There should be a two-tier system of legal regulation that distinguishes between those branches of the profession that hold client money and those that do not, the chairman of the Costs Lawyer Standards Board (CLSB) has argued.
Steve Winfield said ‘low-risk’ professions – such as costs lawyers, notaries, and trade mark and patent attorneys – should be subject to a “reduced regulatory structure”.
Addressing the annual conference of the Association of Costs Lawyers on Saturday, Mr Winfield said his call was based “on our own analysis of risk across the legal professions. This evidenced, not surprisingly, that those legal professions that handle client monies are the greater risk in terms of both complaints generated and real financial loss to consumers”.
Last week the CLSB was criticised by the Legal Services Board over its performance in areas such as understanding of the needs of costs lawyers’ ‘consumers’, inadequate supervision of costs lawyers, and a failure to collect first-tier complaints data.
Mr Winfield told the conference: “It is fair to summarise that they have few issues with how well we do what we do, but that they consider that we are not doing enough…
“In spite of four years of statistics gathered through the Legal Ombudsman and the CLSB, which support our view that the costs lawyer profession is low risk to the consumer, the Legal Services Board has stated that they do not accept that the profession is low risk. We will be seeking to discuss this difference of opinion so that we can better understand how they have arrived at their risk profile for the profession.
“Let me stress that I am not standing here today to rebuke the whole assessment. There are a number of valid findings and we are working with the Legal Services Board to agree an action plan to ensure that the CLSB’s regulatory regime more closely meets the expectations of the LSB.”
He also noted that other work by the Legal Services Board has shown high levels of satisfaction with the regulator among costs lawyers, and that the CLSB had reduced the unit cost of regulation – costs lawyers pay £250 a year for their practising certificates.
Mr Winfield added: “When or whether there will be any review of regulation under the Legal Services Act 2007 is unknown to us right now. However, we hope there will be, and very soon.
“Why? Well, we find ourselves in a challenging environment and in the middle of conflicting expectations. The Legal Services Board continues to demand more and more year on year, and have sent a clear message recently that there is no room for negotiation on what they expect us to deliver. Yet, at the same time, the government has launched initiatives to deliver de-regulation and reduced regulatory cost.”