Kenny: redress “safety net” will enable innovation and access to justice

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19 November 2014

Kenny: single regulator a decade away

Chris Kenny, the outgoing chief executive of the Legal Services Board (LSB), yesterday called on legal regulators to implement a “trade off” between access to the law and quality of service, with a “safety net” of easy redress when things go wrong.

Speaking at the Legal Futures conference in London, Mr Kenny, who leaves his post next week, also added to the clamour for a single legal regulator, when he said the case for it was “unarguable”.

The single body would be neither the LSB nor the Solicitors Regulation Authority (SRA), he predicted.

In a session on the Legal Services Consumer Panel’s report on legal services in 2020, published yesterday, Mr Kenny debated with Craig Holt, the former chairman of QualitySolicitors who is to become chief executive of LegalZoom’s UK arm, the panel’s chair, Elisabeth Davies, and Crispin Passmore, head of policy at the Solicitors Regulation Authority.

Controversially, Mr Kenny suggested regulators had to tackle the issue of “levelling down” from the ideal that “the only way to protect people is to have [eminent barristers] being the only people who provide legal advice to anybody because they are safe”.

He said regulators had to consider “trade offs” that meant access to cheaper services “at a cost of potentially not quite the absolute level of certainty that you might want in every single case”. This would mean prioritising access to law “rather than hitting every new provider with the full panoply of every bit of regulation imaginable”, while providing a “cheap and cheerful” means of redress in the event that “somebody screws up”.

In order to avoid “squeezing out innovation and reducing access to the market”, regulators could “remove some of the obstacles to allow people to experiment and do things differently… the question is what kind of safety net do you put in place to catch those consumers who do lose out. I think you can do that by better redress rather than huge additions to the regulatory rulebook”.

Mr Holt criticised the panel’s report for what he charged was a failure to acknowledge the scope of the “market failure” in legal services and being insufficiently radical. He said: “The report… in my view woefully underplays the extent to which the market fails to set the society as a whole…

“As a spur to regulators it’s a bit soft and really needs to be saying ‘look this market is hopeless for the general population, people just aren’t engaging with legal services’… Someone should be coming in and saying ‘no, we need a very big shake up, not just a few nudges towards reform’”.

Mr Passmore observed what he called “fragmentation and segmentation” in the market. He said lawyers may or may not be involved in a solution to the “issues” facing individuals and business: “We’ve got to try and think about all the products that can help consumers tackle the issues that they’ve got.

“For regulators that means the SRA thinking less about how do we regulate solicitors and more about how we regulate the legal market, and that means thinking more and more about the interplay between those services that have to be regulated and those that don’t have to be regulated.”

Ms Davies defended the panel’s report, saying there were “very strong” messages in it, for instance “around understanding the needs of different consumers… around tailoring resources to those who need them most”. Viewing legal services holistically meant “looking at regulation in the context of raising standards and protecting consumers and that’s about a whole variety of different players… once you start looking at the whole you have a variety of different options that lead you to quality, access to justice and protecting consumers.”

Mr Kenny echoed the view of the LSB’s former chairman, David Edmonds, and senior judges, that there should be a single legal regulator. But he doubted it would happen quickly and suspected it could be “a decade away”.

He added that in his personal view he felt Mr Edmonds had “understated rather than overstated the case for it” in his farewell speech, continuing: “There are three reasons to regulate a market. The first is public interest and you can regulate it in 10 different ways if you must… Then there are consumer protection reasons and you can regulate those in 10 different ways if you must.

“[Finally] there are all the issues about innovation, creativity, flexibility, and value, and you can’t do that in 10 different ways because the fact that you do it in 10 different ways is part of the problem, not the solution. If you want a market that really works well for business and for the bulk of the population, ultimately you need a single body.”

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