BSB performance in the red as LSB raises SRA enforcement concerns

Nichols: Areas for improvement

Pressure on the Bar Standards Board (BSB) to improve its performance ratcheted up today after it scored by far the worst of all the legal regulators in the Legal Services Board’s (LSB) annual assessment.

The analysis also highlighted concerns over how the Solicitors Regulation Authority is handling complaints about both solicitors and its own service.

The eight legal regulators are assessed against the same five standards: regulatory approach, authorisation, supervision, enforcement, and ‘well-led’ (governance).

Under a new system, they are rated as providing either ‘sufficient’, ‘partial’ or ‘insufficient’ assurance that they are meeting the LSB’s requirements on each, using traffic light ratings.

The Costs Lawyer Standards Board – the smallest of all the regulators – was the only one to score green on all five, followed by the SRA and Institute of Chartered Accountants in England and Wales (for its work regulating probate work) with four.

The BSB was the only regulator to receive red ratings – two of them, in fact, in relation to ‘well-led’ and enforcement. It also scored yellow on the other three.

We reported last month that the LSB has begun talking about taking formal action against the BSB over shortcomings in its performance.

Whilst acknowledging that the BSB had taken some steps to improve, the LSB said it was “concerned that the underlying performance issues are not improving and in some areas are further deteriorating”.

It continued: “In addition, the BSB has yet to adequately address the operational challenges in respect of its enforcement activities which are significant, longstanding, and an aspect of a regulator’s performance that most directly impacts consumers and the wider public.

“The BSB must now fully engage with and accept the reasons for its underperformance and seize the opportunity to take ownership of the scale of concerns and the scope of improvement needed.

“We are hoping to see evidence of a determination to drive the step change in culture, capability and performance required for the BSB to become an effective regulator.”

The BSB is due to supply the LSB with an action plan to achieve this by the end of this month.

It was on enforcement that the LSB had concerns with the SRA. The assessment said: “We consider that it has not provided us with sufficient assurance about the quality of its handling of complaints about solicitors and how it is seeking to improve its performance in handling them.

“During the year, concerns about the SRA’s complaints-handling processes have been brought to our attention by members of the public and we are currently engaging with the SRA to determine the extent to which there are systemic problems with its complaints-handling approach…

“We also need to see further progress from the SRA in reducing its backlog of long-term cases and increasing its capacity and capability in handling them.”

However, the LSB considered overall the SRA to be “a well-run regulator with a proactive and effective regulatory approach”.

It explained: “Over the past year, it has responded to changes in regulatory policy and the regulatory environment, such as the introduction of the Russian sanctions regime, has learned lessons from its work and sought to improve how it regulates…

“While we have identified concerns about aspects of the SRA’s enforcement work… we consider that it has the capability and capacity to promptly address these ahead of our next assessment of its performance.”

It added that this year the LSB would be reviewing all of the regulatory bodies’ disciplinary and enforcement processes.

CILEx Regulation had three green ratings and two yellow, with the other regulators all scoring two greens and three yellows. Well-led and regulatory approach were the areas with the fewest number of greens.

The LSB identified a need for a number of regulators “to increase transparency, particularly in respect of their decision-making processes”. Some had the policies but did not apply them properly.

“In particular, for many regulators, it is difficult, from published information, to understand what decisions are being made and what is taken into account in making decisions. Transparency is an important characteristic of a well-led and accountable regulator.”

Legal Futures and the Law Society Gazette last year jointly raised the issue of access to SRA board meetings under this head.

The LSB said: “During the past year some stakeholders have told us that they consider the SRA could be more transparent, particularly as it no longer holds public board meetings. While this is a matter for the SRA, we will monitor how it responds to these concerns.”

Since airing our concerns, the SRA has now introduced press briefings after each board meeting.

The LSB also said some regulatory bodies “could do more to provide assurance that they have the right resources, capability and capacity to carry out their functions”, while there was “scope for some regulatory bodies to take a more proactive approach to supervision”.

Chris Nichols, the LSB’s director of policy and regulation at Legal Services Board, said: “Overall, we have seen welcome improvement in some areas from most of them, and there are some examples of good practice for everyone to learn from and build on. However, there continue to be areas where further improvement is needed.

“We expect regulators to operate transparently and ensure they have a sufficiently robust evidence base for their work.

“This is central to being a well-led organisation and ensures others, including the public, can understand how decisions are made and hold the regulator to account. For a number of regulators there is more work to do in this regard.”

Speaking at a press briefing yesterday, he added that the BSB’s problems “should not be insurmountable or intractable” and it could yet turn itself around – as the Costs Lawyer Standards Board had done, having been the worst performer a few years ago.

He added: “I have no doubt that our oversight and shining a light on that was a crucial element in turning that around.”

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