The Bar Standards Board (BSB) places “a disproportionate weight on the impact of its work on the profession” and pays insufficient regard to the impact on the public, the Legal Services Board said today.
A review – which the BSB initially resisted – found shortcomings in its governance in relation to the decisions to withdraw funding from the Legal Choices website, to develop its public legal education (PLE) activities, to introduce transparency standards, and to modernise its regulatory decision-making.
The review of whether the BSB was meeting the ‘well-led’ performance standard set by the LSB was launched in April 2020 because of the controversial Legal Choices decision, which the LSB said raised concerns over whether the regulator was making “sound decisions”.
The BSB decided to stop funding Legal Choices, the consumer-facing website helping consumers to identify their legal needs and navigate the sector, saying it could best meet its aims to offer the public information about how to get legal help from barristers via its own website.
Set up in 2012, until November 2019 it was collectively run and paid for by all the legal regulators.
In a report issued today, the review found “little evidence” of meaningful consideration of relevant regulatory objectives when decisions were taken, and that the BSB “allowed the interests of the public and consumers to be outweighed unduly by those of the profession when taking key decisions”.
Further, the process for making major decisions did not follow the BSB’s own procedures and on several occasions the board was not provided with sufficient information by the executive to back up those decisions.
This was particularly the case with the Legal Choices decision, which was not a planned decision based on papers or a recommendation.
The LSB found no evidence that a comprehensive strategy to increase the BSB’s PLE work was presented to the board and only limited engagement with key PLE stakeholders.
It said: “Overall, the BSB does not appear to have considered the extent to which the decision to withdraw funding from Legal Choices, in absence of an appropriate alternative, could have a negative impact on the regulatory objectives.”
There was, more generally, “limited evidence that the BSB meaningfully engages with consumers or groups that represent their, or indeed broader public, interests”.
The LSB also found the governance architecture “fragmented and difficult to access, with some gaps and out-of-date components”.
The board of the BSB “did not take responsibility for the organisation’s performance within the statutory framework of regulatory objectives and performance obligations within which it operates”.
The BSB initially questioned the legitimacy of the review and failed to co-operate with the LSB until August 2020, but the LSB noted that the board has more recently accepted greater responsibility for compliance with the performance framework.
The review repeatedly highlighted concerns about the “disproportionate weight” the BSB placed on the impact of its work on the profession at the expense of the public.
“For example, the decision-making process followed by the BSB board in taking the decision to rescope the transparency standards appeared to be heavily influenced by the views of the profession but failed to take sufficient account of the views of key stakeholders, including solicitors, consumers and other intermediaries.”
The BSB substantially revised the standards to limit the mandatory transparency requirements to the more standardised services provided by public access barristers.
The review said: “When the BSB board made this decision, there was no evidence of discussion in the material we have seen of the significance or potential impact of the changes.”
The decision was taken in the absence of the chair, Baroness Blackstone, meaning the meeting was led the barrister vice-chair. This was “unfortunate” given that it was a “key consumer focused initiative”.
The influence of the profession on this decision was even recorded as a strategic and reputational risk, the LSB found, but little done to address it.
“The identification of the perception of regulatory capture as a risk provides some reassurance that the BSB is aware of the extent to which its decisions could be viewed to be more sympathetic to views from the profession.
“However, it compounds the findings on the lack of focus on consumer interests in taking decisions about Legal Choices and PLE.”
The review considered that the BSB’s five or six meetings a year for around two hours each time “provide less scope for meaningful debate that is likely to be necessary for some items, particularly on complex or controversial regulatory decisions”.
The BSB responded that it also conducted extraordinary board meetings – there were four during 2020 – but the LSB said it was “a matter of concern” that there was no clear public record of them.
Indeed, the BSB “did not initially volunteer to us that they had taken place”, the LSB noted.
The LSB said the BSB has accepted the findings in relation to the decisions reviewed and restated its commitment to the regulatory objectives.
“It also accepted that it must do more to convince the LSB and other stakeholders that its leadership and governance substantiate this commitment and conform to the well-led standard.”
The BSB board has issued an action plan to address its shortcomings.
LSB chair Dr Helen Phillips said: “I hope the leadership at the BSB, and at the other regulators, learn from this report. We expect to see the BSB make the changes needed quickly so the public and the profession can be confident the regulator is well-led, consumer-focused, and uses learning to improve performance.”
Chief executive Matthew Hill added: “We expect decisions made by all the regulators to be evidence-based, promote the regulatory objectives, and protect the public interest.
“For the key decisions we looked at in this review, we found the BSB was unable to show how it had achieved this and, as a consequence, it could not demonstrate that its decisions were in the public interest.
“Going forward the BSB has committed to putting the regulatory objectives at the heart of its decision making and to demonstrate how it is doing so. We will monitor its progress in delivering against its action plan and our performance framework.
“There are lessons here for all the legal services regulators.”