20 December 2012

Mayson warns regulators against denying ABS licences over access to justice fears

‘Advice deserts’ that appear as a result of competition brought about by alternative business structures (ABS) cannot be dealt with effectively by regulators operating under the Legal Services Act, an academic study has argued.

Meanwhile, legal regulators looking to carry out their statutory obligation to improve access to justice are wrongly conflating it with access to legal services and lawyers, and as a result are being “over-ambitious”.

Published by the Legal Services Institute – the think tank headed by Professor Stephen Mayson – the paper Improving Access to Justice: scope of the regulatory objective argued that, instead, the Act’s regulatory objective of improving access to justice “should be defined narrowly rather than broadly”.

Written by Professor Mayson, policy assistant Olivia Marley and senior policy adviser Stella Dunn, the study predicted there will be accusations that ABSs are causing advice deserts if traditional law firms go out of business in areas served by ABSs. But although the impact on access to justice is one of the criteria against which an ABS application is judged, they cautioned that regulators should recognise their limitations.

“Within the framework provided by the Legal Services Act, we question whether advice deserts can be effectively regulated against…

“An advice desert, whether in a geographical area or within a certain area of law, might not be a problem that regulation… can resolve, given that the underlying decision made by firms will be one of their competence and capability, economic viability and survival.”

Even where an ABS licence applicant is pursuing a deliberate business strategy that will result in fewer local providers of legal services, regulators should resist withholding approval, said the authors. “The potential reduction in the number of law firms or other competitors in that location would not, for us, be sufficient for the licensing authority to deny the authorisation.”

In general, the Legal Services Board and other regulators should not hatch ambitious plans to meet their obligations because in fact they have a limited influence over access to justice, they said.

“Our conclusion is that ‘justice’, strictly speaking, is provided only by courts and by other voluntary processes that resolve a dispute by reference to the parties’ legal rights and obligations. On this view, access to justice can be affected only marginally – and often not directly – by regulators.

“Thus, despite good intentions to influence access to justice on a much wider scale, regulators might be facing a more constrained and ultimately more manageable obligation than at first blush appears to be the case.”

A source of “possibly over-ambitious intentions” by regulators is their tendency to conflate both access to legal services with access to lawyers, and the regulatory objective of improving access to justice with other regulatory objectives – to promote competition, the rule of law and an independent legal profession, and to increase public understanding of the citizen’s legal rights and duties.

“Unpicking these connections is, to our way of thinking, a necessary part of understanding what ‘access to justice’ truly is,” the study said.

Discussion of access to justice has “too often” focused on improving ‘access’ to legal services which might lead to the achievement of justice, instead of considering exactly what ‘justice’ users need to gain access to, the authors suggested.

 

By Dan Bindman

Tags: ABS, access to justice, Alternative business structures