The Law Society has told MPs that plans to give the Solicitors Regulation Authority (SRA) and other regulators full independence should be shelved because of the uncertainty caused by the EU Referendum.
At an evidence session on the legal regulatory regime before the justice select committee this morning, the Law Society and SRA also clashed on the former’s bid to take over control of setting professional standards.
In last November’s Autumn Statement, Chancellor George Osborne announced plans to separate the frontline regulators from representative bodies, and a consultation on this was expected after the referendum.
The Law Society opposes this – in part because of the potential effect on its income – and Law Society chief executive Catherine Dixon said that any review should be “holistic” across the entire regulatory regime, and not just about separation, continuing that this would be the wrong time to do it.
She told the committee: “Clearly the government, the public, the legal profession and its clients are going through a period of unprecedented change and I would question whether now is the right time.”
SRA chief executive Paul Philip said public perception that the SRA was not independent from the profession was the reason separation was needed. Consumers were concerned that being part of the Law Society meant the SRA would protect solicitors and that they would not get a fair hearing.
Ms Dixon said this confusion could be dealt with through public legal education. “It strikes me that it would be a sledgehammer to crack a nut to go through a complex process of rewriting primary legislation to deal with an issue of perception when we know that regulation is independent,” she said.
She then reiterated the society’s argument that the current definition of legal services was “too broad” and that setting professional standards, along with entry to the profession, “should be sitting with the profession so they can be owned and driven to a higher level of standard than [if they were] sitting with a lay regulator”.
Mr Philip insisted that the standards the public can expect of a lawyer – such as independence, integrity, confidentiality, maintaining high standards of work and upholding the rule of law – “must be owned by the regulator… To give [them] to the body that represents solicitor would appear to be conflict of interest”.
He added that these were more than professional standards – they were legislative standards, contained in section 1(3) of Legal Services Act 2007.
Ms Dixon argued that “any conflict can be managed”, pointing to chartered accountants, who have a similar set-up to that proposed by the society.
However, Mr Philip countered that independent regulation was the “norm” in most professions, such as pharmacists, doctors and architects.
There was a similar, if less debated, divergence of view between the other two witnesses before the committee, Bar Council chairman Chantal-Aimée Doerries QC and Bar Standards Board director Dr Vanessa Davies.
Ms Dorries said that the current set-up worked well, but Dr Davies agreed with Mr Philip that “those problems of perception do need attending to… We broadly speaking would be in favour of separation”.
Ms Dixon and Ms Dorries also hit out at the Legal Services Board (LSB) for, they said, overstepping its remit. Ms Dixon complained that work the LSB was doing on the unregulated part of the legal market was being funded by the regulated sector, while Ms Dorries objected to the oversight regulator interfering in areas that were more appropriate for the representative body to address, such as the cab-rank rule and equality and diversity.
However, Ms Dorries added: “We do support the LSB’s intention to improve scrutiny of regulatory costs.”
Responding to a question from barrister Alex Chalk, the Conservative MP for Cheltenham, Mr Philip said there had been no evidence to bear out any of the ethical concerns that surrounded the concept of alternative business structures when they were first mooted.
Ms Dixon added that the society still heard such concerns internationally and that it was keen to do some “myth busting”.