The “flaws and limitations” of the Legal Services Act are “all too apparent” and, as every year goes by, it is moving closer to “the regulatory equivalent of the knacker’s yard”, Professor Stephen Mayson has said.
The professor said the current framework of legal services regulation was “essentially founded on a Victorian guild and apprenticeship model”.
He said developments in technology, globalisation and increasing interest in multi-disciplinary provision had resulted in greater variety and complexity of delivery, including ownership structures and reward-sharing.
“This is not a world in which the Victorian guild, one-size-fits-all, model can operate, designed as it was for a market of homogeneity, simplicity and inertia for which rules-based regulation is suitable.”
He told the Westminster Legal Policy Forum in London last week: “The future envisaged by Sir David Clementi’s proposals has already arrived. In some aspects, we have gone further.
“I do not have confidence that the Legal Services Act 2007 will see us through to a sustainable future – one which properly enables providers of legal services to innovate and serve both the public and the consumer interest, and which properly and appropriately protects clients and consumers of all legal services.
“We will need a new regulatory settlement within the foreseeable future, and I cannot escape the conclusion that this would require primary legislation.”
Professor Mayson said that promoting and protecting the public interest should become the “predominant and overriding regulatory objective”, rather than having eight “sometimes contradictory and conflicting statutory objectives”.
He said the public interest duty should become “an additional professional standard applied to all regulated persons”, which could help tackle the “more egregious, aggressive, bullying, time-wasting and cost-insensitive behaviour” exhibited by some lawyers, who justify their actions as acting in the client’s best interests.
He said that if there was a move to “true activity-based regulation”, there should be no need for duplication or overlap in approved regulators for each activity. Admitting to being “ambivalent” about whether this would lead to a single regulator, he said that, with “the increasing heterogeneity and complexity of provision and providers”, specialised regulation and specialist regulators would “most likely” be needed.
“To a degree, we already have some of this specialisation in relation to advocacy, notarial activities, costs, immigration and claims management – though even here there are overlaps.
“Whether this line of thinking then leads us to a single General Legal Council with specialist sub-units within it, or to an Advocacy Standards Board, a Litigation Standards Board, and so on, with or without some over-arching coordination or accountability, would no doubt be the subject of heated debate.”
Professor Mayson argued that “clarity and coherence” were more important than simplification. He concluded that the “regulatory net” could be extended “in a way which would simplify and clarify our current arrangements, deliver coherence to the regulatory framework, and institute more effective regulation, ultimately for the benefit of all.”
This included extending the reach of regulation to all legal activities offered or carried out for reward. “This would not necessarily entail authorisation of all providers, whether individuals or entities. It seems to me that the Legal Ombudsman’s ability to offer a route to redress or compensation does not need to be limited to or constrained by any earlier process of authorisation or licensing.”