The Legal Services Board (LSB) is heading for another confrontation with the Law Society after proposing to take away its responsibility for appointing the chairman and board of the Solicitors Regulation Authority (SRA).
Alongside its decision yesterday to impose lay chairs on regulators, the LSB published a further consultation on the appointments process for regulatory boards, which it said was mainly in response to concerns raised by the SRA.
The SRA said that the root of the risk to independence lies not in the background of the chair but “in the process of the appointments to boards”.
The LSB’s internal governance rules require that appointments processes be “demonstrably free of undue influence from persons with representative functions”, but do not make it a requirement that regulatory boards be responsible for them – although they should have a very strong involvement.
The move seems mainly targeted at appointments to the SRA board, including the chair, the process for which has until now been run by the Law Society. The Bar Standards Board already controls its appointments process.
The SRA noted that there is no requirement that the select panel should have people with consumer or wider regulatory experience. “In principle the appointments panels could be dominated by people from the representative body or the regulated profession.”
The SRA continued by arguing that this gives rise to the risk that appointments may be made because of a candidate’s perceived willingness to advance the interests of the professional body and the profession.
The LSB said it saw “merit” in the SRA’s viewpoint. “This seems particularly salient given that several respondents to [the lay chairs] consultation highlighted a risk of lay persons being appointed that are in thrall to professional interests, albeit we view the risk as being lower than in the case of board members who are, or have been, members of the professions.”
The consultation said: “We envisage that the current position could be reversed so that the regulatory body will have responsibility for appointments and reappointments, but would be expected to strongly involve the parent [authorised regulators] at all stages, consulting it on the key aspects of the process.”
An SRA spokesman said: “We welcome the new consultation that shows the LSB has taken account of our board’s analysis. We will engage with the consultation and relevant parties to work through in more detail.”
However, Law Society chief executive Des Hudson argued that there was no evidence that a consultation on this issue was needed, saying “there’s no mischief that needs to be addressed”. If the LSB believed the Law Society had acted improperly in appointments in the past, it should say so, he added.
Dr Vanessa Davies, director of the Bar Standards Board, said: “Our initial view is that the LSB’s proposals would have limited impact on the BSB as we already control the appointment process and delegate the decision to an independent appointments panel – and have done so for some time.”