Law Society to be spared annual internal governance check – because it is bound to fail

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By Legal Futures

3 July 2012


Law Society: on report until September

The Law Society will not be required to certify its compliance with the rules on internal governance because it is bound to fail the test, the Legal Services Board (LSB) has decided.

The society put new governance arrangements in place last year, which the LSB has described as “somewhat fragile”.

Every year the LSB requires those approved regulators which have both representative and regulatory functions to certify that the regulatory arm operates independently in line with the board’s internal governance rules.

The LSB concluded that the Law Society was not compliant last year, although it said the new arrangements agreed between the society and Solicitors Regulation Authority (SRA) had the potential to be compliant. To ensure they were properly implemented, the LSB activated powers under section 55 of the Legal Services Act to put the Law Society under ‘special measures’ and require it to provide a monthly report on progress.

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In newly released papers – detailing how the 2012 certification round will work – the LSB said: “We will not be asking SRA/the Law Society to certify compliance this year as they will be unable to… [We] will ask them to certify compliance when we reach a suitable point in the section 55 reporting process. However, we do not expect them to be compliant until January 2013, when the SRA board achieves a lay majority.”

As of April the LSB had received three monthly reports – and also two sets of papers for the new business and oversight board that governs relations between the SRA and Law Society – which it said have “broadly… not included issues that are particularly concerning”.

But it continued: “However, it is clear that the operation of the new arrangements remains somewhat fragile and are yet to be fully embedded in the day to day operations of the SRA and Law Society.”

The Law Society has to provide the reports until September, but the LSB has said that if it is confident that the new arrangements are operating appropriately, it may suspend the requirement before then.

 

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