The Legal Services Board (LSB) is to examine whether ‘general legal advice’ given to consumers should be regulated, it announced today.
The current pattern of reserved and unreserved legal activities “is no longer fit for purpose”, the LSB has concluded, but it rejected the Solicitors Regulation Authority’s call for all solicitor-type services to be reserved as this was not a risk-based approach.
Publishing the outcome of its Enhancing consumer protection, reducing regulatory restrictions consultation, the LSB acknowledged the potential confusion caused by the patchwork of reserved activities at the moment and said the best approach would be to investigate whether there are common risks and features in the provision of general legal advice “that indicate that the regulatory objectives would be best served by reservation delivering a common minimum set of regulatory protections”.
The minimum level could start at consumers having proper access to redress at the first tier and to the Legal Ombudsman – whatever level it is set at, individual regulators would be able to propose that higher standards are required of their community in particular circumstances.
The focus will be on regulating the entity, rather than individuals, as “we have seen no evidence to suggest that consumers are able to make distinctions between the regulatory status of individuals within a business”.
Signalling the move also towards activity-based regulation, the LSB said that where it is appropriate to authorise individuals, “we anticipate that this would likely involve greater bespoke authorisation for the activity. Reservation should not result in restricting activities to individuals on the basis of their professional title alone”.
The LSB also said that it hopes to minimise the circumstances in which any new regulators are required.
The starting point for the definition of ‘general legal advice’ has been drawn from the Legal Services Act: “The provision of legal advice or assistance in connection with the application of the law or with any form of resolution of legal disputes”. However, the LSB will exclude litigation and advocacy, as they are already regulated, and advice given to most businesses, except possibly the self-employed or very small businesses.
The review will begin in the autumn, with a discussion paper published in the first quarter of 2013. “This is a major piece of work, the implications of which will stretch well into 2014-15.”
The LSB will not take forward the suggestion in the consultation that it might review the scope of protection within the conveyancing market. “Instead we will focus our work in this area on improving the working of existing regulations and the use of outcome-focused regulation by the existing approved regulators.”
The work follows on from the initial investigation into whether will-writing and estate administration should be regulated, the results of which were also .