The Legal Services Board (LSB) will today formally recommend to the Lord Chancellor that will-writing – but not estate administration – should be regulated legal work.
The late u-turn on estate administration, which the LSB had initially intended to include, has already been . Instead it is to encourage self-regulation.
If the bid to make will-writing a reserved legal activity is successful – the Lord Chancellor has 90 days to make his decision – then the new regime should come into force in April 2015.
LSB chief executive Chris Kenny said in a briefing yesterday that he was “not going to take bets on that one way or the other” on whether the government will back the move.
The LSB said there is “comprehensive evidence” that the will-writing market is working contrary to the statutory objectives laid out in the Legal Services Act and “to the detriment of consumers and providers alike”.
It said making the work regulated would give consumers better protection – including access to the Legal Ombudsman – and increase competition by creating a level playing field between solicitors and new providers.
By contrast, the LSB concluded that the risks in estate administration did not justify the cost of regulation. The evidence “does not compellingly demonstrate systemic fraudulent or dishonest practices or other problems causing significant consumer detriment within the unregulated sector”. It argued that regulation would not be able to tackle what is essentially a criminal issue.
Further, the market share held by unregulated estate administration providers “appears to be small” – Mr Kenny said it was 4-5%, compared to 14-15% in will-writing – while the regulation of will-writing would help reduce this share even further.
Instead the LSB is recommending that major providers work together to produce voluntary schemes to promote standards and provide minimum protections for consumers, possibly supported by the Legal Ombudsman using its powers to create a voluntary jurisdiction for access to its service. The LSB will also facilitate work to improve the information available to consumers.
All regulators that want to regulate will-writers will have to apply to be designated by the LSB, and will have to show their proposed regime deals with the particular risks of the sector. Mr Kenny confirmed that the Solicitors Regulation Authority (SRA) will not be passported through this.
As well as the SRA, the Council for Licensed Conveyancers, ILEX Professional Standards and the Institute of Professional Willwriters are likely to seek designation, and there are several other bodies – such as the Institute of Chartered Accountants in England and Wales – that might as well.
LSB chairman David Edmonds said: “This is the first time we have made a recommendation to bring new legal activities within the regulatory scope of the Act. It is not a step we take lightly. The board believes new regulation is a proportionate response in the light of a compelling case underpinned by appropriate evidence.”