Consolidation of legal regulators “may be a good thing”


Chambers:

Consolidation of legal regulators “may be a good thing” if designed to achieve “the pulling together of knowledge, lessons, consumer research and engagement”, the Legal Services Consumer Panel has said.

Though much of this could be achieved within the existing framework through effective collaboration between regulators, without formally merging, the panel said it had been “disappointed by the quality and depth of collaboration that has been achieved to date”.

In its response to CILEX’s consultation on changing its regulator to the Solicitors Regulation Authority (SRA), panel chair Sarah Chambers it had “no objection in principle” to the re-delegation of regulatory responsibility to another regulator, if this delivered effective regulation for the benefit of consumers, the public and the profession.

She said the panel had in the past raised “numerous concerns about the thinness of resources of some of the smaller regulators and the difficulties this poses for delivering basic regulatory functions and in particular for commissioning consumer research”.

This meant consolidation “may be a good thing” given the failure of regulators to collaborate properly to date.

She went on: “Modern regulators must be ready to address, strategise and react to new challenges which require agility and adequate resources. Regulators with limited resources will increasingly struggle to meet these demands, and in turn struggle to respond to consumers’ needs.

“Nevertheless, proposals for merging regulators must take care to ensure that the smaller professional communities are not ignored in favour of the larger ones. We have not seen evidence of how this risk would be mitigated.”

The panel also agreed that the current regulatory framework was “overly complex”, requiring a level of knowledge that was unrealistic for consumers to have or comprehend, even after it has been explained to them.

“Consolidation of regulators could well deliver better consumer understanding,” Ms Chambers said.

However, she said the panel was not yet in a position to express an opinion on CILEX’s proposed move because it considered the evidence and analysis of the impact on consumers provided by CILEX so far did not allow it to make “an informed decision”.

There also needed to be detailed risk and equality impact assessments, as well as a clear plan for monitoring and evaluation, she added.

She noted that the panel, as a statutory consultee, would have a further opportunity to express its opinion should the process lead to CILEX making a formal application to the Legal Services Board to change regulator.

Meanwhile, the Law Society has reiterated its opposition to the CILEX proposal in its response to the SRA’s consultation on how it could work.

It questioned the SRA’s statement that it did not expect regulating chartered legal executive to “affect the identity of the solicitors’ profession or the way it is regulated”.

The Law Society said: “We have concerns about the risk to the reputation of the SRA and a loss of confidence in its regulatory capacity due to a real or perceived lack of partiality towards inevitable competition between the professions represented by the Law Society and CILEX.

“As a regulatory body placed between the two professional bodies, the SRA will effectively be given the power of adjudicating any disagreements between them regarding regulatory matters.

“This will inevitably interfere with the independence of the solicitor profession and our ability to represent it in respect of regulatory issues, since the views of CILEX would have to be taken into consideration.”

In a wide-ranging critique, the Law Society said the proposals would reduce competition through “greater homogenisation” and also have the potential “to result in higher and possibly unnecessary regulatory standards, regulatory burdens, and cost for legal executives”.

In its response to CILEX’s consultation earlier this month, the society said the move risked confusing consumers and appeared driven by looking to raise the status of CILEX lawyers to be on a par as solicitors or barristers.




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