Let battle commence: regulatory independence consultation set for publication

How the Law Society and SRA discussions over independence may look

How the Law Society and SRA discussions over independence may look

The battle for the future of legal regulation is set to move into high gear next week with publication of the government consultation on making regulators such as the Solicitors Regulation Authority (SRA) and Bar Standards Board fully independent of the representative bodies which technically oversee them.

This week’s Budget mentioned that the consultation flagged up in November’s Autumn Statement would be published “shortly”.

The Ministry of Justice today would not confirm whether it would happen by next Thursday, when the government goes into lockdown, known as purdah, ahead of May’s local elections. However, it is expected by then.

After the local election purdah, there will be a short window before purdah resumes for the EU referendum.

The Budget focused on the reforms to the licensing of alternative business structures. It said that to encourage “competitive pricing” in the legal market, the consultation would look at “how to reduce regulatory barriers so that new providers can provide legal advice”.

It is not certain whether these will be the relatively minor changes proposed by the legal regulators themselves last year, or go further.

The Law Society and SRA have been locked in an escalating war of words in recent months.

The debate is not over whether the SRA should be structurally independent from Chancery Lane, but what functions they would have under a new settlement.

Law Society chief executive Catherine Dixon said this week: “To protect purchasers of legal services, create a level playing field for fair competition and reduce the regulatory burden, regulation should focus on providing consistent regulatory rules for legal services providers.

“The profession should then take responsibility and ownership for setting professional standards, entry into their profession and awarding the professional title of solicitor, as they know what good looks like and are committed to providing high standards of service for clients.”

The SRA argues that it should retain all of its current functions. Speaking recently, chief executive Paul Philip said that “if solicitors set their own standards, it is essentially marking their own homework. We think in order to bolster public credibility the people who set the standards have to be independent of the representative body and be independent of government. Setting standards is the role of the regulator”.

Bubbling under the debate over the principles is access to the practising fees. Under the Legal Services Act 2007, the Law Society – and other representative bodies such as the Bar Council – can use practising fees to levy their communities for non-regulatory activities deemed to be in the public interest, such as law reform work.

In the current practising year, the Law Society took £35m – around a third of all practising fees gathered – to fund its work. The SRA says that under the new arrangements, this should not continue.

The Ministry of Justice recently told Legal Futures that making regulators independent “should reduce lawyers’ practising fees in some cases”, which hints that it is siding with the SRA.

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