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Exclusive: “regulatory system needs to change,” says new minister


Vara: regulatory regime a little bit more complicated than it ought to be

The current system for regulating the legal profession “has to change”, according to new justice minister Shailesh Vara in his first interview since taking office.

Mr Vara, who replaced Helen Grant in October [2], also stressed that raising the small claims limit for personal injury cases remains firmly on the government’s agenda.

The Conservative MP is a former solicitor who practised at City firm CMS Cameron McKenna before focusing on his political career from 2001. His responsibilities at the Ministry of Justice (MoJ) include the courts, legal aid, civil law and justice, legal services and claims management regulation, judicial policy and international business, so he has a lot to get to grips with.

He has already met with the Legal Services Board, Law Society, Bar Council, Solicitors Regulation Authority (SRA) and Chartered Institute of Legal Executives, and without doubt the MoJ’s review of regulation will have been high on all of their agendas.

“The system as it was before when I practised, when the Law Society looked after its own and the Bar Council looked after its own, had to go,” he says. “We now have a new system which has a lot more regulators and is a little bit more complicated than perhaps it ought to be. Somewhere in the middle there is a right fix…

“Where I come from is to recognise that the present regulatory system needs to change. Where that change will be, I don’t know, but I suspect it’s in the middle of where it used to be before [and where we are now]. Middle doesn’t mean exactly middle – it may be a bit more towards one end rather than the other end.”

So, being geographical about it, does that mean he is not interested in solutions which are beyond where we are now – such as the Legal Services Board’s vision of a single regulator? But Mr Vara will not be drawn any further. “My aim is to make sure that the system is such that it’s good for the operators and good for the consumer. What is going to be good for the consumer? Is it nice and simply and easy to manoeuvre around? And is it something that isn’t burdensome for the lawyers?”

He adds: “I’m also mindful that we have a very well respected, world-class legal services [sector] and I want to make sure we continue to attract business from other countries.”

His regulation and civil justice briefs collide at issues such as referral fees and inducements to claim, which were on his agenda to discuss in a meeting with the SRA a few hours after this interview.

Although back in June fellow justice minister Lord McNally suggested in Parliament [3] that the MoJ would revisit the referral fee ban if it looked as though alternative business structures (ABSs) and other arrangements were being used to get around it, Mr Vara is clearly reluctant to give any kind of commitment.

“This is relatively new and people are going to stretch it to the limits, where we have evidence we will come down,” he says. “At the end of the day we are in new territory, the legislation is there, [and] we have made it clear what we want and what we don’t want.”

He conflates the referral fee ban with the issue of offering inducements – banned by the MoJ’s Claims Management Regulator but not by the SRA – but is conscious that the government cannot tell the SRA what to do.

“I know what the MoJ wants both in spirit and in implementation, and I hope that message will be conveyed, but I am mindful that we have a dividing line,” he says.

More generally he is pleased by the AA research which showed that car insurance premiums have fallen £80, and emphasises that the question of raising the small claims limit for personal injury is not off the agenda.

“It is something we are seriously minded to do in due course but when due course happens, I don’t know,” he says.

In the second part of the interview tomorrow, Mr Vara addresses the prospect of a legal aid strike