Covid-19 could herald reform of reserved legal activities

Pitt the Younger: The source of the conveyancing monopoly

Changes to the list of reserved activities that only authorised lawyers can do has been floated as one way the ways legal regulation could be flexed to help the profession recover from the Covid-19 crisis.

If taken forward, the suggestion by the Legal Services Board (LSB) could change parts of the market radically.

The Legal Services Act 2007 provides for six reserved legal activities: the exercise of rights of audience; the conduct of litigation; reserved instrument activities (that is, dealing with the transfer of land or property under specific legal provisions); probate activities; notarial activities; and the administration of oaths.

Back in 2013, the then Lord Chancellor, Chris Grayling, rejected the LSB’s recommendation to add will-writing to the list.

Under section 24 of the Act, the LSB can recommend adding to the list, and under section 26 removing existing areas.

A paper to last week’s meeting of the LSB on its strategic action plan to help the sector recover from Covid-19 said one medium-term action the oversight regulator could consider was whether the “levers” provided in the Act could be used to assist in recovery of the sector.

“One such way this could be achieved would be through use of s24 of the Act to make a recommendation for alteration of the reserved legal activities.

“In our business plan consultation response document, we noted consensus that the reserved activities do not reflect areas of greatest risk and explained that if major legislative reform is not contemplated, it may be timely to use existing powers to recommend to the Lord Chancellor changes to the list of reserved activities.

“The board is due to receive a paper on this subject in June.

“The aim of this proposed action is to make best use of the Act to aid sector recovery by creating a more liberal, flexible, risk-based regulatory framework. Levers other than a s24 recommendation should also be identified and considered.”

The activities have been under scrutiny for a long time, given their questionable historic basis – research by Professor Stephen Mayson found that in 1804 Prime Minister William Pitt the Younger wanted to raise taxes on articles of clerkship and practising fees, and offered lawyers a conveyancing monopoly (covered by reserved instrument activity) in return.

In 2016, the LSB’s vision for legislative reform said regulation should be targeted at the particular risks to the public interest, meaning that the list of reserved legal activities needed to be revisited.

Professor Mayson’s upcoming final report from his independent review of legal services regulation is also likely to recommend a move away from the current reserved activities.

However, with legislative reform unlikely at the moment even without the coronavirus crisis, the government has encouraged the LSB to use the powers it already has to sharpen the regulatory regime.

More broadly, the paper before the LSB said recovery of the sector should be focused on the public interest and the interests of consumers.

“For example, the current situation presents some clear and present risks to consumers that will need to be managed. At the same time, the sector is showing its agility and finding new and innovative ways of reaching consumers and providing services.

“The disruption should also therefore present opportunities to develop and embed new and innovative ways of working in the longer term that could help to address unmet legal need.

“There is a role for the LSB to make certain that stakeholders all turn their attention to viewing recovery not just through the lens of the legal services businesses who they quite understandably want to support at this time, but rather, through the lens of consumers and the ways of working that best suit their needs going forwards. The legal market could look very different as it emerges from Covid-19.”

Areas of immediate focus for the LSB include the operational and financial resilience of regulatory bodies, and slowdowns or halting of operations of complaints and disciplinary processes.

The LSB is also developing a fast-track approvals mechanism for changes to regulatory arrangements that may become necessary as a result of Covid-19.

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