Set the date to scrap the LSB, Bar regulator tells government

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By Legal Futures

4 April 2012


Statutory powers: LSB should be actively discouraged from abusing the oversight regulatory powers envisaged by Parliament, says Bar Council

The “end is in sight” for the Legal Services Board (LSB) and it can be abolished in about three years’ time, the Bar’s regulator has told the government.

In a separate but equally bullish response to the Ministry of Justice’s triennial review of the LSB, the Bar Council stopped short of joining the Bar Standards Board (BSB) in calling for abolition, but said the LSB should be reined in and “actively discouraged… from abusing the oversight regulatory powers envisaged by Parliament”.

Both bodies said the Legal Services Consumer Panel should be scrapped in three years’ time as well, “unless, by that time, greater value is amply demonstrated”.

The BSB submission fiercely attacked the LSB for going beyond what it saw as the LSB’s statutory role as an oversight regulator, citing a range of issues, such as the Quality Assurance Scheme for Advocates and Legal Education and Training Review. It also accused the LSB of micromanaging and duplicating the work of the frontline regulators.

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It said: “The LSB does not limit itself to an oversight role in the manner envisaged by the [Legal Services] Act. It is often highly prescriptive in its requirements, particularly in order to give primacy to consumer protection over other considerations. This then means that there is little room for approved regulators to exercise their own, proper, discretion.”

The submission concluded: “Once independent regulation has become the normal mode of operation, alternative business structures are a reality and all regulators are reflecting the regulatory standards framework in a manner appropriate to them, then the LSB should no longer be needed. The reforms of the Legal Services Act will be fully operative.

“The checks and balances contained

in the regulatory standards framework will ensure that the regulatory objectives are properly upheld. There will be no ongoing need for the additional cost of and time required to respond to an oversight regulator. It has been estimated that the cost to the profession to date is upwards of £27m.

“The BSB considers that the end is in sight and the Ministry of Justice should act now to set a date by when the LSB will no longer be needed. Combined with clear articulation of the LSB’s role, this will ensure that all LSB activities are targeted and focused in the time period allowed by the Ministry of Justice. Our own estimation is that a further three years or so should be sufficient for the LSB to complete the necessary tasks.”

In that meantime, the BSB said the LSB should be exercising oversight of a judicial review nature, “intervening only when the frontline regulators are acting unreasonably, rather than duplicating the function of the frontline regulators”, a theme echoed by the Bar Council’s response.

The Bar Council said the LSB has “no remaining role to play” in relation to some of the functions imposed on it by the Act, although said it has continuing functions to discharge in its role as an oversight regulator. “Principally this may include the licensing and supervision of alternative business structures.”

The response added: “Given its demonstrable propensity to exceed its limited remit, to the detriment and cost of the [frontline regulators] that will ultimately be passed onto consumers of legal services themselves, the LSB should be actively discouraged by the government from abusing the oversight regulatory powers envisaged by Parliament.”

It too said the LSB should only intervene where it is able to demonstrate, on Wednesbury grounds, that an approved regulator is acting unreasonably.

On the consumer panel, the Bar Council endorsed the BSB’s view that it is “not adding a great deal of value” unless it does more to help regulators reach out to consumers, and helps with increasing public understanding of citizens’ legal rights and duties.

See blog: Putting the LSB back in its box

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