Hayhoe: Damning indictment
The “chaos” caused by the Mazur ruling demands “a courageous, full-scale review of the regulatory framework” in response, the chair of the Legal Services Consumer Panel has argued.
Calling the ruling “a damning indictment of regulatory failure”, Tom Hayhoe was critical of CILEX and the Solicitors Regulation Authority (SRA) but said it had also exposed shortcomings at the oversight regulator, the Legal Services Board (LSB).
In a blog on the panel’s website today, Mr Hayhoe said the regulators and representative bodies involved in and affected by the case “have sowed confusion, issued contradictory views, and arguably failed to protect consumers”.
As a result, practitioners were “left in professional jeopardy, and consumers were arguably exposed to risk. Mazur is a consequence of a regulatory framework that has lost its way”.
He described the contradictory and at times incorrect advice given by CILEX and CILEx Regulation as “a case study in regulatory incoherence”.
Mr Hayhoe went on: “Practitioners acted in good faith on advice from their own professional body, only to have the court in Mazur confirm they had been operating unlawfully. The professional and liability implications are profound.” He noted that CILEX was now seeking to appeal the judgment.
But the SRA could not escape “its share of blame”, he said, given that it had incorrectly advised the law firm involved that employees could lawfully conduct reserved activities.
Even if the error was restricted to this one case, “how has this not been picked up in its supervisory activities?” he asked.
Mr Hayhoe was concerned about the impact on consumers. If litigation was conducted unlawfully, professional indemnity insurers “may argue their cover does not apply”, while documents filed or actions taken by unauthorised staff could be challenged, “potentially undermining entire proceedings”.
But he then pointed the finger at the LSB – of which the panel is an independent arm.
“Where was the LSB while this regulatory chaos unfolded?” Mr Hayhoe demanded.
“The LSB has told us that it is carrying out a review, likely to be published early next year. Either it was unaware of a significant crack in the regulatory framework it oversees, or it was aware but couldn’t or didn’t want to act. Both scenarios are concerning.
“There is clearly a weakness in the fundamental job of ensuring consistent, lawful application of the rules.”
At the heart of Mazur was the “fragmented, incoherent framework that allows such contradictory positions to flourish”, Mr Hayhoe concluded.
“The integrity of the system now depends on more than compliance with the Mazur ruling. It demands a courageous, full-scale review of the regulatory framework so that it prioritises clarity over convenience, accountability over ambiguity, and above all, the protection of consumers and the public over the preservation of professional turf.
“Without it, the failures exposed by Mazur will not be an anomaly, but a pattern for the next regulatory crisis.”
Earlier this month, courts and legal services minister Sarah Sackman said that Mazur was further evidence of “a growing case for re-examining the legislative foundations of legal services regulation”.
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