The Legal Services Board (LSB) is to undertake a “first-principles analysis” of the list of reserved legal activities to consider “potential alternative configurations”.
The oversight regulator said it would also consider whether the current list was “sufficiently aligned to risk”.
Currently, reserved instrument activities (ie, conveyancing), probate, litigation, advocacy, notaries activities and the administration of oaths are the activities that only authorised lawyers can undertake.
A board meeting of the LSB earlier this month approved the research on them, which will help it decide whether there should be a “comprehensive review”, an idea it has been mulling for some time.
The LSB’s ‘mapping the unregulated sector’ research earlier this year estimated that it might account for up to 9% of the total market for individuals’ legal needs and up to 39% for small businesses. In some areas, such as will-writing, it was likely to be much higher.
The question of whether the list of reserved activities set out in the Legal Services Act 2007 should be changed is not new. In 2013, the then Lord Chancellor, Chris Grayling, rejected an LSB recommendation to make will-writing a reserved activity.
The board noted there was a “lack of evidence from our research that there is the scale of consumer detriment that would warrant immediate changes” to the list.
However, the Solicitors Regulation Authority has commissioned its own research on unregulated providers and the LSB was working on the next phase of its legal needs survey, which would “contribute to the evidence base”.
In a paper on mapping unregulated legal services that was before last week’s meeting of its full board, the LSB said its 10-year vision for the market, published in 2021 had identified “a challenge to close gaps in consumer protection to build stronger confidence in regulation”.
This involved considering a statutory review of reserved legal activities in 2021-24, to ensure regulation was targeted in areas where there was the greatest risk of harm to consumers.
But earlier this year, the LSB decided not to go ahead in the 2022/23 financial year, given the “significant” costs involved and instead carried out the mapping exercise.
The paper said: “It was not always possible to clearly identify actual impacts on consumers from the data, but the report identified the following causes for concern within the complaints data: upselling, mis-selling, consumer vulnerability, coercion, lack of pre-contractual information being provided and waived cancellation rights.”
The LSB said its analysis of the list of reserved legal services would take account of existing work on the subject, such as the independent review of legal services regulation by Professor Stephen Mayson for UCL.
Along with a single regulator for legal services, this recommended replacing the reserved legal activities and instead categorising all legal services according to risk and applying differing levels of protections as required.
The LSB said it would also take into account the Competition and Markets Authority’s 2020 review, which called for a review of the list suggested that certain activities could be removed from reservation or their scope redefined to better align with risk.