LSB chair: regulators need to help push down cost of legal services

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10 September 2014

Pitt: split between reserved and unreserved activities indefensible

More needs to be done to reduce the cost of legal services to meet the needs of small businesses and people who are neither wealthy nor eligible for legal aid, the chairman of the Legal Services Board (LSB) has said in his first public speech.

Sir Michael Pitt also suggested that access to the Legal Ombudsman should be extended to the clients of unregulated legal services providers.

Speaking at a Westminster Legal Policy Forum event on the future of legal regulation, Sir Michael said many aspects of the English and Welsh legal system are world-class and need nothing more than encouragement and freedom to flourish. However, he said that while the Legal Services Act 2007 has delivered “considerable progress” – and not harmed the sector as some had predicted – it was “a job half done”.

“I find the legal sector to be highly confusing and illogical. The division between regulated and unregulated services is a product of history and it would be a well-informed purchaser of legal services who could describe the differences or their implications. In addition to this confusion, the structure of regulating bodies is surprisingly complex and expensive.

“Perhaps even more troubling are the numbers of people and small businesses who, despite knowing they need legal advice, decide not to make use of a lawyer.”

This needed to be a priority for regulators, Sir Michael said: “Above all, more needs to be done to tailor legal services and reduce their costs to meet the needs of small business and people who are neither wealthy nor eligible for legal aid.

“Historically that hasn’t been the agenda for legal regulators, who have focused far more on individual standards and the public interest. But the public interest is woefully ill-served if the market fails to serve such a large proportion of the population – and if regulation gets in the way of attempts to broaden access to justice.

“That’s why I want to simplify and to help to find more and better ways for people to solve their problems. That’s why I want change. We owe it to the people we serve to make this effort.”

Sir Michael said the time is now right to take a “long hard look” at legal services regulation so that when the attention of politicians return once more to the legal system, the sector will be prepared for what comes next.

All of the frontline regulators need to contribute to this, he emphasised. “We are tackling deregulation and making further improvements, but there is a marked reluctance for regulators to address jointly the more fundamental weaknesses in the legal system. Gridlock and fear of change are holding us back.

“The best ideas will come from the regulators, not government – and a simple defence of the status quo won’t do. We cannot move at the speed of the slowest.”

Weaknesses in the Act highlighted by Sir Michael included its length and complexity, and the indefensible and illogical split between reserved and unreserved activities. “Similarly it is impossible to defend the fact that customers who wish to complain may – or may not – have a right of redress depending on this split and who provides the service.

“There is a case for reviewing the jurisdiction of the Legal Ombudsman and breaking the link between regulation and redress.”

Sir Michael touched on the possibility of a single regulator for all legal services, as promoted by his predecessor, David Edmonds, but appeared to soften the LSB’s tone by saying it was “but one of many options we need to look at”.

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