Mayson: Brexit is not a good excuse to delay legal regulatory reform

Mayson: revise the scope of the reserved activities

The focus on Brexit should not hold back regulatory reform in the legal sector, leading market observer Professor Stephen Mayson has urged, countering calls by the Law Society for the government to put it aside to focus on leaving the EU.

Opening a Solicitors Regulation Authority event last week on ‘trust in the market’ and building confidence in regulation, Professor Mayson said: “For me, confidence is still not where it could be or should be.”

He explained: “The continuing legitimacy of regulation and regulators is to some significant degree founded on confidence.

“We should not allow the ‘excuse’ of Brexit to impede or delay the development of more effective legal services regulation.”

The Law Society has previously said Brexit meant this was not the time for reform.

Then chief executive Catherine Dixon told the justice select committee last June that the then government’s plans to give the Solicitors Regulation Authority (SRA) and other regulators full independence should be shelved because of the uncertainty caused by the referendum.

Earlier this year, president Robert Bourns, also giving evidence to the committee, said: “At the moment… it seems to me that the job of work in hand is getting through Brexit sensibly to the advantage of the economy.

“Frankly, with our colleagues in Europe looking on, this is not the time, in my view, to be engaging in further regulatory change.”

Professor Mayson highlighted five issues that needed to be addressed. “First, we should reflect: there has been profound change in legal services in recent years, with developments now proceeding at an exponential rate,” he said.

“These have affected organisational structure and staffing, funding and practice economics, and the sources and nature of competition; and these have in turn been influenced by the evolving role of in-house legal departments, and by technological innovation and increasing concerns about cybersecurity.

“Our regulatory framework reflects the world of 2007 – and, indeed – given that so much was passported into it – of decades and centuries before then. That world no longer exists.”

Second, Professor Mayson, “we should consider revising the regulatory objectives to put front and centre the public interest in the rule of law, in the administration of justice, and in the legitimate participation and protection of citizens within the justice system and legal services sector”.

Third was the need to revise the scope of the reserved activities to address the regulatory gap.

“A review of this gap would increase confidence that the right activities are being regulated for the right reasons, that low-risk activities are not being regulated for the wrong reasons, and that innovation and new entrants are not compromising consumer protection.”

The fourth issue was how best to secure the independence of legal services regulation from both government and representative bodies, “with the likely consequence that this could also affect regulation of professional titles and the role of current regulators in that”.

He explained: “The balance between appropriate regulatory intervention to secure public interest objectives and maintaining the ‘gold standard’ of an independent market brand is potentially at risk when the roles of government, regulators and professional bodies are tangled.”

The final point appeared to back the Solicitors Regulation Authority’s plans to slim down its Handbook: “We should allow the regulated community greater scope for behaving like the high-quality, ethical adults they claim to be, with regulatory attention focused on the fundamentals rather than the details, but then be tougher on those who transgress on those fundamentals.

“This should encourage greater confidence among practitioners that they are not being over-burdened and micro-managed; and it should give consumers and the public greater confidence that enforcement is properly targeted.”

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