Government eyes regulating the law’s unregulated providers

Rowlinson: Current distinction does not make sense

The Ministry of Justice (MoJ) is considering whether to create a register of unregulated providers of legal services and give their clients access to redress if things go wrong, it emerged yesterday.

Peter Rowlinson, head of UK legal services policy at the MoJ, said “it doesn’t seem to make sense at a fundamental level” that while the client of a lawyer advising on a will, for example, had the protection of regulation, indemnity insurance and access to the Legal Ombudsman, the client of an unregulated provider did not.

The suggestions of a register and expanding redress were short-term fixes proposed by Professor Stephen Mayson in June in his independent review of legal services regulation, in which he highlighted how the public did not generally understand the difference between regulated and unregulated providers.

This review also proposed a longer-term radical rewrite of legal regulation, moving to regulation of services rather than lawyers, with all providers, whether legally qualified or not, registered and regulated by a single regulator.

However, speaking with Mr Rowlinson, Clare Hayes, deputy director of UK legal services & innovation at the MoJ a virtual event run by the Westminster Legal Policy Forum, said she agreed with Professor Mayson that this was “not something to be contemplating right now”.

She continued: “In current circumstances, we need to avoid further substantial disruption of the structure of regulated legal services.”

In May, justice minister Alex Chalk said the MoJ was not contemplating a review of the Legal Services Act 2007.

But the proposals on unregulated providers were “really interesting”, Ms Hayes said.

She said there were potential gains from increased consumer protection, confidence and engagement, as well as more investment and innovation.

“Could an extension of regulation improve levels of trust and quality in the sector? Could that be for both individual consumers and businesses? We do in the round think there is potential for the greater use of legal services.”

But there were “real risks and potential costs” to be weighed in the balance, such as how it would be paid for, and whether it could create barriers to entering the market, to the detriment of access to justice.

Ms Hayes concluded by asking delegates and others for their views on whether this was “the right place to focus our energies”.

Earlier in the event, Professor Mayson said he did not make his short-term recommendations “because the unregulated wanted to be regulated. I made them because in my view the public interest – and particularly the need to protect consumers – should require regulation”.

He continued: “In both the short and longer term, the proposals for registration and access to redress in respect of previously unregulatable providers would also liberate consumers from the lottery of current regulatory scope and protection.

“They would give all consumers of legal services the confidence to instruct providers secure in the knowledge that the incompetent, the shoddy, the dabblers and the charlatans could be rooted out and dealt with, and that sector-specific redress would be available.”

When asked about regulating the currently unregulated during a separate session, Legal Services Board chief executive Matthew Hill pointed to the model of the Professional Standards Authority.

This independently assesses and accredits a wide range of organisations that register unregulated healthcare practitioners, ranging from psychotherapists and acupuncturists, to play therapists and aromatherapists.

“The [authority] will tell you there is benefit in having those professions regulated under one roof,” he said, adding that it “would be worth having a look” at whether the model was transferable to legal services.

In June, we revealed that Legal Services Board is set to conduct a major review on the extent to which it can reform the regulatory regime – including the reserved legal activities – using its existing powers given the lack of government will for more radical reform.

Back in 2013, the then Lord Chancellor, Chris Grayling, rejected the board’s recommendation to add will-writing to the list of reserved activities when the arguments were much the same as those highlighted by Mr Rowlinson.

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