ABSs to undergo scrutiny of Cabinet committee aiming to slash regulation

A new Cabinet committee is to review whether the Office for Legal Complaints (OLC) and alternative business structures (ABSs) should be implemented, it emerged yesterday.

The news comes as The Times speculated today that the new team at the Ministry of Justice might kick ABSs into the long grass, but investigations by Legal Futures indicate that there is no foundation for this.

The first step of the reducing regulation committee, chaired by business secretary Vince Cable, will be an immediate review of all regulation in the pipeline for implementation which has been inherited from the last government. This is based on the ‘Forward regulatory programme’ published before the election in March by the Better Regulation Executive. Its list of 200 measures across government included the Office for Legal Complaints and ABSs.

The committee will stress-test the regulatory proposals in the list to ensure “that only those of suitably high quality (for example meeting good regulation principles) and suitably high priority proceed”.

It will also introduce a “one-in, one-out” approach, which would make sure that new regulatory burdens on business are only brought in when reductions can be made to existing regulation. Mr Cable said: “The deluge of new regulations has been choking off enterprise for too long. We must move away from the view that the only way to solve problems is to regulate.”

A Ministry of Justice spokesman told Legal Futures that it would provide all information requested to help evaluate the OLC and ABSs. The OLC is currently slated to open in October, with ABSs due to begin a year later.

The article in today’s Times said there were rumours that the new government does not share its predecessor’s determination to rush towards reform of the legal system and that Jonathan Djanogly (pictured), the minister with responsibility for implementing the Legal Services Act 2007, “is not enthusiastic about the philosophy behind ABSs and external investment”.

There were no sources attributed to these comments and Legal Futures was told today by a senior non-government source who has met Mr Djanogly since taking office that, in fact, he is supportive of ABSs. Other senior figures we spoke to had also received no indication that such a step was being considered.

Were there to be any move to slow down the introduction of ABSs, we understand that the most likely method would be for the government to withhold approval from or even reject the Legal Services Board’s recommendations that certain regulators – likely to be initially the Solicitors Regulation Authority and Council for Licensed Conveyancers – are fit to hand out ABS licences.

It was suggested by one source that the new government may be more rigorous in testing the board’s recommendations about ABS licensing authorities and that this could inadvertently cause the 6 October 2011 date to slip.

Like other media outlets, Legal Futures has requested interviews with Mr Djanogly and Lord Chancellor Ken Clarke, but as yet they have not given policy-related interviews to anyone while they get on top of their briefs and prepare for the upcoming emergency Budget.


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