House of Lords gives Legal Services Board a bashing

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4 December 2012

House of Lords: regulatory framework still in its infancy

The Legal Services Board (LSB) came under fire for “mission creep” in the House of Lords last night.

In a debate initiated by Bar Standards Board chair Baroness Deech, who reiterated many of her board’s criticisms, several lawyer peers accused the LSB of going further than the oversight role envisaged for it in the Legal Services Act 2007.

Barrister Lord Faulks accused the LSB of having “very significant regulatory ambitions” but at the same time demonstrating “very little understanding of the way barristers actually practise” – such as in the requirement that barristers inform clients at the point of instruction of their right to complain, which showed “an insensitivity of the circumstances in which a client sees a barrister”.

Conservative Lord Gold, former senior partner of City firm Herbert Smith, expressed disappointment that attempts to find a better balance between the frontline regulators and the LSB have not borne fruit. “I understand there has been considerable dialogue between the LSB and the regulators and that little progress has been achieved. That is unfortunate and harmful to the legal profession and the administration of justice.

“Under the circumstances something more is needed; it has been suggested that even late on there should be post-legislative scrutiny of the effectiveness of the Legal Services Act in order to test whether the original objectives have been achieved. I suggest to the minister that this is something that should now be looked at seriously.” The suggestion was supported by former Conservative Lord Chancellor Lord Mackay.

Lord Goldsmith, who was Attorney General in the Labour government when the Act was passed, also called for a review, saying he had “a growing concern about whether the Legal Services Board is micromanaging and suffering from mission creep, which is almost inevitable whenever a body is set up”.

He explained: “We [the then government] tried to make clear to both sides of the legal profession, and indeed to the other legal bodies, that the Legal Services Board was not going to be an alternative regulator. It was to be an oversight regulator which had to be there as a backstop in case the regulators themselves… were not doing their job.

Non-lawyer Lord Hunt of Kings Heath sought to put the LSB’s side. “We should recognise the progress made by the board under the chairmanship of David Edmonds,” he said. He also suggested that it would be better if post-legislative scrutiny coincided with the next triennial review of the LSB in 2015.

Speaking for the government, Lord Ahmad of Wimbledon argued that “it is clear that there has been a real need for an oversight regulator to drive the reforms set out in the Act. In doing so, it has fulfilled the important role that only an oversight regulator could have. Those who responded to the triennial review [earlier this year] recognised the value it has brought”.

Lord Ahmad said the LSB’s draft business plan for 2013-14 will deal with issues such as the approach to requests for changes to regulatory arrangements and the cost of regulation.

“Various issues and questions have been raised in terms of accountability and the post-legislative review. We are confident that for the here and now, the regulation of legal services is appropriate, but that does not mean it will remain so indefinitely. Given that the new regulatory framework was implemented only in 2010, we still believe that it is in its infancy.

“The next triennial review is due in 2015 and will provide another opportunity to assess how the regulatory framework is performing and whether the LSB’s functions are still needed in an evolved legal services market.”



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Legal Futures Blog

How best to achieve independent regulation under the Legal Services Act?

Craig Wakeford LSB

Independent regulation gives confidence to consumers, providers, investors and society as a whole that legal services work in the public interest and support the rule of law. The Legal Services Act 2007 does not require all approved regulators to be structurally separate from representative bodies. Instead, the Legal Services Board is required by the Act to produce internal governance rules (IGR) which apply the principle of regulatory independence in legal service regulation. We are currently running a consultation on the IGR which continues until 9 February.

January 19th, 2018