LSB tells regulators they need to promote tech and innovation

Kershaw: Regulation should not hold back innovation

Legal regulators should consider explaining to the public “the benefits of using technology and innovation to access legal services”, the Legal Services Board (LSB) has said.

It came in new statutory guidance issued yesterday that tells regulators they should be “proactively engaged in fostering a regulatory environment that encourages technological and innovative solutions to meeting consumer need”.

The LSB said it was referring to innovation in its widest sense: “It can include new ways of providing legal services and can encompass new ways of working, improving efficiency and productivity and new business models.

“Innovation goes beyond developing specific products and may not necessarily be consumer facing.

“For example, the support of innovation may also require that ongoing competence requirements encourage legal professionals to stay abreast of developments in technology and other innovations in the sector.”

The guidance follows a lengthy period of research and consultation. Last June, for example, the LSB published a major survey of legal services providers that outlined how the experience of the pandemic had given lawyers greater confidence in innovation and technology, leading to a “step change” in their use over the previous three years.

A year earlier, another study found that lawyers underestimated the public’s appetite for using technology in the delivery of legal services.

The guidance sets down three outcomes against which all the regulators will be judged as part of the LSB’s annual assessment of their performance:

  • Regulation enables the use of technology and innovation to support improved access to legal services and to address unmet need.
  • Regulation balances the benefits and risks, and the opportunities and costs, of technology and innovation in the interests of the public and consumers.
  • Regulation actively fosters a regulatory environment that is open to technology providers and innovators.

In delivering the first outcome, the LSB says regulators could consider – among other things – promoting the use of technological solutions to share information with consumers about price, quality and routes for redress, “and providing information to the public to explain the benefits of using technology and innovation to access legal services in order to build and enhance public trust”.

The second outcome might require regulators to consider “what steps may be necessary for legal service providers to take to ensure consumers are aware of how technology, such as artificial intelligence, has been deployed in the provision of a legal service”.

To achieve the third outcome, regulators should be committed to “fostering a regulatory environment that is open to innovators entering the market”.

This could be achieved through running pilots or using regulatory sandboxes to facilitate new products being trialled and reducing barriers to entry where appropriate.

LSB chair Alan Kershaw said: “Too many people fail to access the legal services they need, and there is a real opportunity to address this by fostering an environment that not only supports but actively encourages innovation in the market.

“Our guidance puts beyond doubt the LSB’s commitment to ensuring regulation does not hold back innovation whilst recognising that regulators must continue to be alert to the risks. From AI to videoconferencing, we want the sector to embrace technology and innovate to better connect people to legal services.”

He continued that the LSB now expected the regulators “to embrace our ambition and move with appropriate pace to understand the public’s needs and develop frameworks that balance the benefits and risks in the interest of people who need legal services”.

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