Brimelow: Review will be complicated
Initial reactions to the government’s plan for a “comprehensive review” of legal services regulation have been mixed, with the Bar Council making clear its opposition to a single regulator.
The Legal Services Board (LSB), meanwhile, has pledged “more focused oversight” of the legal regulators.
Both the Ministry of Justice and the LSB were responding to the independent public bodies review of the LSB by Richard Lloyd, a former executive director of Which? and current chair of the Independent Parliamentary Standards Authority.
In his report, published in July [1], Mr Lloyd said the LSB has “lost its way” in recent years and a reset was needed while work began on a wider review of regulation.
Both yesterday accepted all the recommendations. As we reported [2], the MoJ has put on the onus on the LSB to make the short-term changes identified – including focusing more on regulatory oversight – while it conducts a “comprehensive review” of whether legal services regulation is fit for purpose.
However, the MoJ said it could not yet commit to Mr Lloyd’s timetable of having a new framework ready by 2029 with a view to implementation during the next Parliament.
Bar Council chair Kirsty Brimelow KC demanded that it be part of “any conversation from the outset, including on discussions about the scope of the review”.
Though she backed reining in the activities of the LSB – “We have been concerned for some time that the Legal Services Board has been going beyond its statutory remit, to the detriment of its core functions” – she made it clear that the Bar Council did not support radical reform like that proposed by Professor Stephen Mayson, which would see a single body regulate legal services based on the specific activity rather than professional title.
She said: “Currently there is a high level of public confidence in professional titles and in the reservation of certain high-risk and specialist activities, such as exercising a right of audience, which currently work well.
“In any future review, the expertise of existing specialist regulators, such as the Bar Standards Board, should be preserved rather than amalgamated and dispersed…
“We agree any review will be a complicated task and would be difficult to achieve by 2029 as recommended by the review.”
But Eileen Miller, the chair of CILEX, agreed with Mr Lloyd. “The current regulatory framework is no longer fit for purpose and reform is critical if we are to protect and meet the needs of consumers, with effective regulation that enables rather than hinders a thriving legal sector,” she said.
She added that the LSB was in “a unique position to bring together key players from across the legal sector to work collectively to improve legal services and drive clarity and consistency, while reducing duplication of effort”.
But she urged it to focus on issues that only the LSB could tackle.
Law Society president Brett Dixon agreed that the LSB “should focus on its core oversight role”. He went on: “Effective oversight helps protect consumers, maintain confidence in legal services and ensure frontline regulators are equipped to tackle emerging risks.”
But he did not commit on the comprehensive review, saying only that “the Law Society will work with the government to ensure the voice of the profession is heard”.
The LSB’s response to the Lloyd review [3] said it had already begun to “re-direct resources towards priorities informed by the recommendations”, stepping back from areas where the frontline regulators were better placed to lead or where government was better placed to act.
This explains the surprise decision [4] last month to ditch plans to increase pressure on regulators to improve diversity in the profession through a statutory statement of policy.
The LSB said yesterday that its policy work on professional ethics had ended and would now be taken forward and implemented by the frontline regulators.
It has also introduced a “more targeted, risk-based approach to oversight”. The plan explained: “Where we find shortcomings, we are setting out clear expectations for improvement, monitoring progress, and taking further action where appropriate.”
Oversight would be tailored, so that where regulators demonstrated that they were performing well and managing risks effectively, “we have begun to reduce routine reporting requirements”.
The LSB has established a dedicated regulatory oversight directorate and made senior appointments to deliver its plans – Shona Barton has left Ofcom, where she was head of strategy and operations in the online safety supervision team, to become director of regulatory oversight, with Sam Wood, currently head of enforcement at Ofgem, joining as head of performance & oversight, leading scrutiny of regulators’ performance against the LSB’s standards.
Also, Atika Thomson has left the Civil Aviation Authority to become the LSB’s head of policy development & delivery.
The plan hinted though that the LSB’s current budget of £5.8m might have to rise. “Delivering substantial change will require strategic investment in the people, skills and systems we need,” it said.
LSB chair Monisha Shah said: “The Legal Services Board is committed to effective regulation in the public interest. We will prioritise our work more sharply on stronger oversight to protect consumers. Our strategic objective will be to focus on areas of greatest harm to consumers and where regulation can make the most difference.
“To that end, we will use our convening abilities to foster a shared understanding of cross sector risks and challenges, using data and evidence to make the regulatory system more effective.
“The review recognises that success will depend on co-ordinated change at multiple levels. We intend to play our part in bringing about a system-wide transformation of legal service regulation.”