Time for a new regulatory settlement

Professor Chris Bones is chair of the Chartered Institute of Legal Executives (CILEx)

Bones: This is not the moment for narrow sectional interest to take precedence

The problem with reform based on a compromise with vested interests is that it ends up being more pig’s ear than silk purse and the Legal Services Act 2007 is no exception.

As with many things, COVID-19 has brought its shortcomings into even sharper relief exposing the reality that significant swathes of the population – especially the most vulnerable and disadvantaged – are unwilling or unable to access affordable and effective legal services at a time when they need it the most. Disappointing to say the least given this is explicitly one of the goals of the Act.

No wonder that traffic to the advice pages on Citizens Advice’s website were viewed nearly 16m times during the three months of lockdown, a 24% increase on the same period last year.

The compromise on regulatory reform that the Act represented has proved nothing more than a sticking plaster – the unregulated sector is growing given the regulatory holes that exist, while some of the so-called ‘authorised regulators’ have struggled to separate their regulatory and representative functions.

The “regulatory maze” identified by Sir David Clementi in the report that led to the Act has not been simplified as hoped – it’s just created a different maze.

Professor Stephen Mayson’s recent independent review of legal regulation, Reforming Legal Services: Regulation beyond the echo chambers, shines a welcome spotlight on these and many other shortcomings. It needs the support of all those who want to see a market that is opened up to full competition, which we believe is in the best interests of consumers, improving access to justice for all.

His core recommendation that regulation should cover all providers of legal services, whether legally qualified or not, is hard to dispute – why should different people providing the same service be subject to different or, in some cases, no regulation? This puts the focus of regulation on what you do, and the risk to the public interest in doing it, rather than with whom you qualified.

We at CILEx are all too familiar with the anomalies of a regime built on a 19th century social hierarchy.

Whilst our Fellows have equivalence in statute with solicitors and barristers in their specialism, and the number of CILEx judges is now in double figures, we still hear professionals in the other groups argue that we are not ‘proper lawyers’.

We also continue to face barriers created by poor drafting of the original reforms. A good example is the legislative anachronism that means whilst CILEx lawyers can create powers of attorney, they cannot certify their copies.

Professor Mayson’s approach would see legal services opened up to a wider range of service providers, broadening the options available, creating a more diverse and dynamic market, and enhancing consumer choice.

As a consumer, your first priority is reassurance that the provider knows what they are doing; at the moment, that can come from a professional title where experience of a specialist area may or may not be guaranteed.

None of us would be too happy with an eye surgeon offering to conduct heart surgery. In the same way we believe that a conveyancer should not handle an international corporate merger. Today, not only does the system allow this to happen, but the vagaries of the reserved legal activities also mean that my hairdresser could do the merger.

Professor Mayson also envisages the regulation of technology delivering legal services. We want to encourage technology as a way to fill the access gap, but currently regulators can only hold the writer of an algorithm to account where they are a member of an associated professional body, or if it is used by a firm they oversee.

The current move into technology intermediated services therefore could come at a risk to consumers in areas where the impact could be traumatic. This in itself is argument enough for change to an activity-based model.

Perhaps unsurprisingly, both the Bar Council and the Law Society have reacted with long-established mantras about now not being the time for change. We see things differently.

As consumers are showing significant shifts in their behaviour, we think there is no greater need for change than now. This is not the moment for narrow sectional interest to take precedence over the need to complete the work to achieve our shared goals of equity of access to justice and effective legal redress.

We appreciate Professor Mayson’s emphasis on improving clarity around and independence of regulation: we have consistently advocated a greater degree of regulatory independence than that currently permitted in legislation and have committed ourselves to ensuring that CILEx Regulation is as separate and independent as is possible within the confines of the 2007 Act.

The report states: “If too much of that previous normal is fixed in statute, with its associated assumptions, circumstances and expected consequences, regulatory powers can be frozen in time. They are anchored to the wrong circumstances.”

CILEx lawyers are a classic example. The failure to amend statute comprehensively in 2007 and the continuation of title-based regulatory structures leaves them in an uncomfortable limbo where they are often unable to provide services for which they are fully qualified.

A system that disenfranchises thousands of fully trained lawyers is acting directly against the public interest, not just for consumers in that it reduces the market, but also for our fellow citizens looking for careers in the law.

The continuing insistence on professional differentiation based on whether or not a lawyer has qualified through academic study, or through learning on the job is entirely inappropriate in a modern society.

The impact of it goes far wider than intra-professional jealousies; often excluding lawyers from diverse social backgrounds and ethnic communities from being able to practice, despite being every bit as able as their differently qualified equivalents, with knock-on effects throughout the legal system, including the judiciary.

In welcoming these proposals for reform, CILEx recognises that there is far more to be gained for society as a whole from engaging constructively with these new and important proposals and much to be lost if perceived self-importance is allowed to stand in the way.

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