The Bar Council and Law Society have attacked proposed Legal Services Board (LSB) changes to way it assesses frontline regulators’ performance, saying it could change the focus of both the regulators themselves and the LSB.
The Law Society warned the LSB not to “delegate its oversight responsibility” to the Solicitors Regulation Authority (SRA) until the regulator was operating effectively.
The LSB consultation outlined a revised framework against which it would assess regulators’ performance, along with changes to how it gained assurance from regulators of their performance against it.
It proposed that regulators would provide the LSB with evidence to give assurance of how they were meeting the standards, putting “greater emphasis” on their boards “to ensure that they are well-led bodies with appropriate governance in place”.
The Bar Council said this approach would remove “the standards that state the core regulatory functions” of authorisation, supervision and enforcement in a “fundamental change that goes to the heart of the role of a frontline regulator”.
They would be replaced by two “vague standards that do not have an appropriate regulatory focus” – the first being operational delivery, the second an effective approach to regulation.
The way they were expressed would “reduce the proportion of the frontline regulators’ time and resources spent on properly regulatory functions”, the Bar Council said.
Included in them was a “draconian power” to demand from frontline regulators responses to enquiries and investigations on a thematic basis.
The Bar Council said that, when combined with the wide-ranging nature of the new standards, this power could be “unpredictable and potentially oppressive in nature”.
The LSB appeared to be “taking a quasi-governance role over the frontline regulators, essentially placing it in the role of a non-executive board, rather than its proper role as exercising oversight, at a distance”.
The Bar Council said the need for “this revolution” was not identified clearly.
As to the timing, the LSB’s new performance assessment regime was implemented in 2019, just before the pandemic, “one of the biggest shocks felt by regulators and the regulated probably since the Second World War”.
The Bar Council said that “in no way” could the period from 2019 to 2022 be regarded as “ordinary conditions” for the performance framework to be assessed, and there was “no adequate evidence base” on which to understand how well it was working.
The LSB’s performance framework consultation was “part of a drift” away from its “proper statutory functions”.
The Law Society said it too was concerned by the LSB’s move “away from an oversight role towards an assurance role” in its assessment of regulatory performance.
The society called on the LSB to “think very seriously before proposing a significant shift towards more minimal oversight of the regulators’ activities”, which may result in the SRA being less accountable for its performance than is currently the case.
“The proposals appear to be moving towards a form of self-certification, and the society would caution against a performance assessment framework that is effectively a box-ticking exercise for regulators.”
The society said many of the profession’s concerns about the SRA related to the way in which regulatory operations were conducted, such as delays in the investigation of disciplinary matters and incurring excessive costs, for example in the Beckwith case.
“Given the current climate affecting the rule of law and perceptions of the legal profession in defending it, it is particularly important that there is a clear, transparent and accountable regulatory framework underpinning the delivery of legal services.
“The society’s view is that the LSB should not delegate its oversight responsibility to the SRA until such time as the SRA itself clearly demonstrates it is operating really effectively.”