legal aid “policy assessment” (a term the minister preferred to “review”). The idea was first mooted by the Conservatives in opposition (see story).

The minister predicted that ABSs would generate savings to the legal aid fund over the medium to long term through the greater efficiencies that they would promote.

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