SRA: Law Society “inadvertently” makes case for independent regulation

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11 September 2013

Collins: Law Society takes a narrow view

The Law Society’s bid to regain responsibility for much of the regulation of solicitors has “inadvertently” made the case for completely independent regulation, a leading figure at the Solicitors Regulation Authority (SRA) has claimed.

In a paper to today’s SRA board meeting, executive director Richard Collins said the Law Society’s response to the Ministry of Justice’s legal services review is based “substantially on criticisms of the SRA” and “takes no account of now established regulatory best practice, or of the issues that led to the requirement for independent regulation in the Legal Services Act 2007”.

These included the Law Society’s “own performance prior to that date and, for example, the issues well articulated by Sir David Clementi in his report”.

Mr Collins argued that the Law Society had taken a very narrow view of the issues raised by the Ministry of Justice’s call for evidence – “for example, it takes little account of how such an approach could address the issues arising from an increasingly diverse market with multiple, and overlapping, professional title regulators.

“Given this narrow view, it may well be weakened as a contribution to the wider debate on the future of regulation in this sector. Viewed overall, and undoubtedly unintentionally, the response is a relatively powerful argument for structurally independent regulation.”

The SRA’s response to the review called for it to have structural independence on top of the operational independence from the Law Society the regulator currently has.

As we reported yesterday, the chair of the Legal Services Consumer Panel was heavily critical of the Law Society’s proposals, describing them as “staggering”.

Meanwhile, in their joint response to the review, the Chartered Institute of Legal Executives (CILEx) and its regulatory body ILEX Professional Standards (IPS), argued that it is too early to consider introducing a single regulator as the overarching regulatory framework for legal services has not had time to ‘bed in.’

Instead, the Legal Services Board (LSB) needs to operate more like the oversight regulator that was originally intended, and not a market regulator. It should only use its powers if a frontline regulator has behaved unreasonably, rather than just made a decision with which the LSB disagrees. CILEx also said there should be a review of the level at which the LSB approves rule changes.

More broadly CILEx criticised the “highly prescriptive nature” of the Legal Services Act, and said the Law Commission should be asked to review the “maze” of legislation that underpins the system and produces a variety of anomalies that unfairly prejudice chartered legal executives.

CILEx and IPS also said the concept of reserved legal activities should be scrapped. In its place all activities should be regulated for the benefit of the consumer.

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