The Bar Standards Board (BSB) has launched its final scheme for regulating advocacy-focused alternative business structures (ABSs) in what it described as a “declaration of intent” to become the regulator of choice for advocates.
At its monthly meeting last Thursday, the board approved a lengthy consultation which will be sent out this week. It includes details of the entity regulation plans, a new handbook introducing changes to the barristers’ code of conduct, and proposals to allow the conduct of litigation – possibly as early as next January.
In a key relaxation of rules on associations with others and outsourcing, subject to meeting “outcomes-focused provisions”, barristers and authorised entities will be able to share premises or practise in association with anyone, including non-lawyers, with only an obligation to notify the BSB.
The authors of the BSB’s entity regulation strategy decided against adopting a ‘separate business rule’ to protect clients accessing non-regulated services, on the grounds that there were already sufficient safeguards in the new handbook.
The board also approved a separate consultation on a new risk-based supervision and enforcement regime that recommends setting up a central monitoring unit covering entities and chambers. Final appeals against entity licensing and authorisation decisions will be heard by the First-tier Tribunal.
Setting out the litigation requirements, the BSB said barristers of over three years’ call could conduct cases unsupervised as long as they had completed relevant training in litigation and public access work. They would also have to self-certify they had systems in place covering diary and case management and recording, as well as filing, IT and financial management.
The entity regulation proposal is that the BSB should regulate a varie
ty of structures, such as partnerships, limited liability partnerships or companies, all of which could employ lawyers and non-lawyers.
But unlike the Solicitors Regulation Authority regime, external owners who are not also managers of the business will not be permitted. A BSB-regulated entity will have to have at least one barrister manager who is also an owner and a majority of managers will have to have higher rights of audience.
“This is because we are designing a relatively simple and efficient regime for entities that are relatively low risk and/or where the risks posed are similar to those posed in regulating chambers or self-employed barristers,” the paper explained.
Patricia Robertson QC, who has led the BSB’s entity regulation working party, told the board meeting the proposals would, if adopted, have the effect of “introducing new choices for the public about the way they access legal services and new opportunities for the Bar in terms of how they conduct their businesses”.
She continued: “It is also a declaration of intent by the BSB to become the regulator of choice for… advocacy specialists, as long as their business structures fit within the parameters that we’re proposing here.”
Ms Robertson said the BSB’s agenda was essentially “a deregulatory one”. The BSB was removing restrictions on associations, allowing the conduct of litigation, and leaving decisions on how to deliver outcomes on such matters as client confidentiality to “the regulated community”.
But she added: “We are still being prescriptive where we consider that to be justified – the prime example of that is surrounding the duty owed to the court, because that is an example where clarity is paramount.”
She explained that the BSB had been cautious over potentially regulating entities that were 100% externally owned by non-lawyers because “that creates a different set of risks in relation to conflicts between the interests of owners and clients that are more complex to regulate. We are not taking that step at this stage”.
Ms Robertson said she expected the consultation to close by the end of May and proposals would be submitted to the Legal Services Board for approval at the end of July.